Some in power are now may now be thinking of scaling back health care reform to a bill that "could attract bipartisan support." They must reconsider. A scaled-back health reform plan would be fatally flawed, both from a policy and political perspective.
On the policy, there’s no way to make a "scaled down" health reform bill work. Our health care system is a complicated and inter-connected network of pieces and policies. Changing one or just a few pieces of that system – as a scaled down health bill would seek to do – will cause immediate and severe problems in the rest of the system.
For example, you can’t just do "insurance market reforms" in a vacuum. You can’t outlaw discrimination based on pre-existing conditions, for example, without having everyone in the insurance system. Why? As soon as insurance companies can’t charge more because you’re sick, the sick in this country who have until now been denied care will flood into the system. This will raise prices for everyone, causing another problem. If prices go up, more people won’t be able to afford insurance.
So, now you have to solve the problem of people not being able to afford insurance. The solution? Give people subsidies so they can afford insurance. But that creates a new set of problems. How are you going to give out subsidies and make sure that taxpayer money gets to the right people? How are you going to ensure people buy insurance with that money, and that this insurance is good insurance, not junk insurance?
To solve those problems, you need an entity that will monitor the insurance market and deliver the subsidies in an effective way. That’s what the Exchange is. But just having an Exchange creates other problems. What’s to stop insurance companies from just raising their rates? How do you force them to play by the rules? That’s what the public health insurance option is designed to solve. If reform is enacted without it, it will be up to Exchange regulators to make sure we get a fair system. Given the history of insurance companies gaming regulation, there’s real reason for pessimism.
You can’t solve one problem in health care without creating another. You can’t just do insurance market reforms – if you want to stop insurance companies from denying care, the top goal of health reform according to officials in the administration and in Congress, then you have to do the whole package.
Ezra Klein made the right analogy this morning:
Let’s say you want to buy a house from me. And at the last minute, your portfolio take a big hit and you realize you have less money than you think. "Pare it back," you say. What do I do?
I can’t just rip out the foundation. Then there’s no house at all. The frame is important, too. So is the plumbing and the wiring. I can’t leave that stuff half-finished, or the place is unusable. I can downgrade the lighting fixtures, but they won’t save you much money.
Fundamentally, the things that make the house expensive all exist in concert with one another. The things that exist on their own — track lighting, say — no one really cares about. You can decide not to buy this house and instead buy a cheaper house. But you can’t just make this house cheaper and still expect it to function as shelter. So too with health-care reform.
That’s the policy. What about the politics?
The idea that we’ll have bipartisanship on health care going forward is ludicrous. The Republican party just won a massive upset by being the party of NO. They perceive this strategy as a winning strategy for them and their candidates. Unless we show them otherwise by passing legislation over their objections, they have no incentive to compromise. NO is working and winning them elections, why change?
Senators like Max Baucus spent months and months working for bipartisanship. That process resulted in the incorporation of some truly bad ideas into the Senate health care reform legislation – ideas like the elimination of the public option – and it resulted in no Republican votes for the final health care bill.
At this point, even if the entirety of the health care bill was the words "Health Care Bill of 2010," Republicans would still vote against it.
There will be no bipartisanship on health care, and chasing it will only cost more time and bring us more bad policies. Republicans are determined not to meet Democrats half way.
Democrats have only lost one seat in the Senate. They still have 59 seats. That’s a lot of seats. I’ll expand on the process by which health care can pass in a future post. For now, it’s absolutely possible to finish reform right and pass a good bill through both Houses of Congress. The only reason not to pass such a thing would be a lack of political will. That’s the challenge of leadership that’s now in front of President Obama, Speaker Pelosi, and Majority Leader Reid.
(also posted at the NOW! blog)
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14 Comments




how about say “insurance companies must be non-profits now”
throw in the guarantees to coverage (no pre-existing, etc)
how about medicare starting at age 52?
how about eliminating the antitrust exemption for health insurance companies?
how about some modest tort reform?
how about importing drugs from Canada?
how about getting rid of, or reducing, state barriers to out of state competition?
how about going after the fraud in medicare?
how about portability from job to job of your health care plan?
– Some of the above might be doable, separately. There should be republican support for at least some of the above, maybe for all of it.
Also, there are huge dangers in creating an entire system in your head – a 1000 page bill – and then imposing that hugely complex law on such a large part of the economy. This is a big big country. This isn’t Holland. Just the bureaucracy needed to “do it all at once” is frightening.
But medicare is already in place. Why not just expand it a little? It’s a start.
There are lots of options.
But, honestly, I don’t think the main issue now is health care. It’s jobs. (And it’s not punishing the banks either. It’s jobs.)
None of those things, besides starting Medicare earlier, would expand coverage. Most of them would do nothing or would hurt, and are very conservative ideas.
News item seemingly being missed.
For a different take on the same topic, please see my diary “Why Incrementalism might be the most Progressive thing of all“.
Hell, why don’t we just nationalize healthcare, we partially did it with banks last year, auto industry, etc. Why cannot people just understand that the government cannot be “everything for everybody”. There is no such thing as “too big to fail”. Someone had a reference in a post on here the other day about the Amish and healthcare — they don’t have insurance, don’t want government interference in their daily lives — and they do just fine — because they are some of the “hardest working people in this country”. Malcontents who want the government to take care of them “cradle to grave” need to get out into the real world of hard-working citizens who take life as it is — “no one owes us anything”, which includes healthcare.
“FREE MARKET, BABY!” I’ve heard neocons and goopers spout that phrase till I’m sick. We all know the free market is only for those with the most money and pull.
I say we take back our “free Market” and refuse to buy health insurance. Why can’t we bargain with the hospitals, doctors, and pharma ourselves? If you want our business, then prove it by deciding you want to offer care!
Seriously, the only thing that causes them to sit up and listen is money. If we stop sending all our hard earned money, and money we don’t really have to insurance and pharma they will suddenly have concerns for people.
Jason,
I don’t agree that you can’t implement incremental changes. You say
I thought the whole reasoning behind individual mandate was that insurance companies had to take everybody? So what is the difference? The current bill doesn’t control the amount they can charge? Are people flooding the market or leaving because it is too expenseive? That is a total right wing scare tactic. We can’t raise taxes because people will loose their jobs. That is so wrong! It will come out of the health insurance companies record profits instead.
It’s less about the mandate than about the subsidies. Implementing an individual mandate without making health care affordable doesn’t increase coverage, it just taxes people, so that wouldn’t hold down prices in the way I’m talking about. But if you make care so that everyone can afford it, then you can do the pre-existing condition thing.
But you can’t do the pre-existing condition thing without the subsidies.
Sure you can. incrementally you:
1. Repeal the antitrust exemption.
2. Then you implement pre-existing conditions laws.
3. Then you allow cross state purchasing
Insurance companies would be unable to raise prices they would have to take the hit in profits because they would be in competition with other insurance companies. Economics 101 says they would have keep prices low to compete. Subsidies don’t make insurance affordable they just drive up the price. Why would an insurance company lower its price if it was getting subsidies. Subsidies are going to be paid through taxes so there is no net gain there.
Plus your senate bill hamstrings the states attorney generals and would make it nearly impossible to enforce regulations against the insurance companies.
Repealing state lines prohibitions wouldn’t create competition for better care, it would create competition for worse care. Insurance companies would simply set up shop in the least regulated states. Almost overnight, that’s the only place you’d be able to buy insurance. It’s a race to the bottom.
Jason that is another Insurance industry talking point. Which is easily fixed by the state you live in. For me that’s Washington State and the state requires insurance companies to meet certain standards. If the Senate bill that you support passes it will take away the states power to regulate insurance that is provided to you in your state.
Where you buy insurance doesn’t limit the state regulations of your state. Like the credit card compnaies they setup shop in Deleware because of tax breaks and corporation laws. The only thing that limits my state from holding credit card companies accountable is that the Credit cards are regulated nationaly, just like your bill would proposse.
Jason nails it with regard to the folly of buying insurance across state lines. That is not insurance reform — it is dismantling those protections already in place is states such as Washington. Kinda like passing a federal law that no houses can have locks on their doors, and saying this will prevent you from being robbed.