Incentivizing the status quo

I think that Lamar Alexander revealed quite a bit when talking to the NY Times, both as to the broader Republican strategy and in regards to the incentives in favor of the status quo on an issue such as health care.

Mr. Alexander said Democrats would soon find themselves saddled with blame by Americans whenever they ran into a problem with an insurance company, even though Democrats have made a point of criticizing the insurance industry in the debate and asserting that without legislation the nation faced never-ending increases in premiums that would make health coverage less and less affordable.
“Insurance premiums are going to go up normally, and millions of Americans are going to experience higher premiums,” Mr. Alexander said. “All this is going to be coming, and the health care bill is going to get blamed for a lot of it.”

Alexander is almost certainly right in this. This was noted by Jonathan Bernstein as well: from now on, anything that happens in health care will be attributed to the Democrats and this bill. And given that a lot of the big-news items in health care are bad news (premium hikes especially), there will be ample fodder for Republican attacks.

This points to the broader incentives in favor of the status quo. The primary incentive for this bill, or more precisely, the incentive that was seen as being sell-able to the centrists Dems, independents, and maybe even some Republicans, was a potential future:* health care entitlements pushing out all other spending and leading to an unsustainable debt, premium hikes as costs increased well above inflation, leading healthy people to drop out of the system leading to more premium hikes, etc. That future remains, despite passage of this bill, plausible. It is less likely, and has gone from a near-certainty to one among many potential outcomes. But the judgements against this bill will likely be driven by a diachronic comparison between before the bill and after the bill, rather than between an actual trajectory and an avoided trajectory.

And given that in terms of cost control this bill is likely going to make things less worse less fast, rather than making things better in the short-term, this is not a particularly rosy comparison. It is the wrong comparison to make, but it is an intuitive one, and one that I expect we'll be seeing a lot of.

* It should also be noted that this is one of the problems with the strategy of selling this as an entitlement reform meant to lower costs, rather than an entitlement expansion meant to ensure universal coverage. Granted, there was almost no way universal coverage would have been able to get the centrist Dems on board, and so it was a necessary component of selling reform. But it sets up an implicit comparison between costs before and after the bill. For all the talk about bending the curve, I expect that we will be seeing quite a bit of reports in the next few years showing that premiums and costs have gone up since the bill was passed. That this was a secular trend which reform has likely slowed down will be buried in the coverage.