Yes, the health care bill should pass.

[liberalpragmatist]

There's a lot of anger over the public option and the health care bill right now. Let me just make a few points that I think are relevant:

I. The Public Option: Regarding the fact that premiums for the public option may be somewhat higher than private insurance, there are a few issues that are relevant. For one thing, the CBO did not state definitively that premiums will be higher - it said they might be, but that overall they would be comparable. The reason premiums may go higher is because the public option may attract people who are sicker and cannot get cheaper coverage from the private plans. In the absence of a public option, many of these individuals would have to pay even higher premiums under private insurance. So the public option is still a good option for them.

Medicare+5 rates would have helped the public option dramatically. But there simply aren't the votes in the House. Over time, the key to making the public option competitive will be to open the exchanges - and by extension, the public option - to everybody. Ron Wyden has pushed for a "free choice" proposal which would allow anyone to buy into the exchange even if they are offered coverage by their employers. However, both big business and the unions oppose that measure - big business because it'll weaken their control over employee benefits, and unions because they fear that allowing people to opt out of employer-based plans will weaken their bargaining power. That proposal is unfortunately not going to pass for now.

However, that kind of proposal is the sort of thing that could very easily be enlarged down the road, similar to how Medicaid has been steadily increased. In the meantime, we should push for allowing all employers to eventually buy into the exchange, which the House bill does allow, and also pass Wyden's modified free choice proposal which allows some people to opt out of their employer-based coverage if they can get a cheaper option on the exchange. Both would allow more people to buy into the exchange and the public option and could gradually increase its membership and thereby increase its leverage.

II. Should this bill pass? Yes, as Krugman argues.

This bill will expand coverage to over 30 million. It will, crucially, dramatically expand Medicaid, expanding it to 150% of poverty, increasing its reimbursement rates to Medicare levels, and having the federal government pick up the tab, leaving state budgets off the hook. It will allow people in the individual market to buy coverage at rates comparable to employer-based coverage. Yes, that's still expensive, but it's dramatically less expensive than the individual market is right now, when individual coverage costs 3x as much as employer-based coverage. It will end major abuses like rescission and discrimination against people with "pre-existing conditions."

I know many people have made this same point before, but keep in mind that both Medicaid and Social Security began as far stingier programs than they are now. Social Security originally excluded most of the population, and Medicaid was very bare-bones.

For Social Security, for example:

Most women and minorities were excluded from the benefits of unemployment insurance and old age pensions. Employment definitions reflected typical white male categories and patterns.<11> Job categories that were not covered by the act included workers in agricultural labor, domestic service, government employees, and many teachers, nurses, hospital employees, librarians, and social workers.<12> The act also denied coverage to individuals who worked intermittently.<13> These jobs were dominated by women and minorities. For example, women made up 90% of domestic labor in 1940 and two-thirds of all employed black women were in domestic service.<14> Exclusions exempted nearly half the working population.<13> Nearly two-thirds of all African Americans in the labor force, 70 to 80% in some areas in the South, and just over half of all women employed were not covered by Social Security.<15><16> At the time, the NAACP protested the Social Security Act, describing it as “a sieve with holes just big enough for the majority of Negroes to fall through.”<16>

Both were steadily expanded in the years following their passage.

3. What Should Be Improved in the Bill?: A few things that could improve it off the bat would be to (1) include Ron Wyden's modified Free Choice proposal, (2) allow all large employers to buy into the exchange, and (3) include Kucinich's single-payer exemption for states. Then, once it is passed, over the coming years, aim to do the following:

1. Federalize Medicaid and SCHIP. These bills take steps in that direction, but the aim should be merge or link Medicaid with Medicare.

2. Allow everyone to buy into the exchanges and merge the public option with Medicare, making it an opt-in program available to everybody.

3. Shift away from fee-for-service medicine, by shifting reimbursement for Medicaid, Medicaid, and the Public Option. I know there is criticism of Massachusetts existing health plan, but having covered everyone the state is now poised to kill fee-for-service medicine, thereby undertaking cost control that is far more ambitious than anything Congress is currently contemplating. This suggests that cost control becomes far easier once you get everybody into the system, as Krugman notes.

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I know a lot of people argue that we should kill this bill and start over. But what makes anybody think that the next opportunity will give us anything better? Every time a major health care initiative has died, it has taken 20 years to revive it, and we wind up with a worse proposal that we did the previous time around. Truman's single-payer proposal died in the late 1940s. In the 1960s, Kennedy and Johnson didn't even try for universal coverage, scaling back their demands to Medicare and Medicaid. Progressives opposed Nixon's plan, which was actually more progressive than anything that followed because they felt they could get single-payer after Nixon was out of office. Single-payer advocates opposed the Clintons' '93-'94 plan, which would have put in place dramatic cost controls and given everybody the choice of several, heavily-regulated health care plans and created a standard basic plan that all insurers had to offer at the same price. In no case has killing a health care reform effort resulted in a more progressive bill emerging the next time around.

And for all the scorn for incrementalism, in most other countries, universal coverage has come exactly that way. In Canada, universal coverage began as a province-by-province battle that took two decades to complete. In France, what they have now is single-payerish, but it evolved out of nonprofit cooperatives organized around key industries and only became truly universal (as in, 100% coverage) in the early 2000s.

This bill does a lot of good. Yes, it is far from perfect and it hardly means that we're done with reforming the health care system. Personally, though, I think it's naive to expect that we were ever going to get a perfect health care system in one bill. How many major issues are resolved with a single legislative battle? Not a whole lot. Almost every reform effort on any issue requires multiple attempts over the years.