Ideological Jihad v. The Great Healthcare Compromise

Oblivious to reason or even practical political considerations, President Obama and the Democratic Leadership in Congress are on a jihad.  They are blowing up all of their own political capital in a narrow-minded, quixotic, and ultimately ideological drive for a single-payer healthcare system.  Since the goal itself is politically unpalatable to a majority of Americans, the Democratic leadership is further making themselves noxious to the voters by disguising their aims and using dishonest arguments along the way.  Now, on the verge of their final kamikaze-like assault through Congress, is as good a time as any to examine how we got here, what could have been, and what still might be.

That Barack Obama’s real goal has always been a single-payer healthcare system seems obvious when his history on the issue is tracked before and during his campaign for President.  Here is a video the Hillary Clinton campaign dug up during the election in which Obama clearly indicates he favors a single-payer system.  He also notes that it might be a long process, saying “we may not get there immediately”.    When confronted with the video during the campaign, Obama claimed that he favored a single-payer system if the United States were “starting from scratch,” but since the country already has an employer-based system, he actually favored building upon it.

However, at a  candidates’ forum Obama admitted that preservation of the employer-based system was only a transition to something else.

But I don’t think we’re going to be able to eliminate employer coverage immediately. There’s going to be potentially some transition process. I can envision a decade out or 15 years out or 20 years out where we’ve got a much more portable system. Employers still have the option of providing coverage, but many people may find that they get better coverage, or at least coverage that gives them more for health care dollars than they spend outside of their employer. And I think we’ve got to facilitate that and let individuals make that choice to transition out of employer coverage.

The transition would be to a “public option,” through which the United States would finally adopt a single-payer system.  Obama unconvincingly denied that the public option was a “Trojan horse” for a single-payer system. Even though the President vigorously campaigned behind the scenes for the public option, the US Senate was having no part of it and left the public option out of its final bill.

A few weeks ago, with the public option dead, President Obama finally came out with an outline for his own plan, as distinct from the House and Senate bills.  Interestingly, the one new dimension he added was a measure permitting the government to regulate insurance-premium prices.  Health insurance companies would become like utilities, quasi-public entities.  Or, with new and expensive mandates on one side and price controls on the other, private health insurance could be squeezed out of existence entirely.

Most troubling is President Obama’s less-than-candid approach throughout the debate. The Democratic leadership claims that their aim is to give consumers more choices, but really the goal appears to be only one government-controlled option.

During the campaign candidate Obama hammered Hillary Clinton for her insistence that there must be a universal mandate that everyone buy insurance who can afford it.  He made Hillary’s plan sound coercive.  But since becoming President, Obama has adopted Clinton’s position.  He knows now, as he must have known then, that everyone must be compelled to carry insurance in order to make it illegal for insurance companies to deny coverage for pre-existing conditions.  Otherwise, many people would simply wait until they got sick before buying insurance.

Today the President insists that his healthcare bill pays for itself, when clearly it does not.  It robs Medicare of $500 billion dollars and collects taxes and makes cuts for ten years while paying out for only six years in the new program. Controlling healthcare costs is what most voters mean when they say they want healthcare reform, but the Democrats are offering healthcare expansion without much if any cost control.

Ideologically pushing unpopular policies is politically foolish.  Pushing them in an obviously dishonest way heightens the political consequences even more. It did not have to be like this.  And we can insist that our government do better in the future.

Progressives have long held that every American should be guaranteed health insurance.  It is a noble and worthy goal.  Policies of insurance companies denying coverage or boosting premiums to unaffordable levels due to pre-existing conditions strike almost every American as inherently unfair. This practice must end.  The problem with the Democrats’ approach is not the ends, but the means.

From a policy point of view, they have shunned the market approaches to comprehensive healthcare in favor of their single-payer dream.  Only market-based reform realistically holds out the promise of maintaining the quality of American medicine while cutting costs.

From a political point of view, the Democratic Leadership has made no meaningful compromises at all.  The most important compromise is to abandon the state-centered approach to healthcare reform in exchange for demanding universal medical-insurance coverage.   Here is the grand bargain:  Republicans and moderate Democrats get market-based reforms while Progressives get universal coverage.

Progressives are pretending that such a bargain was not possible.  They are wrong.  Most of the Republican bills claim to aim at universal coverage.  They may not all realistically get there, but in conceding the goal, they signal a readiness to make a deal.  A number of Senate Republicans jumped on board the bipartisan Wyden-Bennett bill, which embodies many of the necessary compromises and reforms.  If progressives could accept market means to progressive ends, a large coalition could be assembled ranging from the left wing of the Democratic Party all the way over into the center of the Republican Party.

Here is a list of the sort of actions that might comprise a market-based approach to healthcare reform without sacrificing universality:

· Eliminate the tax-free status of the most expensive “Cadillac” employee healthcare plans. It’s regressive and drives up healthcare costs.

· Eliminate the tax-free status of all employee healthcare plans in order to pay for universal healthcare insurance and move away from the employer-based system.

· Require employers to offer their employees the cash equivalent of what the employers spend for them on healthcare so that the employees can purchase their own insurance in an open market.

· Make insurance companies subject to the anti-trust laws.

· Allow people to purchase insurance across state lines.

· Reform tort law by capping award damages for pain and suffering and creating specialized courts where expert judges rule on medical-malpractice cases.

·  Encourage the use of high-deductible plans with health-savings accounts so that healthcare consumers will have incentives to demand reasonable healthcare costs.

·  Provide tax credits to help the middle class pay for healthcare insurance.

·  Provide vouchers for healthcare insurance to the working poor.

The great healthcare bargain is out there waiting to be made if voters insist upon it:  universal coverage in exchange for the kind of market-based and legal reforms listed above.  It won’t happen in the near term.  President Obama and the Democratic Congressional Leadership have their jihad in full throttle.  Republicans smell blood in the water and are now in no mood to compromise.

Perhaps the greatest myth being peddled as truth is that it is now or never for healthcare reform.

If the Democratic state-centered healthcare bill somehow passes, the political system will be doomed to three more years of intense partisan warfare as Republicans campaign to repeal it. It won’t be pretty.  Republicans will be especially furious and unyielding if they get rolled in the “Reconciliation Process.” On the other hand, if the Democratic bill fails there may again be a chance for compromise and consensus on healthcare. Republicans will have more power in Congress.  President Obama will still be in the White House. The great bargain will still be possible. Citizens of goodwill should insist upon it.