Known Unknowns and Unknown Knowns

Why let a great Don Rumsfeld quote go to waste, when you can use it as your Blog title?

I thought of the great quote from our former Secretary of Defense, while I was listening to Mitt Romney on television yesterday. For me, a great deal of domestic policy comes down to known unknowns. I have to trust the GAO and all kinds of other agencies and non-profits who score budgets and comment on tax policy, and they are very hard to sort out. But it's all part of being an informed voter. I understand the structure and function of government well enough, but my experience with Tax Law ended when I took Tax I in Law School, pass/fail. I passed, and promised my professor never to take another course in his section, in gratitude.

To me, tax is a known unknown. I understand it far better than I did in 1985, because it is real to me now, but I still get lost in projections and computations of corporate taxes, among other things. Insurance, however, is not a known unknown. It is a known known. I have worked in the field, on both sides, attacking coverage, underwriting, regulatory, and indemnity issues since I was first admitted to the New York and New Jersey Bars. The language of insurance is my language, and the problems and solutions manifest themselves on my desk every day.

So when Mitt Romney wheeled on his promise to repeal the Affordable Care Act on "Day One" of his Presidency, I had to wonder. It was unqualified: He was going to repeal the Act. That was his promise to the American people. I wondered what he would replace it with. I wondered how it could be unwound without disrupting the market, businesses which had planned for it, and how he could cover Americans it was designed to help. I'm still wondering.

The known known is this: The ACA was not a solution in search of a problem. The marketplace was not adjusting to an aging population. It was not adjusting to an environment where price-fixing was essentially legal, because of antitrust immunity for insurance companies. The proof was obvious: In a time of nearly zero inflation, coverages were narrowing while premiums were inflating by 15-25% a year. Businesses could not afford those increases, and individuals certainly could not afford non-group coverages. The poor job market created a pool of 89,000,000 Americans who did not have continuous coverage, and who would thus be exposed to exclusions or limitations on pre-existing conditions.

For a year or more, the GOP ran against the ACA, with absolutely no plan in hand to supplant it. "Obamacare" became a boogie-man, an object of fear. Most Americans, polled on the individual contents of the ACA, supported most, if not all, of its provisions. When handed the collective name of the policies they had just validated, they turned away from it, as if it was something profoundly "other" than the sum of its parts. The vitriol was amazing to me. I saw Tea Partiers holding signs that said, "Get your government hands off my Medicare," as if Medicare was not a government-run benefit plan. And cheerleaders on the far right kept up the din of disinformation, with cartoons about death panels that existed only in the most fevered imaginations.

Yesterday, the mask fell off. Mitt Romney admitted that there were parts of the ACA that he supported keeping, a significant change from "Repealed on Day One." I was always interested in how a President was going to unilaterally repeal an Act of Congress, in any event, but now I don't have to remain puzzled. On Day -133 before Inauguration, Mitt unilaterally repealed his own promise.

Of course, the repeal didn't last long before we again descended into unknown-unknowns. A candidate who insists that the only solution to our economic crisis is growth in the size of the pie, refuses to accept that the corollary solution to our insurance crisis is growth in the size of the pie. We live in a society where young people seldom get sick, and therefore their contribution in premiums during this period will finance the needs of the older and sicker members of our society. They are essentially not just paying it forward, they are assuring that when they get older, their own health problems will be paid for by those younger than them. They are planting an olive tree, to quote the Midrash, knowing that they will not likely get fruit for seven years. But Mitt Romney's spokesman does not favor planting that olive tree. Instead of expanding the risk pool with less risky people, Romney's spokesman declared that the twin solutions of reinsurance and risk adjustment will be applied to those with continuous coverage, to solve the problem of limitations on pre-existing conditions.

With that comment, the Romney campaign departed the realm of unknown-unknowns, the graveyard of tax policy, the limbo of spreadsheets I can't read. He's talking MY language now. The problem is: The language is gibberish. First of all, 89,000,000 Americans won't be in the group with "continuous coverage," because they have either lost their jobs, or had to change jobs, acquiring limited coverage for pre-existing conditions. That's a lot of Americans to exclude from a "solution." But on to the solution: Reinsurance? Wow. Talk about pulling a term-of-art out of the nether regions. Risk pools and Insurance companies already have the right to buy reinsurance, and have always had that right. The cost of reinsurance is part of our failing marketplace, and Romney offers nothing new as a solution. There's no "new kind" of reinsurance out there, and no proposal to make it more affordable or available. They just threw a word out there, hoping that for most of you in TV-land, it would be an unknown-unknown: Not only would you not know about it, but you wouldn't even know what you didn't know about it. And "risk adjustment?" That is a phrase with no meaning at all in the context of this discussion. He had might as well have said that we were going to solve the problem by adjusting the franistan with the perambulator. And so I propose that the great Donald Rumsfeld, the orator who proposed the concepts of the known-known, the known-unknown, and the unknown-unknown, have his awesome trifecta expanded, by one. A new expression must be created, to describe a comment which is just made up. We're going to call it a "unreal unknowns." It will describe a word or phrase, uttered by a politician or spokesperson, which is in the neighborhood of truth, but wouldn't be allowed by residents to stay there, because of its stench.

In a few days, the campaigns will go back to talking about trillions of dollars in debt, balance of trade issues, monetary policy, and sequestration. These are known-unknowns for me. I know about them, but I also know I don't know enough about them to know who is lying about them, without consulting someone else who might be wrong or also lying about them. Today, however, I got to deal with a known-known, a problem I understand, and a proposed solution I know enough to call BS on. It felt really good to know enough to call BS today. That is, until I realized for just how many people it remains an unknown-unknown. Those people are resting their hopes and dreams on risk adjustment and reinsurance, the handmaidens of continuous coverage. And a lot of those people will be among the 89,000,000 helped by the ACA, and to be left uncovered by its repeal.

I will sit here, in front of my TV, until November, waiting and hoping for another known-known. I'm more likely to be hit by a barrage of unreal-unknowns. G-d help us all.