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Victory (I Hope) March 21, 2010

Posted by Dwight Furrow in Dwight Furrow's Posts, politics.
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Assuming, as expected, that the Senate plays ball, we will have Health Care Insurance Reform.

This is indeed an important victory and an historic moment. And it is testimony to Obama’s political skills and the policy chops of Senate and House Democrats.

Although the process has been exhausting and frustrating and the deal-making ugly, the result is impressive. Ezra Klein provides an excellent summary of the accomplishment:

This was a hard bill to write. Pairing the largest coverage increase since the Great Society with the most aggressive cost-control effort isn’t easy. And since the cost controls are complicated, while the coverage increase is straightforward, many people don’t believe that the Democrats have done it. But to a degree unmatched in recent legislative history, they have.

Furthermore, the bill reduces the federal budget deficit.

All of this was accomplished in the face of lies about “death panels” and “government takeovers”, deep cynicism, outright threats, an utterly polarized electorate, and powerful interest groups who could easily have scuttled the effort. Ezra Klein again:

This year, the Obama administration succeeded at neutralizing every single industry. Pharma supports the bill. Insurers are incoherent on it, but there’s not a ferocious and united campaign to kill the proposal. The American Medical Association has endorsed the Senate bill. The hospitals have endorsed the bill. Labor has endorsed the bill. The business community is split, with larger employers holding their fire.

The legislation isn’t perfect—far from it. And one could argue that Democrats should have pushed for a better bill, ditched the attempts at bi-partisanship that failed to garner a single Republican vote, and resisted the influence of the insurance companies who will likely come out winners from all of this.

But truth be told, there was not a lot of room for maneuver. The compromises were probably necessary given the political climate.

The unsung hero here is Nancy Pelosi who mastered the end game and guided this legislation through a House Democratic caucus with sharp ideological differences in an election  year.

But with all the celebration, a note of caution is in order. As Robert Reich wrote recently:

Nothing that’s legislated is perfect and in my view the good that will come from passing health care legislation outweighs the bad, but be warned: the pending House bill (that will go to the Senate for a “reconcilation” vote) does not repeal the antitrust exemption for health insurers, nor does it contain a public insurance option. It thereby will allow health insurers to continue to consolidate into even larger entities, gain as much market power as they can, and charge ever higher prices. Yet Americans will be required to buy health insurance from them. Assuming the bill becomes law, this dissonance spells trouble. It will have to be addressed before 2014, when the bill takes effect.

The real work starts now. This is complex legislation that must be implemented correctly if it is to have the desired effects on health care coverage and cost reductions. And much of the bill does not take effect until 2014—that is a lot of time for mischief-makers to derail the effectiveness of this much needed reform.

book-section-book-cover2 Dwight Furrow is author of

Reviving the Left: The Need to Restore Liberal Values in America

For political commentary by Dwight Furrow visit: www.revivingliberalism.com

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Comments»

1. Nina Rosenstand - March 23, 2010

Dwight, I usually don’t comment on political posts, because I prefer to channel my blogging energy into other types of discussion, but I do want to point out that there will be surprises embedded in this enormous piece of legislation that some people have yet to discover. The watchdog for implementing the mandatory health insurance will be the IRS, with the result that the government (+ any future government) will have direct access to at least some of our finances. Another surprise to many is that the health reform will be partially financed through a restructuring of student loans. It was folded into the package. This may result in tuition fees rising, again. And since I come from a culture of nationalized health care, I do have to point out that rationed health care is the order of the day in a system of government-managed health care, not a figment of conservating minds. I have lost two uncles to rationed health care. As much as I think universal health care is a positive thing to have implemented, I worry that this is not the plan that will be optimal for the United States.

Dwight Furrow - March 23, 2010

Nina,

This is surely not an “optimal plan”. It has many limitations, not the least of which is the lack of controls on skyrocketing health care costs, which the public option would have put in place. But as with any piece of major social/economic legislation it can only pass Congress by buying off various interest groups. And its’ defects when they become known can be fixed through legislation. None of the social legislation we take for granted today, such as social security and Medicare, started life as an optimal policy. It became effective only through legislative tweaks and gradual improvements. So this is far better than nothing.

As to the IRS having access to information about whether I have health insurance or not, I don’t see the problem. The IRS already has mountains of data on our personal finances. I don’t see this as an additional threat to privacy.

And it is not the case that money designated for student loans is financing health care. The two bills were packaged together in order to get past a Republican filibuster and to “sweeten the pot” for Democrats who support student loans but were wavering on health care. There is no other relationship between the bills.

As to this particular bill driving tuition higher, I don’t see the relationship. Tuition has been increasing faster than the rate of inflation for years. I doubt that increasing Pell grants will contribute significantly to that. Some economists think all student loans cause increases in tuition because the availability of loans give colleges an artificial sense of a family’s ability to pay. Colleges thus have fewer incentives to control costs. But if this is a cost driver (and there is no consensus about this) it is not peculiar to this bill, which uses the money saved by getting banks out of the picture to increase Pell Grants. Getting rid of student loans is hardly a solution to tuition increases.
Finally, this bill does not introduce health care rationing. Health care is already rationed according to income, pre-existing conditions, arbitrary decisions by insurance companies, or whether your employer offers benefits. Thousands of people die every year because of our current system of rationing. It is hardly a rational system.

Since health care is a scarce resource, there must be rationing of some sort. It seems to me (not having read the entire bill!) that insurance companies are still making decisions about how much they will pay for procedures, subject to some regulation by government. It remains to be seen how much government regulation there will be in the future. I don’t think this question about how we ration care has been answered yet and there is no public consensus of what a fair system of rationing looks like. So it will be an ongoing debate that is in many respects orthogonal to this particular bill.


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