Health Reform Realities

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February 6, 2016 by islandersvoice1

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As Hillary and Bernie debate their differing approaches to improving our health care system, Islanders’ Voice will present a series of opinion pieces on the relative merits of each approach. First an op-ed by Nobel Prize winning economist Paul Krugman. Please weigh in with your comments. We also welcome submission of letters to the editor and other op-eds in support of or opposed to the position of either candidate.

Health Reform Realities

By Paul Krugman, New York Times, January 18, 2016

Health reform is the signature achievement of the Obama presidency. It was the biggest expansion of the social safety net since Medicare was established in the 1960s. It more or less achieves a goal — access to health insurance for all Americans — that progressives have been trying to reach for three generations. And it is already producing dramatic results, with the percentage of uninsured Americans falling to record lows.

Obamacare is, however, what engineers would call a kludge: a somewhat awkward, clumsy device with lots of moving parts. This makes it more expensive than it should be, and will probably always cause a significant number of people to fall through the cracks.

The question for progressives — a question that is now central to the Democratic primary — is whether these failings mean that they should re-litigate their own biggest political success in almost half a century, and try for something better.

My answer, as you might guess, is that they shouldn’t, that they should seek incremental change on health care (Bring back the public option!) and focus their main efforts on other issues — that is, that Bernie Sanders is wrong about this and Hillary Clinton is right. But the main point is that we should think clearly about why health reform looks the way it does.

If we could start from scratch, many, perhaps most, health economists would recommend single-payer, a Medicare-type program covering everyone. But single-payer wasn’t a politically feasible goal in America, for three big reasons that aren’t going away.

First, like it or not, incumbent players have a lot of power. Private insurers played a major part in killing health reform in the early 1990s, so this time around reformers went for a system that preserved their role and gave them plenty of new business.

Second, single-payer would require a lot of additional tax revenue — and we would be talking about taxes on the middle class, not just the wealthy. It’s true that higher taxes would be offset by a sharp reduction or even elimination of private insurance premiums, but it would be difficult to make that case to the broad public, especially given the chorus of misinformation you know would dominate the airwaves.

Finally, and I suspect most important, switching to single-payer would impose a lot of disruption on tens of millions of families who currently have good coverage through their employers. You might say that they would end up just as well off, and it might well be true for most people — although not those with especially good policies. But getting voters to believe that would be a very steep climb.

What this means, as the health policy expert Harold Pollack points out, is that a simple, straightforward single-payer system just isn’t going to happen. Even if you imagine a political earthquake that eliminated the power of the insurance industry and objections to higher taxes, you’d still have to protect the interests of workers with better-than-average coverage, so that in practice single-payer, American style, would be almost as kludgy as Obamacare.

Which brings me to the Affordable Care Act, which was designed to bypass these obstacles. It was careful to preserve and even enlarge the role of private insurers. Its measures to cover the uninsured rely on a combination of regulation and subsidies, rather than simply on an expansion of government programs, so that the on-budget cost is limited — and can, in fact, be covered without raising middle-class taxes. Perhaps most crucially, it leaves employer-based insurance intact, so that the great majority of Americans have experienced no disruption, in fact no change in their health-care experience.

Even so, achieving this reform was a close-run thing: Democrats barely got it through during the brief period when they controlled Congress. Is there any realistic prospect that a drastic overhaul could be enacted any time soon — say, in the next eight years? No.

You might say that it’s still worth trying. But politics, like life, involves trade-offs.

There are many items on the progressive agenda, ranging from an effective climate change policy, to making college affordable for all, to restoring some of the lost bargaining power of workers. Making progress on any of these items is going to be a hard slog, even if Democrats hold the White House and, less likely, retake the Senate. Indeed, room for maneuver will be limited even if a post-Trump Republican Party moves away from the scorched-earth opposition it offered President Obama.

So progressives must set some priorities. And it’s really hard to see, given this picture, why it makes any sense to spend political capital on a quixotic attempt at a do-over, not of a political failure, but of health reform — their biggest victory in many years.

One thought on “Health Reform Realities

  1. davidgeri says:

    This is a pretty lame argument, I would argue. Most every other advanced nation has single-payer healthcare. We had the chance to do it back in the 1960s when Canada did it, and at that time there were large Democratic majorities in Congress, so that was an opportunity squandered. If enough people are energized to vote for Bernie Sanders in this election, people who would not otherwise vote, we can take back the Congress and achieve what is good for everyone. And if a majority in both houses of Congress is not achieved right away, with Sanders in the White House using the bully pulpit more effectively than any previous president, I would argue, we will have a Democratic majority after the 2018 election. So I think single-payer is achievable, but only with Bernie Sanders pushing it as president.

    Obamacare still leaves 29 million people uninsured. Why? Because of ridiculous Republican governors who won’t compromise their “political ideals” to allow their poor to get coverage under Medicaid. This provision may have been necessary to get the program through Congress, but it is unconscionable to keep this provision in place. A single-payer plan would allow governors no option to mistreat their citizens. Go single-payer! Go Bernie!

    David Turnoy

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