Borrowing Into Health Care Minutiae

Jonathan Cohn, one of the more knowledgeable health care writers out there, has an interesting defense of the proposal to tax health care benefits as a means to overall reform. His argument appears to be that John McCain's conception of taxing health care benefits offered nothing in the exchange, while Obama at least offers... something.

To be clear, such a move would happen in the context of an entirely different health reform proposal than McCain was suggesting. McCain's plan would have undermined employer-sponsored insurance and forced large numbers of people to purchase insurance as individuals through an unregulated market, where it can be incredibly tough to buy decent coverage. Obama's reforms, if executed properly, would make good coverage available to everybody. And they'd still leave in place most employer-sponsored insurance. Changing the tax treatment of health benefits would simply provide a nice way of financing these reforms.

Employer-provided health insurance is a quirk of the 1940s, when it was seen as a way to increase job market stability. Unfortunately, as currently constructed this has transformed into a tax break for very wealthy employees and their coroprations, reinforcing inequality. I think taxing all health care benefits would be wrong, but capping the amount excluded for the benefit of funding a plan that offers affordable care to the broadest number of people makes a good deal of sense, particularly if the cap was phased in progressively, and ultimately I think that's where Obama's team will fall on this. The budget does not provide the funds needed to enact reform, so no sacred cow can really come off the table at this point.

Looking at another piece of health reform, the public option, the Chairman of the health insurance lobby, AHIP, has apparently endorsed the inclusion of a public plan with Medicare bargaining power that would lower prices for consumers by 20-30%. I say "apparently" because he appended the endorsement shortly afterward:

Updated: Halvorson's office e-mails with a correction. When Halvorson signed the document, he privately attached a "signing statement" expressing concerns about -- you guessed it -- the public plan. Sort of like an insurance policy in case anyone noticed. I have the letter for download here. The wording remains a bit vague, so I've asked for an interview with Halvorson in which he can clarify his stance.

Halvorson also runs Kaiser Permanente, which has always been a little more daring than his compatriots in the health insurance world. By and large insurers would rather not compete on price and quality and instead just have customers funneled to them. And of course they wield a certain amount of political power. But public option advocates have something going for them - the enormous popularity of public plans. Seeing the outrage over soldiers possibly having to use private insurance instead of the VA for treating combat injuries should be a warning to those who would kill a public plan. The principles are exactly the same.

Health services provided by the Veterans Health Administration (VHA) are truly socialized medicine, because the doctors and other health care providers who serve veterans work for the government and the government owns and runs the hospitals and other health care facilities where veterans get treatment. The VHA treats over 5 million veterans a year.

It may surprise you to know that in the U.S. members of Congress and Presidents have a long history of also enjoying the socialized medicine taxpayers provide for them. In fact, members of Congress have the choice many of them want to deny you. They can choose a private health insurance plan through the Federal Employees Health Benefits (FEHB) program or they can get top-notch medical care at government facilities, like the Bethesda Naval Medical Center in Maryland [...]

But the socialized medicine veterans, members of Congress and U.S. Presidents enjoy is not what Barack Obama is proposing when he includes a choice of public health insurance in his health reform plan. The public health insurance plan being discussed as part of national health reform would work more like Medicare, in which the government runs the insurance coverage, but the doctors, hospitals and other health care providers people go to are the same private, independent providers that currently care for them.

In fact, people with Medicare currently have the choice of public health insurance or private plans that contract with Medicare. About eighty percent of the 44.8 million older and disabled Americans who have Medicare coverage—about 35.4 million people—choose the government-run public plan over the private Medicare plans.

It is the choice 73 percent of voters want, including Democrats (77 percent), Independents (79 percent), and Republicans (63 percent).

Seems elementary to me. Harness the power of public opinion and even Congress will be forced to listen.