Wednesday, January 20, 2010

It's Not Too Late for the GOP to Snatch Defeat From the Jaws of Victory

[Meant to post this two days ago but got sidetracked. It's actually posted on 1/22, not 1/20, since Blogger uses creation dates, not post dates.]

Much scrambling is occurring now that Brown has defeated Coakley for the MA Senate seat. Not too surprisingly, the amount of crowing coming from the Republicans is only slightly less noisy than the lamentation and back-biting from the Democrats. The emerging convention wisdom is that the health care bill in its current form is, if not dead, at least severely crippled.

But there is still an excellent chance for the GOP to screw the pooch.

As of today, the current average of health care favor/oppose polls is 41/51. There will be a temptation for the GOP to interpret this statistic as indication that Americans don't want health care reform. This is incorrect, of course. There are two things that Americans do want:
  • Practical health care reform, rather than the Frankenstein's Monster that emerged from Congress.

  • Free health care reform.
The first is completely reasonable. The second is impossible. So, as the Democratic leadership invites moderate Republicans into the discussion--for real, this time--Republican success will have to be measured in threading the needle between these contradictory goals.

The good news: there's probably no need to placate the lunatic fringe right. (NB: The lunatic fringe right comprises somewhere north of 66% of the GOP caucus.) But the remaining moderates need to be careful. If they slap a band-aid on the current bill without insisting on gutting the thousands of pages of incomprehensible regulations, they will lose an incredible opportunity to demonstrate that decent legislation can be crafted, as long as the party (still) in power doesn't treat the minority the same way that the GOP treated the Democrats when their roles were reversed. On the other hand, they can't dig in their heels so much that the whole thing collapses or, if it does, that three or four simple bills can't be had in the wake of the collapse.

This won't be easy. Everybody loves guaranteed issue, but passing that in isolation from some kind of mandate, and some kind of community rating, would be considerably worse than doing nothing. (Causing average health care policy costs to increase overnight by 20-25% probably isn't going to make the electorate very happy...) In the end, there are fewer things that can be removed from the bill than conservatives would like, if the bill is to enact any sort of reform at all. But here are some suggestions:
  • Change community rating so that the young are no longer subsidizing the old.

  • Remove about 95% of the endless new regulations.

  • Replace the exchanges with a interstate licensing. Note that this requires the Feds to get into the business of specifying minimum coverage criteria and jamming them down the throats of all of the state insurance commissions. However, this can be much less intrusive than the exchanges were going to be.

  • Make the taxation for this transparent. I'd be happy with a surcharge on Medicare payroll taxes, as long as the proceeds were being accounted for separate from Medicare. You could make this somewhat progressive by making the surcharge kick in only after the first $35,000 in income, but this really needs to be pretty flat, for the same reasons that social security taxes ostensibly are flat: they are earmarked for insurance purposes for all workers, rather than just being general fund taxation. (Yes, I am aware of the disconnect between theory and reality here, but what's good for the goose is good for the gander.)

  • Seems like the current discussion on guaranteed issue is revolving around the elimination of pre-existing conditions, rather than guaranteed issue. I can't tell if the news coverage is distinguishing between the two; if you deny some applicants issue for any reason, but then cover the pre-existing conditions of the ones to whom you issue policies, that's pretty weak beer, albeit inexpensive beer.

  • Seems like the mandate simply won't fly. The only way around this that I can see is to get very serious about HSAs, automatically attaching one to every household, whether they use it or not, and providing some incentive for contribution at the low end. Maybe the government matches the first $750 for people with incomes under 3x federal poverty. I won't pretend to have worked out the arithmetic on this, but genuine health care reform relies on all citizens paying for their own services. If you can't coerce a mandate, maybe you can incent one instead.

  • As always, if I Ran the Circus, I'd immediately force employers to dump what they spend on an employee's health insurance into their HSA, tax-free, then provide an opt-out group plan for them to spend the money on. This would be a wash, but it would then allow the employee the choice to opt out and choose some other plan on the open market. This has not a prayer of occurring, but it would be a genuine step forward in terms of cost control at a relatively low implementation cost.
The price of admission for any sort of GOP support is tort reform, which certainly won't hurt, and can probably be had in some watered-down form.

Ultimately, the best thing about Brown's election is that it halts the stampede towards getting any bill, even a crappy one. Since Obama will want to change the subject for a while to mitigate his 11/2010 congressional losses, maybe something genuinely decent can be crafted. But the GOP ignores the issue at their own peril.

No comments: