Waiting for Finance - The American Spectator | USA News and Politics
Waiting for Finance

The health care push is deadlocked right now as everybody waits to see what emerges from the Senate Finance Committee, where Republicans Chuck Grassley, Mike Enzi and Olympia Snowe are trying to hash out a deal with Democratic Chairman Max Baucus and two other more moderate Democrats. But the dribs and drabs of information we do have about what they are considering make it sound like a plan that would be acceptable neither to conservatives nor liberals. From what we know so far, that the deal is likely to create some sort of non-profit co-op insurer to compete with private insurers as a substitute for creating a new government-run plan and it will drop a mandate that would tax employers who did not provide health care. 

For liberals, this would simply be unacceptable. To them, the creation of a government-run plan is not just one feature among many, but the central part of reforming the health care system — this is especially true among those who are single-payer advocates at heart. And liberals don’t think that a non-profit co-op would have the scope to really drive down prices and threaten private insurers (or as they would say, “keep private insurers honest”). Asking them to drop a government plan is difficult enough as it is, but to also drop the idea of an employer mandate will be even harder to swallow. Furthermore, as we’ve seen so far, having an employer mandate helps the evaluation of the Congressional Budget Office. Not only does the tax raise some money and help marginally with financing, but the CBO thinks that if employers would face a penalty for not providing coverage, few would drop coverage — meaning the mandate makes it easier for Democrats to claim that people who like the insurance they have, can keep it, and helps them get closer to universal coverage. Absent the mandate, the CBO has found, a lot more employers would drop coverage — providing Republicans with the talking point that millions would lose their employer-based health care.

At the same time, assuming the agreement maintains features of other bills, I don’t see how it would be acceptable to any actual conservative. While a co-op would not be as bad as a government-run plan, we’d most likely still end up with a system in which government provides subsidies to individuals to purchase government-designed insurance from a government-run exchange. And if they want the CBO to score the bill as coming close to universal coverage, those subsidies would have to be generous, and the bill would also have to include an expansion of Medicaid. Both in terms of regulation and the creation of the exchange, you’d still be creating the infastructure for the eventual government takeover of health care. You’d basically have a system like the failed and financially unsustainable model they have in Massachusstets. As time goes by, Congress could easily make more people and employers eligible to join the exchange, and perhaps add a government plan down the road (or even take over the co-op plan if it runs into trouble).

Politically, a Finance Committee agreement before recess would provide some face-saving momentum for the Obama administration, and allow them to point to some bipartisan cooperation. But I don’t see how it solves the larger issue — how do you create a bill that is acceptable to both liberals and moderate Democrats?

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