Health Care

The whole discussion of “death camps” and the like is totally unfounded and it is a symptom of the embarrassing degradation of our national discourse. (Stephen Pearlstein of the Washington Post put it well—this plan to have these town hall freak-outs could backfire, as its forcing people to have actual honest discussions about healthcare and understand the severity of the issue). Frankly, late-life counseling was originally a republican idea back in the early Clinton years—and it makes sense on both financial and moral grounds.

There have also been accusations about eliminating benefits for seniors, though I'm not sure where this information is coming from. The cost is born mostly by mandates on small businesses (de facto taxes) or penalties (taxes) plus increasing taxes on the top income brackets, not cuts to existing benefits.

Unfortunately, the opposition is so vitriolic you can’t really take it to heart. My actual concerns are such: the President is saying that the bill will reduce costs and expand coverage. That is simply contradictory, especially since there aren’t major changes being proposed in how healthcare services are paid for, obtained, or allocated. In truth, most of the “pro” discussion is well-wishing, assuming that things will get better just because the President said so. In truth, the main goal of this legislation is expanding coverage to the uninsured, which the non-partisan Congressional Budget Office noted will not reduce costs. Frankly, since most budgeting is done on 10 year horizons and the current legislation won’t come into effect for 3 years, the really scary feature is that the plan will increase the deficit by $60-80 billion per year in its 10th year—clearly showing that the costs will trend upwards, not come down.

I also don’t fall for the pseudo-economic talk about how a public option will affect private plans. Just because you use words like “competition” and “cost-curve” doesn’t mean you are following sound economic reasoning. A public plan would be able to undercut private plans due to its bargaining power and mandate to determine which services can be provided. If one was set-up, it clearly would put pressure on small businesses unable to pay for private plans, so they would rather assume the tax penalties for not providing healthcare (8% of payroll) versus their current healthcare costs (high teens into 20s of payroll). So the public option doesn’t directly force people to use it (which some opponents suggest) but it by no means is a straightforward, benign “other option” as its proponents suggest. Many people would like single payer healthcare, which is a perfectly legitimate view, but pretending that the “competition” model does not push our healthcare system in that direction is downright disingenuous.

Going back to well-wishing and the blind defense of the proposal, the President (and Administration) did well with their town meeting in NH. But the president has been deferring to Congress (as he did with the Stimulus and Cap and Trade) so his high-minded rhetoric should not be confused with the chaotic deal making that will actually construct whatever legislation is ultimately placed on his desk, which is why I remain to be skeptical.

It certainly is a morass and a lot of people are rightfully concerned. The final version will either be a testament to the President’s leadership and vision or an increasingly apparent demonstration of naïveté and lack of governing experience.