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Fashions and Fads in Health Care Legislation

Jan
2
2007

Will you can’t trust politicians, can you? I spent all last year explaining why the time wasn’t quite right for health care reform by 2008, than just because they eke out a small electoral win, the Democrats and every sensible Republican comes out with a health care reform plan.

The new Congress hasn’t even met and already Senator Ron Wyden (D-Wash.) has introduced a comprehensive plan to eliminate employer-based health insurance, and transform it to a highly regulated individual market. Not to be beaten to the punch, AHIP, the insurance industry lobbying group, has announced a universal insurance plan that doesn’t get us close to universal insurance, but miraculously involves lots of government subsidies for insurance companies. Even more bizarrely, Kaiser Permanente, which signed on to the AHIP plan despite the distaste with which they must view the other members of the AHIP board, introduced their own separate plan for California. Meanwhile Democratic Presidential hopeful John Edwards has kicked off his 2008 presidential campaign by announcing that he is now for universal health insurance too. And of course Massachusetts Governor and Republican presidential hopeful Mitt Romney will be running for his party’s nomination pushing his individual mandate as their version of universal health insurance and claiming he brought universal insurance to Massachusetts without a tax increase.

The action isn’t just at the national level, in fact it’s really all going off in the states. Basically everywhere you turn, politicians of every stripe in every state are talking about health care. Which brings us close to home in the biggest state: California. The saying: As goes California, so goes the nation may, once again, apply.

Here in the Golden State, California Senator Don Perata has announced a variant of pay or play insurance. The California legislature actually passed a single payer bill late last year. Gov. Arnold Schwarzenegger, in the middle of his re-election campaign, vetoed it of course, but then had a somewhat fake summit in which he declared that all options are on the table. All options with the exception of single-payer of course, because that would involve taxes. And every knows the Americans are unwilling to pay taxes, although they are apparently happy to pay a mandatory fee so long as it’s called a “premium”. Still Schwarzenegger cited fairly extensively a report from Democratic centrists which suggest that he realizes that uninsurance is a pretty big problem, and not just for the uninsured.

So, apparently, at least something is going to be done about the health care system here in California. But what? Three years ago in the dying embers of a Gray Davis term the legislature passed a moderately comprehensive pay or play bill looking something like what Perata has just introduced. However the next year, Schwarzenegger helped defeat that earlier motivated perhaps by the vast amount of money fast food interests and Wal-Mart – potential campaign contributors – spent against it. So there are now two problems. First somebody has got to take those big business interests and persuade them that for whatever reason this time health care legislation is different. Second somebody has to explain to the small business community that their failure to provide insurance to their workers is the reason for uninsurance. Of course, there are lots of good reasons why the small businesses are not providing insurance for most of them, like restaurants in San Francisco, money is too tight to afford it.

It may be the political Gordion Knot of our time. Although McDonald’s, Burger King and Wal-Mart could take a chunk out of their profits to provide better health benefits (and look more like Starbucks and Costco in the process), that’s not really an option for many small employers. So politically – with both sides of the equation not really interested in changing the system – it is hard to see what can actually be done. The basic problem is that 6 million Californians don’t get health insurance at work, and can’t afford to buy it on their own. And the individual insurance market is completely rigged against the people who need coverage – and there is no real incentive to those who don’t much need it to buy in. And yet the comprehensive redesign that give pretty much everyone coverage would almost have to include some type of compulsion to buy into the system and significant subsidies (i.e. new spending = new taxes on something). And Gov. Schwarzenegger has ruled out the most comprehensive and easiest solution before the whole manner comes up for debate anyway.

Which in turn takes me back to where I started last year. Victor Fuchs, the doyen of health economists, has often been quoted as saying that a national health insurance plan for the US will only arrive in a moment of national crisis. I personally think it will occur when a substantial majority of white male Republicans – the backbone of the party and its refuge for being able to block pretty much any proposal larger corporate campaign donors don’t like – realize that they’re the people being screwed by the current health care system. Then, and perhaps only then, will they vote for a Democrat who introduces a comprehensive universal plan, but promise to stick with him (or on the off chance her) and thing actually gets into Congress. And that might be the equivalent of a crisis.

But I look out in the streets of the Golden State and I see a bunch of pissed-off people upset at health care costs, and uncomfortable that there are so many uninsured, but I don’t see a real crisis that’s big enough to drive real change rather than irrelevant window-dressing. Not yet.

I hope I’m wrong.

Share  Posted by Matt Holt at 8:13 PM | Permalink

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