Health-care debate: a chance to get past paralysis
It took decades to get a law enacted. But if we're going to rethink the federal role here, should we also stop having the feds favor companies with tax breaks?
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Instead, Obama relied on Democratic majorities in the House and Senate and fended off Republican efforts to include in the legislation such provisions as broad liability reform and authority for insurers to sell their health-insurance products across state lines. After a full-court press, in particular, on moderate Democratic House members, the legislation narrowly passed. At the time of its passage, surveys showed public opposition to be 60-65 percent.
Now, two years later, a public majority remains opposed and nearly two-thirds of citizens say they regard the legislation as "unconstitutional." Voters backlashed against moderate House Democrats who had voted for the legislation. Democrats lost 63 House seats in 2010 and their majority in that chamber. The House in 2011 convened highly polarized between conservative Republicans and liberal Democrats. The previous center was missing.
Obama's other chancy tactic in 2009 was to attempt the legislation at a time when the country simultaneously was undergoing financial and economic crises. (Roosevelt, after taking office in 1933, waited a full two years before pressing his Social Security legislation). White House staff reportedly argued against taking on the health-care issue until economic stability was restored. Obama, however (reportedly at the strong urging of his wife Michele) insisted that the effort go forward.
Let's set aside, though, the tactics and timing associated with the legislation. What about its content, now under court review?
My own view, from the beginning, was that the so-called "individual mandate," which is the centerpiece of the legislation, was a sine qua non for its viability if a general or catastrophic plan were not to be attempted. As many have pointed out, it originally was proposed by Republicans seeking a mixed public-private approach to health-care reform. It was employed in the Romneycare plan enacted in Massachusetts. The underlying concept was based on the auto-insurance model. That is, that everyone outside Medicare or Medicaid should be required by law to have health-care insurance. If they did not have it, they would be compelled to buy it from a public-established entity — that way, people could not irresponsibly leave others to pay for their care if and when they had an illness or accident. (There is a difference, of course, between the auto-insurance and health-insurance public-option models; not everyone owns or drives a car).
Opponents are now arguing that the Commerce Clause of the Constitution prohibits the federal government from compelling private citizens to buy a certain product. Court observers are now speculating that, since the entire legislation hinges so greatly on the individual mandate's inclusion, the justices may strike down the entire law in June when they reach a decision.
A betting person would wager that the court will knock down some or all of the legislation by a 5-4 vote. But maybe not.
If that does happen, we'll be back to "go" one more time in trying to design any new reform package. Any such effort would no doubt be set back for a time, as after the 1994 failure of the Clinton initiative. My own recommendation, in that case, would be to do a retry toward a national catastrophic plan. But that will be only one idea among many.
What other reconsiderations are in order?
Tax policy, of course, comes immediately to mind. Why should federal and state governments extend subsidies, deductions, and other breaks to certain economic activities but not to others?
Home ownership, for instance, was seen as a virtue and social stabilizer when home-mortgage payments were established as deductible under the Internal Revenue code. But there were unforeseen consequences to this provision: overallocations of capital to the housing sector; assumption of mortgages by people unable to finance them; the creation of such institutions as Fannie Mae and Freddie Mac to subsidize this part of the market; the invention of exotic derivatives which their Wall Street inventors themselves did not understand; a financial collapse partially caused by reckless trading in such derivatives, etc. Then there was the simple fact that many billions were lost to the Treasury annually because of the home-mortgage deduction. Other countries, including Canada, have no deduction and nonetheless have large home-owning populations.
A medical-expense deduction also costs the Treasury billions annually. Rational health-care reform might enable its removal.
Then there are many billions in "tax expenditures" extended to politically favored sectors and companies, ranging from oil and gas and alternative energy companies to defense contractors, auto companies, producers of certain agricultural commodities, and exporters of certain manufactured goods.
Any respectable economist will tell you that overall economic efficiency, growth, and job creation would be served by elimination of all of these tax expenditures. The tax code should not determine economic decision-making. Companies, sectors, and spheres of economic activity should not be chosen for success or failure by government decision. Small business, in particular, gets left out when tax goodies are passed out to the big players with the strongest political clout. Let free competition reign and prosperity ensue.
Both major political parties have pledged to address tax expenditures as they examine their options for long-term public debt reduction. But, thus far, few major leaders have been willing to single out specific candidates for elimination.
There is a natural reluctance to do so but we also should revisit the powers to be reserved, respectively, to the federal government and states in many spheres.
"States rights" were the rallying cry during the civil-rights era for civil-rights opponents who wanted to resist such measures as the Civil Rights and Voting Rights Acts on the basis that the states, and not the federal government, should have jurisdiction in such matters. Presidents, Congresses, and the courts reflexively came to regard states-rights-based arguments as by their nature reactionary and arguments for federal jurisdiction to be enlightened. But that was a half-century and more ago.
States and localities are complaining now that the federal government has overstepped in many policy areas (not having anything to do with minority rights) especially relating to economic issues. It's hard to be sympathetic to these assertions when they are based in state- and local-level desires to void federal environmental or public-lands safeguards. But, in an era of concentration and centralization, we should be willing to hear case-by-case arguments about top-down abuses by government distant from places where people live their daily lives. Political tides change. Laws and regulations adopted in a progressive era can be used for reactionary, coercive purposes in another era.
Both major political parties have, in fact, been running on intellectual empty for several decades. If you follow this year's presidential-campaign debate, for instance, you find it uncannily paralleling that which took place in the 1930s, with one side denouncing the greedy rich, Wall Street, oil companies, and their abuses and the other warning that government and its liberal allies are villains and a threat to freedom.
Maybe the silver lining in the current health-legislation confusion is an opportunity to rethink many of our approaches to governance and public policy.
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Comments:
Posted Fri, Mar 30, 9:59 a.m. Inappropriate
The Afforadable Care Act is complex. So correct me if I'm wrong, but my understanding is that a catastrophic plan will be available along with the four others (Bronze, Silver, Gold, and Platinum) for purchase in the state exchange. It will be available in the individual/family market to those up to age 30 and to those who are exempt from the mandate to purchase coverage of other plans because their income is low.
Posted Fri, Mar 30, 10:54 a.m. Inappropriate
As usual, where to even start with this TVD column in terms of inaccuracies and unfounded and misleading statements. Most opinion writers recognize that they can't be expert in all fields. A big part of TVD's problem is that he feels he can write about everything knowledgably and accurately. That's impossible.
1) There will be enough workers in the future to finance current Social Security benefits. But the cap on income subject to the payroll cap has fallen below historical levels in terms of taxing at least 90% of wage income. If that cap is raised, that solves most or all of the long-term shortfall.
2) There's no need to raise the SS eligibility age, which already is going up to 67. And it's terrible policy besides. TVD and others who propose this never explain how people are supposed to wait and work longer to support themselves when it's become difficult or impossible for people in their 50s and 60s to find decent jobs with benefits, given rampant age discrimination.
3) The "same fixes" wouldn't work for Medicare, whose problems are part and parcel of the larger, profit-motivated, insanely costly U.S. health care system. The Affordable Care Act already contains many cost-saving features for Medicare and the rest of the health care system. Here is a recent article I wrote on 10 measures that would save Medicare money and improve quality of care that would not simply shift costs to vulnerable seniors, which is what TVD and his cronies propose to do.
http://managedhealthcareexecutive.com/savemedicare
4) U.S. private insurers, like all payers in all advanced countries, refuse to cover medical services they consider "not medically necessary" or experimental, etc. The U.S. government single-payer insurer, Medicare, actually is more generous in covering many services than private insurers are. On top of that, polls in Canada, Germany, France, Australia, Britain, etc. etc. consistently show that citizens in those countries are more satisfied with their national health care system than Americans are. And Medicare beneficiaries are more satisfied with their health care than Americans under age 65 in private insurance are. So much for that shopworn shibboleth.
5) TVD clearly has no understanding of the Clinton health plan, which I covered extensively at the time. I don't recall any significant concerns raised about possible corruption in the regional purchasing alliances.
6) Dick Nelson is correct that starting in 2014 under the Affordable Care Act, individuals and small employers buying coverage through the state health insurance exchanges will be able to buy a basic bronze plan that's relatively comprehensive but will feature higher cost-sharing.
7) Notice the disconnect between TVD's critique of the Clintons supposedly failing to consult with Congress on their plan, and his critique of Obama for not developing his own plan and relying on congressional committees to do so. You can't have it both ways, TVD.
8) As I've pointed out several times, Karen Tumulty in Time reported authoritatively that in May 2009 President Obama met with GOP leaders and offered them restrictions on med mal suits in exchange for their support for a reform bill, and they walked away. Obama and Baucus would have made big concessions to the GOP for their support but the GOP was only interested in killing reform and making Obama a one-term president. BTW, the Obama administration did successfully reach out and get broad health care industry support for the reform bill. It would never have passed otherwise.
9) The ACA does allow insurers to sell policies across state lines, in a carefully regulated approach. The Republicans want essentially unregulated national sales, which most knowledgable insurance regulators and experts will tell you would be a consumer disaster.
10) President Clinton didn't make his push for health care reform until after tackling the budget and NAFTA in his first year. But the toxic political fallout from those two efforts made it impossible to move health care legislation. TVD ignores the fact that Obama moved major economic legislation in 2009 (the stimulus package, auto industry bailouts, etc.) before tackling health care. But a fair look at what's happening during his presidency shows that waiting longer on health care would not have helped because Republicans were determined to block him, a fact which TVD refuses to face.
Overall, Crosscut would be better served limiting opinion writers to fields in which they have genuine expertise.
Posted Fri, Mar 30, 11:42 a.m. Inappropriate
Harris, if your health care facts rival your social security facts then your beef with TVD is based on differing opinions, not differing facts.
Posted Fri, Mar 30, 12:01 p.m. Inappropriate
Not being an expert, I thought that the article introduced some interesting ideas; but then read "Let free competition reign and prosperity ensue". Assuming that opinion is indicative of the depth of reasoning in the article, I can't give the rest of the ideas any credence.
Posted Fri, Mar 30, 12:29 p.m. Inappropriate
Thanks for your comments. The Obama health-care plan, to my understanding, does make catastrophic coverage available to certain persons through a state exchange. The catastrophic coverage I am talking about, however, would be universal and provided to everyone, just as Medicare is provided to those over 65. This would make moot the issue of compelling anyone to buy a commercial product. With a reasonable deductible, the federal-budget costs of universal catastrophic coverage would be comparatively small. But it would fill a vital need for all citizens.
As to Meyer's usual broadsides, I can only offer facts as I know them
and my interpretations of those facts. I am of course not ignorant of the subjects of which I write. I am a student of New Deal history and was for many years a member of the executive committee of the Roosevelt Institute, which makes the Four Freedoms awards and is affiliated with the FDR Library at Hyde Park, NY. I was assistant to Vice President Humphrey during the introduction and passage of Medicare and Medicaid. I was principal author and/or represntative of the Presidential nominee in preparing several Democratic national platforms which included health-care planks. I was president of a Democratic policy institute which published
health-care monographs. I served for several years on the four-person board of a non-profit entity established by Sen. Ted Kennedy to develop health policy. While running a D.C. consulting firm, I dealt with
clients in the health sector and, additionally, wrote about health and other issues in a regular newsletter for institutional investors, in
a column in each issue of Financial World magazine, and in essays for
national newspapers. So I am not shooting from an uniformed hip when I discuss health-care issues. Those looking for me to pursue a straight partisan or ideological line on health or other issues will be disappointed, however.
Posted Fri, Mar 30, 2:35 p.m. Inappropriate
TVD, citing your bonafides from decades ago obviously does not make you an expert on the Clinton plan or the Affordable Care Act (given your many factual misstatements and oversights) or many other issues you pontificate about. And it doesn't even make you an expert on the history and politics of Medicare's creation, since you refuse to acknowledge the plain history that Medicare was a Democratic partisn achievement that conservatives bitterly opposed and not a single Republican co-sponsored. How about for once addressing facts and evidence that don't fit your arguments (facts as documented rather than "facts as you know them"), instead of dismissing criticism as partisan sniping? In fact, the Affordable Care Act would require that nearly everyone have at least basic coverage, both the individuals and small groups in the state insurance exchanges and other Americans who have coverage through their employers. Having the government provide basic coverage directly to everyone through a Medicare-type program would be fine by me, but try getting that through the Republicans in Congress. You're still not dealing with the reality of their total intransigence. You're also not realistically facing the substantial taxpayer-borne cost of such a program. While it might well be a good deal for Americans and the country, it would require a sizable increase in taxes to pay for it. And in case you haven't been paying attention, Republicans and conservative Democrats are saying NO NEW TAXES.
Posted Sun, Apr 1, 8:27 p.m. Inappropriate
I have to agree with psj. An interesting article but I also said WTF when I read, "Let free competition reign and prosperity ensue".
Such a broad Republican message point with no explanation. Plus it's just completely untrue. When the S&Ls; were set 'free', a few years later, we got the S&L; crisis. When the energy markets were set 'free', a few years later we got the Enron crisis. (which cost Seattle City Light $1.7 billion btw). When the mortgage markets were set 'free', a few years later, we got the meltdown of the entire world financial markets. When the nuclear industry was set 'free' in Japan, we got the Fukushima meltdowns, which will be a mess for at least 2 decades.
The most unforgivable part of this article is that TVD should know better. He has deep knowledge of policy matters as he so states. Yet it seems like the people who have worked in DC are the biggest suckers out there, swallowing this notion of 'free markets'.
There is no such thing as a free market. Without government regulation you have no market. Without regulation, would a bank even exist? The only reason the dollar has any value is because of the good faith and credit of the United States Government, NOT because of Goldman Sachs, Bank of America or any other financial corporation.
Would anyone be stupid enough to put money into 'Paul Ryan's Free Market Bank'? This bank would of course not be ensured by the FDIC. A bank without regulation is just legalized theft. Money goes in but it never comes out. It's just like Bernie Madoff. That's the free market. Anyone who thinks a 'free market' exists is either delusional or pumping the propaganda to get others to believe in free markets. They don't exist.
Posted Sun, Apr 1, 11:20 p.m. Inappropriate
Richard, TVD should know better? If he has "deep knowledge" of policy matters, how could he make such a deeply bogus statement? You're being way too generous here. Let's honestly call out b.s. without being so Northwest Nice.
Posted Tue, Apr 3, 5:12 a.m. Inappropriate
Harris. I agree. I am simply stunned when people use such phrases as the 'free market'. It instantly shreds one's credibility to use such republican party one-liners.
Take for instance the practice of insurance companies to drop people who have paid insurance premiums for years after they require major medical care. That's the 'free market' and polling shows the public is happy to have that regulated and eliminated, while the 'free market' advocates want to preserve that practice.
Another application of this practice would be for people to quit paying their mortgage and keep living in their homes. After all, why should banks expect money from homeowners? This isn't much different from insurers dropping people after paying decades of insurance payments and providing nothing. So why should banks expect payments for decades just for providing housing?
So "Let free competition reign and prosperity ensue" is indeed an absurd phrase. But it seems like people who do time in DC are prone to accept the absurd and even advocate for it.
Posted Wed, Apr 11, 10:52 a.m. Inappropriate
As Dick Nelson and I pointed out, contrary to what TVD claimed, the Affordable Care Act allows people to satisfy the individual mandate by obtaining what is essentially catastrophic coverage. See this AP article today.
http://seattletimes.nwsource.com/html/nationworld/2017948426_apussupremecourthealthcaremisunderstanding.html?prmid=4748
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