I can only conclude from Paul Krugman’s most recent column on the Baucus plan that he’s so desperate to pass anything called healthcare reform that he’s willing to support a plan that most Americans don’t want, that doesn’t provide healthcare insurance coverage for all Americans, that just kicks the can down the road on solving the manifest problems with our current system, and that will only make our fiscal problems that much more intractable.
Nowhere in the column does he mention expanding healthcare insurance coverage. Presumably, that is no longer part of the narrative. The changes he recommends to the Baucus plan are to strengthen the employer option, spend more money, and retain the public option:
First, it bungles the so-called “employer mandate.” Most reform plans include a provision requiring that large employers either provide their workers with health coverage or pay into a fund that would help workers who don’t get insurance through their job buy coverage on their own. Mr. Baucus, however, gets too clever, trying to tie each employer’s fees to the subsidies its own employees end up getting.
That’s a terrible idea. As the Center on Budget and Policy Priorities points out, it would make companies reluctant to hire workers from lower-income families — and it would also create a bureaucratic nightmare. This provision has to go and be replaced with a simple pay-or-play rule.
Second, the plan is too stingy when it comes to financial aid. Lower-middle-class families, in particular, would end up paying much more in premiums than they do under the Massachusetts plan, suggesting that for many people insurance would not, in fact, be affordable. Fixing this means spending more than Mr. Baucus proposes.
Third, the plan doesn’t create real competition in the insurance market. The right way to create competition is to offer a public option, a government-run insurance plan individuals can buy into as an alternative to private insurance. The Baucus plan instead proposes a fake alternative, nonprofit insurance cooperatives — and it places so many restrictions on these cooperatives that, according to the Congressional Budget Office, they “seem unlikely to establish a significant market presence in many areas of the country.”
Something that puzzles me in the emphasis on the public option is why is it being federalized? Rather than analogizing healthcare reform to Medicare why not use Medicaid, which is administered by the states, as a model? That would be closer to the Canadian model in which the provinces are responsible for the healthcare system rather than the federal government in Ottawa. We’re a big, diverse country and we’re culturally closer to Canada than we are to Luxembourg. You’d think that the Canadian model would be more applicable to the American situation than that of the Netherlands, Luxembourg, or even France.
Perhaps proponents of the public option are hoping to capitalize on the popularity of Medicare to carry their plan across the finish line.
Every poll I’ve seen on the public option including the New England Journal of Medicine poll of physicians leads me to the conclusion that Americans prefer choice in healthcare and approve of a public option to the extent that it provides increased choice. I’d approve of it for that purpose myself.
However, it’s hard for me to see how a public option that doesn’t function under the same rules as private insurance plans and can draw on the public purse in case of revenue shortfalls won’t drive private insurance plans from the market and actually reduce choice. At least plans run by the states could be made to function under the same restrictions that prevail in the various states. Could a federal public option be made to do so?