A costly compromise

The White House unveiled its own road map for health care reform Monday, a supposed compromise based on bills already in the House and Senate. It came just days before the bipartisan summit on health care reform.

Perhaps the proposal is the opening volley in a negotiation, but President Barack Obama is unlikely to pick up much bipartisan support for his plan, and there are several reasons for that.

First, his proposal is more expensive than even last year’s hotly disputed Senate bill — $950 billion over 10 years. Worse, it delays until 2018 the primary means of paying for the bill, a tax on so-called Cadillac health care plans.

Most of the benefits — and costs — for the bill would begin in the next couple of years. But the means of paying for it would be delayed until after Obama leaves office. This from a president who continually complains that he is dealing with economic problems left by his predecessor.

Furthermore, as columnist David Brooks notes below, there is no guarantee Congress in 2018 will be any more committed to implementing a tax on Cadillac plans than it is today. Much like the proposed cuts in Medicare reimbursement for doctors, it is likely to be put off year after year.

Cost is one of two primary reasons to oppose the president’s plan. The second is that it would create an entirely new federal bureaucracy to tell health insurance companies what they may charge in the individual insurance market.

We’re not any more eager to pay high health insurance costs than anyone else, but this is a poor prescription for that problem. Those who believe that a board of federal regulators can arbitrarily determine what the appropriate insurance premium should be for each company ought to examine the failed federal price controls of the Nixon era. Shortages and public outrage were the major results. And the price controls didn’t solve the primary problem. Inflation grew worse when the price controls were in effect.

There are other problems with the president’s health care proposal. It would raise the threshold for what are considered Cadillac plans in order to alleviate opposition from labor unions and it would make it virtually impossible to grandfather in existing health insurance plans.

There are also some good provisions, such as measures that would establish health insurance exchanges for people to shop for reasonable cost insurance. And his plan does not attempt to restore the public option.

But overall, the president is pushing a very costly plan with the prospect of uncertain revenue in the distant future and the expansion of government involvement in private business.

We continue to believe that an incremental approach to health care reform — one that relies heavily on pilot programs that can be revamped or abandoned as their effectiveness becomes apparent — is a better way of moving forward now.

Furthermore, as was demonstrated by the vote on the jobs bill earlier this week, some Republican senators — including new Massachusetts Sen. Scott Brown — are willing to support Democrats if they believe the legislation warrants it.

The president’s plan won’t get that sort of bipartisan support, nor should it.


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