The Pearlstein Plan

THE PEARLSTEIN PLAN…. The Washington Post‘s Steven Pearlstein has written some pretty powerful columns on health care reform lately — some of which I enthusiastically endorse, some of which I found less persuasive — but today’s piece is, in effect, the Pearlstein Plan. As the Pulitzer Prize-winning columnist sees it, “there is a deal to be had here if only Democrats would be willing to take it.” The Pearlstein Plan has nine elements, including:

* Universal coverage. Finally, a requirement that every American purchase a minimum, a basic health insurance plan.

* Insurance exchanges. Each state or region will set up government-supervised insurance exchanges through which private insurers can offer policies to the uninsured, the self-employed and small businesses. Coverage standards will be set nationally, and participating companies must agree to take all customers, regardless of pre-existing conditions, at rates that vary only slightly by age.

* Options. Among the options would be lower-cost, high-deductible plans long pushed by Republicans. Another: nonprofit insurance “cooperatives” set up by participating hospitals and physicians groups offering an alternative to traditional fee-for-service medicine.

* Low-income subsidies. Households with incomes up to 300 percent of the poverty line would be able to buy the average-priced basic plan through the exchanges for no more than 15 percent of pre-tax income, with the balance paid for by the government.

* Employer mandate. All businesses would be required to pay for at least half of the cost of a basic insurance policy for all workers and their immediate family, or pay the government a progressive tax on payrolls over $250,000, exempting the smallest businesses. While distasteful to Republicans, the mandate would level the competitive playing field among firms that now offer health insurance and those that don’t, while generating revenue to pay for premium subsidies.

* Tax on extravagant health plans. A tax of 25 percent would be imposed on health plans with an actuarial value of $10,000 for individuals and $20,000 for families, indexed to inflation. While distasteful to unions, the measure is designed to raise revenue for subsidies, make patients more cost-conscious and help force down insurance premiums.

The Pearlstein Plan, which would scuttle the public option altogether, would also include some “malpractice reform,” cost-containment measures, and control on rationing.

Some of this approach seems fairly sound. Indeed, some of the Pearlstein Plan overlaps with what Democrats are already proposing.

I had one over-arching problem with the pitch. If there’s “a deal to be had here,” who is the deal with?

Pearlstein concedes the deal is not intended to win over Republican leaders on the Hill, because “they’re determined to derail any health reform plan.” That’s clearly true. But Pearlstein goes on to say that his proposal would eventually win over “a sizeable number of Republicans who will come to realize that it’s better for their careers to be on the right side of history than on the good side of the Republican leadership.”

Really? I’d like to believe this is true, but I don’t. Can anyone identify this “sizeable number of Republicans” who’ve expressed even the slightest hint of willingness to support reform? Remember, when the White House signaled a willingness to scrap the public option, not one GOP lawmaker — literally, not one — responded by saying, “Well, if Obama is willing to drop the public option, we’re ready to find some common ground.” On the contrary, Republicans shot down the trial balloon by insisting no concessions would be enough — the GOP will oppose reform no matter what.

Pearlstein added that his compromise approach is also “necessary to win broad support from an American public wary of federal deficits, anxious about losing the health care it already has and fearful of radical change.” Again, this sounds nice, but the Democratic plan already improves the deficit picture, let’s people keep what they have, and steers clear of radical change.

What’s more, even if Dems picked up on the Pearlstein Plan, the landscape wouldn’t change. The “American public” is responding to baseless, ridiculous, and insane ideas from the likes of Beck, Limbaugh, Palin, Armey, and LaRouche cultists. Would these right-wing lunatics suddenly become more responsible if the Pearlstein Plan were on the table? Of course not — reality has nothing to do with their attacks anyway.

Obama, Pelosi, and Reid could hold a press conference today, offering a reform package with no public option, no tax increases on the middle class, no “death panels” or “death books,” no funding for abortion, no coverage of undocumented immigrants, no rationing, and some “malpractice reform” thrown in, and Republicans would immediately respond with, “It’s not good enough.”

Why? Because they don’t support health care reform.