Let’s start with Conor Friedersdorf’s post at Sully’s place:
As I ponder an Obama Administration health care reform bill, whatever that turns out to look like, I am struck by how different the debate is on the left, where Ezra Klein and other wonks are deep in the weeds on health care policy, and the right, where objections to a greater federal role are predicated largely on a general principled aversion to interference in markets and a rapidly expanding state. I’d like to pose a few questions meant to stoke conversation between these groups, and to highlight a couple of my own (possibly mistaken) ideas about health care in America. As I’ve yet to study this issue deeply, I am persuadable on most points, and I expect some who share my opinions are too.
[...] I am skeptical that I’ll be able to support the plan progressives intend to put forth. This is due to three concerns. a) Its cost. I’d bet a hefty sum that expanding coverage and the role the federal government plays in health care is going to significantly increase rather than decrease costs. Since we’re already paying for costly foreign wars, generations of accumulated debt, a massive bailout, and other entitlements with rapidly rising costs, it doesn’t seem like we’re in a fiscal position to pile on more government spending. b) Fear of excessive state power. It shouldn’t be too difficult to imagine another Dick Cheney or Richard Nixon in the White House. Are we really comfortable assuming that the state will never use its role in health care to pressure political opponents, or collect frightening kinds of data, or politicize medical decisions more than is now the case? Isn’t there any size and scope of government that progressives deem to be too big on prudential grounds? Why doesn’t this put us there? Isn’t it better for one among many health insurance companies to deny coverage, compared to one government run entity deeming something uncovered, as could happen if a public option drove some or most insurers out of the market? Health care is really important. Isn’t it unwise to concentrate too much power over it in any one place, the federal government included? c) Fear of lost innovation. I keep seeing the argument that America is the leading health care innovator, and that if our system looks more like what Europe has, there won’t be anyone left making strides in research and development. I haven’t seen a convincing rebuttal, though there may well be one. Links?
Kevin Drum responds:
But here’s the problem: the reason it’s hard to find a convincing rebuttal is because the argument itself is purely speculative in the first place. Sure, it’s possible that the only thing keeping medical innovation alive is the (approximately) one-fourth of global healthcare spending accounted for by the quasi-private portion of the American market. But that’s all it is: possible. There’s no real empirical argument at work here, and given the current state of the global healthcare market, there probably can’t be. That makes it pretty hard to construct an empirical rebuttal.
So I guess I’d reframe this. Instead of simply suggesting that innovation will die if America adopts national healthcare, how about breaking that down into three or four very specific arguments about what kind of innovations we’re talking about and why they’d be destroyed if the feds funded 80% of American healthcare instead of the current 45%? Let’s hear some details and some proposed mechanisms. Then maybe we can take a crack at having a discussion about it.
Conor asks for feedback here.
E.D. Kain at the League:
There is no good conservative argument for the current system, which is broken beyond repair. However, the progressive answer – a public option, alongside “keeping the insurance you have” is an expensive, doomed-to-fail proposition. The only way to really alleviate the drag created by employer-based insurance is to tax those benefits, deregulate insurance markets, and provide means-tested insurance vouchers for low-income Americans. Americans want safety nets, and it’s important to realize this, but it’s also important to realize that entitlements are extremely expensive, and adding state intervention into the economy on top of massive entitlements is even more expensive.
They’ll use it as a cudgel against single-payer, but never as an argument to increase domestic spending. But why not? If the benefits to innovation are really so grand, why shouldn’t we double our spending? Or increase it by 20 percent? It seems unlikely that fortune has delivered us to the optimal point on the curve. If the need to better fund global medical innovation were truly so persuasive, you’d imagine that it would cease being a convenient objection to universal health care and be built into an affirmative policy proposal in its own right.
The House bill came out on the 14th. The early thoughts:
You can download the full bill here. There are a whole lot of fact sheets and summary documents here, though I’m not finding them very helpful. I’d like to see if we could crowdsource this a bit: Dig through the legislation and tell me, either in comments or over e-mail, of anything particularly interesting that you’ll find. I’ll pull important nuggets and discoveries onto the front page.
The House of Representatives is now prepared to unveil their health reform legislation with markup taking place tomorrow and Thursday. It’s a good bill (more on that later) but it’s worth also giving a tip of the cap in the direction of the House process. The chairs and members of the three relevant committees did a great mitzvah by putting egos aside, forming a unified “tri-committee” bill writing process, largely shutting up about their internal negotiations, and getting down to the job of writing a bill that fits the parameters Americans voted for in November. I appreciate that the Senate has its own idiotic self-imposed supermajority requirement to deal with, but it would be nice to see the same discipline and seriousness of purpose from Senators at the committee stage.
Tevi Troy at The Corner:
The House Democrats have released their health-reform bill and, as expected, it is pretty far to the left. It raises taxes, imposes both individual and employer mandates, and creates a government-run health-care plan. This is not surprising, as the House Leadership’s strategy appears to be to pass a bill that is as far to the left as possible in order to have maximum leverage when negotiating with whatever compromise comes out of the Senate.
As expected, the House bill would mandate that individuals and families have or buy health insurance.
But what if they don’t buy it?
Then Section 401 kicks in. Any individual (or family) that does not have health insurance would have to pay a new tax, roughly equal to the smaller of 2.5% of your income or the cost of a health insurance plan.
[ Technical note: From the legislative language, it appears the tax = min( 2.5% * (modified AGI – personal exemption), average premium cost). In the examples below, for simplicity I assume modified AGI = AGI. ]
I assume the bill authors would respond, “But why wouldn’t you want insurance? After all, we’re subsidizing it for everyone up to 400% of the poverty line.”
That is true. But if you’re a single person with income of $44,000 or higher, then you’re above 400% of the poverty line. You would not be subsidized, but would face the punitive tax if you didn’t get health insurance. This bill leaves an important gap between the subsidies and the cost of health insurance. CBO says that for about eight million people, that gap is too big to close, and they would get stuck paying higher taxes and still without health insurance.
The CBO scoring also came out yesterday:
A Senate staffer passes along the CBO/Joint Committee on Taxation report scoring the House health care takeover.
Bottom line from the staffer:
$1.042 trillion over “ten years”, though the program really gets going in 2015 so its more like a 5 year score. Also, don’t forget most bills carve out unions so that they have a reprieve. Who needs card check [with] US government health insurance as a recruiting tool.
I’ve uploaded the full report: Read it here.
The Congressional Budget Office score? Their initial estimates have it covering 94 percent of people living here and 97 percent of legal immigrants, for net outlays of just over $1 trillion over ten years. That figure includes the offsetting effect of the employer mandate, which–at a healthy 8 percent of payroll for larger companies that don’t insure workers–would generate $30 billion a year by the end of the decade-long planning window. (Smaller businesses would be exempt.)
I’ve not yet seen assessments for the new revenue and offsetting savings; I believe everybody is still waiting on numbers from the Joint Committee on Taxation, which does official estimates for revenue. But my House sources say they expect that between savings and a new surtax on the wealthy, the bill pays for itself. In other words, it won’t inflate the deficit.*
A bill came out of the Senate committee today. More when I find it.
UPDATE: Mary Katherine Ham in TWS on the CBO scoring
UPDATE #2: Michelle Malkin on the Senate.
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July 16, 2009 at 8:55 pm
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