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Over The Rainbow: Reform And Reality



May 16th, 2008
by Rob Cunningham

If you’re just reading the headlines, jobs and the economy have displaced access to affordable health insurance as the electorate’s top domestic concern with six months to go until Election Day. But digging a little deeper into the results of a new poll from the Robert Wood Johnson Foundation, it appears that voters also believe that making coverage affordable and available would be the best way to relieve the economic pressure they are now feeling. Republican pollster Bill McInturff shared those findings at a May 14 Health Affairs briefing on its May/June issue, which is focused on reform. Worry about the economy and worry about health care costs aren’t two different issues, McInturff was saying. Anxiety is fungible.

Thus, it seems that John McCain may have stolen some of the fire that Democrats traditionally wield on health issues by making cost control his top priority, rather than universal coverage. McCain spokesman Doug Holtz-Eakin appeared to relish his role as a champion of fiscal discipline in a panel discussion with representatives of the Democratic candidates at the briefing. David Blumenthal and Jeanne Lambrew, speaking for the Obama and Clinton camps, respectively, argued reasonably that costs could be contained more effectively without the distortions created by ad hoc financing for forty-six million people without insurance. But that’s not a pitch that can be made easily in a thirty-second campaign spot, and voters tend to believe that covering the uninsured is going to cost them something eventually, no matter what the experts say.

But McCain is not exactly home free. Like George Bush and Sens. Ron Wyden (D-OR) and Bob Bennett (R-UT) [free-access article], McCain wants to replace the current, $200 billion a year federal tax subsidy for employment-based insurance with tax credits for individuals and families, to allow them to shop for their own coverage on the open market. One of the painful lessons of the reform defeat fifteen years ago [free-access article] was that many voters, who come disproportionately from the ranks of the insured, don’t want reform if it comes at the expense of benefits they currently enjoy. Democratic pollster Celinda Lake emphasized this preference in her presentation at the briefing and in an article in the journal [free-access abstract].

How will employers react if their contributions to their workers’ coverage are no longer tax-exempt? In his Health Affairs discussion of tax policy and health reform, the Brookings Institution’s Jason Furman reasons [free-access abstract] that the larger the changes that are made, the greater the uncertainty. That dynamic saddles the McCain proposal with a high risk of scaring off insured voters who don’t want to lose what they have and who aren’t sanguine about their prospects if their employer cuts them loose with a modest government voucher to shop for themselves and their families in the wild and wooly individual insurance market. The crowning irony in this scenario is the role reversal between the Democratic and Republican candidates, where a conservative represents radical change and the liberals stand for cautious adherence to the status quo.

It is perhaps belaboring the obvious to add one further observation about the odds that health reform will be a decisive issue in the general election or the top priority of the 111th Congress. Only Sen. Clinton has unequivocally committed herself to this goal, and she is at present running third. Sen. McCain would have a hard time selling a Bush-like, tax-based reform plan to a Democratic congress, even with help from the bipartisan cosponsors of the Wyden-Bennett proposal. Sen. Obama has set his sights on getting the U.S. out of Iraq. In a post-mortem on the lessons of the Health Security Act [free-access abstract], Christy Ferguson, Liz Fowler, and Len Nichols argue — as others have — that the next president would have to give health reform virtually exclusive, top-priority status to get the job done. It’s hard to imagine doing that and Iraq too, or doing health care without some of the money that’s currently going for war.

Yes, everyone wants to fix health care. But short of that, Medicare and the State Children’s Health Insurance Program (SCHIP) both need plenty of attention. The Congressional Budget Office and the Medicare Payment Advisory Commission have a bucketful of ideas about reducing spending and improving quality. Tax and budget options outlined in this month’s Health Affairs represent additional possibilities. There are alternatives to the big-bang approach that don’t have the defeatist taint that the term “incrementalism” has acquired. Call it the art of the possible.

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