“If reform fails …”

This is not my topic, but I thought I’d throw the NYT editorial up in case people haven’t seen it. And if you have, maybe this would be a chance to reread it.

The House needs to pass the Senate bill, and pass the Senate bill now. Fixes may be possible, and fixes are certainly desirable, and there’s still a long way to go. For instance, if anyone’s interested in competing philosophies of regulation of health care to promote health and increase cost effectiveness, this article from the New York Review of Books discussing Cass Sunstein’s libertarian approach as an alternate to the “best practices” approach currently enshrined in the the Senate bill is thought-provoking. Despite the sincere insistence on the part of the congressional Democrats that the bill is not a “government takeover” of health care – and make no mistake, they are right in that  – there are some legitimate concerns about strong-arming medical decision-making in order to direct patients to effective treatment.

But the Senate bill is actually a very good bill, as the NYT editorial outlines. The key innovation here is the creation of an actual insurance market. We’ve not had a genuine market for health insurance, and the opportunity is quite intoxicating. Insurers would compete for those seeking small business and private individual coverage. Insurers would be required to offer coverage to anyone who wishes to purchase it, hence the individual mandate that all citizens either purchase coverage or opt out, thus ensuring that risk is distributed market-wide and not driving up coverage costs.

Surprisingly it’s the business mandate that’s the more controversial provision – the requirement that businesses (larger than the traditional small business cutoff of 50 employees, as I recall, in the Senate version) either purchase insurance  protection for their employees or pay a fee into a pool to support market administration. Is this an undue burden on businesses? No. The undue burden is out-of-control health plan costs which in the U.S. has become a huge economic drain on business activity and threaten to loom dangerously out of control unless immediate action is taken.

Some critics of the plan are saying that many employers will chose to pay the fine and just not offer benefits if they believe it will be more cost effective to ask employees to seek out healthcare on their own once it’s available. I say great. That’s in fact the beauty of the plan. The American peculiarity whereby workers are dependent upon their employers for health and related benefits is not only a bizarre way of doing things, it’s also increasingly a problem for the employee, given the seeming unstoppable trend toward less traditional employment, in the form of full-time, lifetime positions with benefits, in favor of fluid and shifting contractor, freelance, or multiple part-time arrangements that change frequently over time. The Senate bill offers us a possible mechanism whereby we can begin prying healthcare out of the human resources department and into the hands of the citizen, consumer, and patient.

Workers would now have the freedom to change jobs or careers without worrying how they’ll manage the COBRA payments or future medical needs. That’s the beauty of the whole thing: it will return power and freedom to the individual citizen. And I believe it’s quite possible that this will be the wedge that finally lets us lift benefit costs into the market economy, freeing up for businesses considerable capital for very much needed innovation and development. It’s by no means certain that this will be the road to sensible, market-based healthcare, but it is the best thing to get there we’ve seen by far.

Although many favor the public option, and are upset that the Senate bill has no provision for it, the insurance exchange without it should prove quite effective nonetheless. Many of the public option supporters, let’s be honest, want the public option as a first step toward a British NHS-style single provider plan. And I think most people familiar with healthcare issues would say that the NHS is much better than what we have currently in the U.S., though I find it doubtful that the public option would actually bring us there, or if at this point anything could. But the public option’s actual role in the current debate is not a stalking horse for socialism, but a mechanism to ensure market competition in the face of possible collusion or price-gouging on the part of insurers. We may still need it. But we won’t need it to develop conditions for the market and put it into play.

(And regarding public option as a market corrective? If anyone wants to bray about government inefficiency, remind them about the post office. Ask them to consider how much it costs to send something through the mail, and then how much FedEx or UPS will charge you for the same thing to be delivered in the same timeframe. Now think about how much package shipping might cost if the post office wasn’t there to offer a competitive disincentive to higher prices. Unfair competition? I thought not.)

Look, like I said, this isn’t my issue. I’m no expert – just someone who’s felt it necessary to stay informed. And if you feel you could be more informed, it’s not to late to start reading up.  This is no time to be complacent and disgruntled because the current bill doesn’t include everything people have been clamoring for on the issue. Get behind it and get excited about it, because there’s a very real possibility that without continued pressure on Congress to complete the deal, it’ll stumble and fail. And if reform fails now, it might not ever happen.

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