Paying For Health Care

The advocacy community has made a lot of headway on forcing a public option as the fulcrum point in the health care debate. They've used a variety of tactics and achieved much success. That's very positive. And it's worth noting that a public option, along with the short-term actions like health IT and comparative effectiveness research, as well as the savings of having everyone inside the system, will reduce the overall bottom line on health care, making reform in some respect pay for itself, over time. Peter Orzsag explains how this works:

...health care reform has two components: cost containment provisions and expanded coverage. In the near term, the impact of expanded coverage will temporarily dominate, and health care reform will therefore temporarily increase government spending. Over time, however, the impact of the cost containment provisions will accumulate, and the net impact will be a reduction – and perhaps a dramatic one – in government spending. Second, while we are waiting for the cost containment provisions to take hold, we are insisting that health care reform be deficit neutral. In other words, the Administration is committed to a health care reform that is at least deficit neutral over 10-years -- and deficit-reducing, potentially to quite a significant degree, over the longer term.

The first part is very valuable. Reducing spending over time and expanding access sounds like a win-win. But two things bother me. First, we HAVE to reduce spending pretty massively to avoid busting the budget entirely. And then there's the commitment to being deficit neutral in the near term. That means that some funding mechanism will have to be approved to pay for health care. You could say that this pays for itself, and the Iraq war and so many other initiatives of the recent past were unfunded, but the Administration committed to paying for it, and there wouldn't be 60 votes for an unfunded mandate besides. So, how do you accomplish this?

Cutting Medicare Advantage payments doesn't get you far enough. The Administration's proposal to cap charitable deductions was immediately rejected in Congress. The unions hate capping the employer deduction. And broader-based taxes, well, nobody's selling that to the public, and so the public demurs:

A new national poll indicates that most Americans are receptive to having more government influence over their health care in return for lower costs and more coverage.

Sixty-three percent of people questioned in a CNN/Opinion Research Corp. survey released Friday said they would favor an increase in the federal government's influence over their own health-care plans in an attempt to lower costs and provide coverage to more Americans; 36 percent were opposed.

The poll also suggests that slightly more than six out of 10 think the government should guarantee health care for all Americans, with 38 percent opposed.

That's pretty encouraging. If more than six out of 10 Americans want government to have more of a role in the health care system -- nice job, insurance companies -- the right will need to change its focus if it hopes to derail efforts to fix the system and expand access.

The poll seems to offer conservatives a hint in this regard. Respondents were asked, "Would you prefer a health care reform plan that raises taxes in order to provide health insurance to all Americans, or a plan that does not provide health insurance to all Americans but keeps taxes at current levels?" The result: 47% would accept the tax cut as a tradeoff, 47% would not.

With that in mind, expect to hear a lot of "reform = tax increases" in the very near future.

I've seen other polls showing that people will accept higher taxes in exchange for a better health care system. But I think the change reflects a shift from the general to the specific. It's one thing when you ask the question with GW Bush in charge, when it's completely hypothetical. It's another when health care's actually happening. We have 30 years of selfishness to break through. Another explanation for the poll slippage is that nobody consistently argues that health care for your family is worth everyone chipping in for.

I think a "health care reform will pay for itself" frame makes sense, alongside an "if we do nothing, everyone will spend more than you can imagine and destroy the budget" frame. But it's just not going to be possible to get 60 votes in the Senate without some funding mechanism, and it will be incredibly easy for enough stakeholders to say No to specific funding for none of them to get approved. And I worry that the above frames can be easily short-circuited by "your taxes will go up $X" (which the right will say no matter what, see their zombie lie on cap and trade costing $3,100 per family). At some point somebody needs to advocate for taxes as worth paying for to provide services for the greater society. The right has gotten away with promising expanded services and low taxes forever - the so-called "Two Santa Claus Theory". We can only sidestep that for so long. We cannot go after tax fairness sideways. Shrinking from the argument means that nobody will ever get a sense of the common good and the need to pay for a free society.

The other problem, of course, is that the cost controls in the current Obama plan are insufficient, and nobody seems to want to be bold enough to increase those controls. So we could end up with a reform that costs a lot up front and does NOT provide enough savings down the road, approximately the worst of all possible worlds.