Health Care: What now?

Soon Republicans will control 41 seats in the Senate and everyone is wondering whether this development will scuttle 8 months of legislative buildup for a health care overhaul. Indeed, it was with this in mind that I voted for Martha Coakley -- a candidate who I didn't much care for. Scott Brown promised to vote against health care and said that we need to start over. Forgive me if I roll my eyes. Is there no other pressing business in the Senate?

In a recent column David Brooks runs through the various options left open to the Democrats. They can try to push the Senate version through the House, whittle the package down to just the popular stuff, or abandon the effort altogether. Not surprisingly he endorses the last option -- the one which incidentally does the most damage to the party.

More importantly, abandoning health care reform would be recklessly irresponsible as the opportunity might be lost for another generation. He warns that if Democrats try to push forward, "trust in government will be irrevocably broken" resulting in a "fully justified popular rebellion." What a strange and policy-free formulation. Instead of trying to reform a system which eats up 17% of our GDP even while failing to cover 17% of Americans, the government should seek to rebuild trust with the people. Yes, I'm sure that approach would gain popular support and trust (wink wink). I would love to see a campaign pronounce: "We will work hard to rebuild trust with the American people and until that is accomplished, forgo dealing with the nations most pressing issues."

But seriously, why do Americans oppose the current proposals? About 40% support them while 50% oppose. That's nearly a majority against. Indeed, some 55% in the wake of the second Boston Tea Party favor suspending the effort.

My guess is that Americans, subject to political spin and busy looking for jobs, misunderstand the health care legislation. It is not like we are opposed to health care reform or content with the current system. After all, Barack Obama made health care reform his biggest issue and he won convincingly. This is supported by a Gallup poll conducted last July in which 71% of Americans wanted health care reform.

Okay, so most Americans want reform, but maybe they just don't want this reform. One of the biggest complaints is that our spending is getting out of control, and most of the money is going to people who don't need it -- the bankers who drove us into this miserable recession. The problem with this line of thinking is that it turns reality on its head. The health care bills have been analyzed by economists in the non-partisan Congressional Budget Office and both bills actually reduce the deficit. Moreover, they do this at the expense of wealthier Americans and "fat cats" in order to expand the safety net to millions of struggling Americans.

Why not then push forward with the Senate version of the bill while the goal line is in sight? The bill has already gotten its coveted 60-vote approval in the Senate, and so it needs only pass unmodified in the House. This won't be easy, but Paul Krugman explains why he thinks it is better than trying to do things piecemeal:

Think of health care reform as being like a three-legged stool. You would, rightly, ridicule anyone who proposed saving money by leaving off one or two of the legs. Well, those who propose doing only the popular pieces of health care reform deserve the same kind of ridicule. Reform won’t work unless all the essential pieces are in place.

Suppose, for example, that Congress took the advice of those who want to ban insurance discrimination on the basis of medical history, and stopped there. What would happen next? The answer, as any health care economist will tell you, is that if Congress didn’t simultaneously require that healthy people buy insurance, there would be a “death spiral”: healthier Americans would choose not to buy insurance, leading to high premiums for those who remain, driving out more people, and so on.

And if Congress tried to avoid the death spiral by requiring that healthy Americans buy insurance, it would have to offer financial aid to lower-income families to make that insurance affordable — aid at least as generous as that in the Senate bill. There just isn’t any way to do reform on a smaller scale.

Or compare it to the design of an automobile. We know that we want to have the car but there are 100 opinions on how the ignition should look and how the pistons should be arranged and how the steering should work. But at the end of the day, you cannot resolve the debate by leaving the ignition or the pistons or the steering assembly out. And after 8 months (Congress began committee deliberations on health care reform last April), the end of the day is here -- we need the car to drive in spite of its imperfections.

Some supporters of reform engage in wishful thinking, saying that the House version is preferable. But that is a political luxury we cannot afford and the similarities of the two bills are greater than the differences. The Washington Post compared the major elements of the Senate and House versions. Over 10 years both bills:

• Reduce the deficit by over 100 billion;
• Extend coverage to more than half of the uninsured (from 54 million down to 23 with the Senate verion or 17 with the House version);
• Spend about a trillion dollars (S $870b, H $1050b) over 10 years, which is 0.5% of the 10-year projected GDP;
• Raise money with new taxes on wealthy Americans and in the Senate on expensive insurance plans;
• Expand Medicaid coverage and other low income subsidies;
• Require that individuals purchase insurance;
• Penalize employers that do not provide insurance benefits, except small businesses;
• Do not subsidize abortion coverage; and
  
• Establish exchanges for people who don't have employer-based plans to purchase insurance.
  

On the other hand the differences are less substantial. The main one is that the Senate bill has no public option. There are also differences in the way that some of the above items are implemented.

If a majority in the House can be corralled, voters may eventually thank them when they realize that, in spite of the ugly sausage-making reality of how legislation is made, these bills do more good than harm; they extend insurance to millions of struggling Americans, modestly reduce the deficit, rein insurance company abuses in and modestly bend the mighty cost curve. As one blog headline puts it: Enough hand wringing; get the job done!