e dont have a health care crisis in this country,” Senator Daniel Patrick Moynihan stated publicly in September 1993, three days before President Bill Clinton was to unveil his health care reform bill. Moynihans remark, coming from a member of the presidents own party, did a lot more than Harry and Louise to kill off Hillarycare. (It didnt help that Moynihan, who was chairman of the Senate Finance Committee, wouldnt hold hearings on the bill.) The good news in 2008 is that no prominent elected official, Democrat or Republican, would dare deny any longer that we have a health care crisis. The bad news is that over the past fifteen years the crisis has gotten much worse.
Since 1993, the number of uninsured Americans has risen from 38 million to 47 million. Per capita health care spending has more than doubled, rising from 12 percent of gross domestic product to 16 percent. Health insurance premiums have increased at an annual rate typically double or triple the rate of salary increases, yet have bought workers steadily less coverage as managed care plans have replaced virtually all traditional health insurance policies. Remember, back in 1993, when you worried that the government would choose your doctor? Today, your insurance company chooses your doctor.
What has this industry-led managed care revolution produced? Well, according to a World Health Organization survey made famous by Michael Moores film Sicko, the United Stateswith a GDP three times bigger than anyone elsesnow places thirty-seventh out of 191 countries in the overall quality of its health care system. Thats just a whisker ahead of Slovenia.
The danger, then, isnt that the next president will fail to pass a health care reform bill. Its that whatever bill he passes will fail to address the current crisis in any meaningful way. That outcome is much likelier if John McCain wins the election.
In discussing their respective health care proposals, both candidates tend to focus on the need to increase regulation of the private health insurance market. I think its too late for that; the insurers have by now developed many, many more varieties of chicanery to deny claims than any government regulator could hope to keep track of, much less prohibit. The question therefore becomes: Which candidate proposes expanding the governments role in providing health insurance? Only Obama, who would create a new public health insurance program limited to the self-employed, employees of small businesses, and people whose employers wont give them health insurance. This could evolveshhhh!into a full-fledged government health insurance program for all, especially if employers responded logically to its existence by accelerating their reduction and/or elimination of health insurance benefits.
The McCain campaign would have you think that relieving business of its role as purchaser of health insurance would be a disaster. McCain health policy expert Jay Khosla recently complained to the Wall Street Journal, “To maintain their competitive edge, employers will follow each other down this slippery slope, essentially spelling the demise of the employer-sponsored system.” Thats a very peculiar complaint coming from a pro-business Republican. American employers perceived societal responsibility to deliver health insurance is a burden that weakens their competitiveness abroad. Businesses in other nations dont bear that burden; why should they here? The McCain campaign further complains that Obama would pay for his new public program by taxing employers who provide little or no health insurance coverage to their employees. I agree this would be unwise, not because I recoil from imposing new taxes on business, but because it would be politically shortsighted. The only way to achieve health care reform, it seems to me, is to get the business lobby on boardor, rather, to peel the broad business lobby away from that portion representing the health insurance industry, which will almost certainly oppose real reform. The expansion of public health insurance should therefore be paid for by raising the top income tax bracketabove the Clinton-era 39.6 percent, if necessary.
One legitimate complaint the McCain campaign makes about Obamas plan is that it does little to address the problem of medical inflation. Thats true. McCain has said that we need to change the way health care providers are paid, and while he hasnt done much to spell out what that means, his campaign staff confirms that he would like to shift doctors away from the traditional fee-for-service model, which gives them an incentive to maximize medical procedures and tests. Thats a laudable goal, but one that isnt likely to be realized until the government expands substantially its share of the health insurance market. Otherwise, McCains health plan is a mishmash of tax subsidies for health savings accounts (which favor the young, single, and healthy over families, the infirm, and the elderly) and a vague pledge to work with governors to help people who cant get health insurance because of preexisting medical conditions. The latter would be achieved at the state level through the establishment of federally subsidized nonprofits that sound to me like a tripartite recipe for public spending without accountability.
In stating that Obamas health care plan would speed the evolution of a government-run universal health care system, Im following the McCain campaigns spin much more closely than the Obama campaigns (with the significant difference that, unlike McCain, Id be pleased with the result). Obama may even have talked himself into believing that government would, and should, maintain a severely circumscribed role. It scarcely matters. The public isnt ready to favor a nonmarket solution to the health care crisis, so achieving one is best done quietly, in stages, with the subtlety that Franklin Delano Roosevelt displayed in easing our isolationist nation into fighting the Axis powers.
Dont let this get around. In fact, when youre done reading, please ball this up and swallow. In this tense political year, you cant be too careful.
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