THE BLOG
03/18/2010 05:12 am ET | Updated May 25, 2011

Health Reform In Hindsight

Before they entered an indefinite hiatus, the band Matchbox Twenty released the song "How Far We've Come" which posed that title in the form of a joint exploration-style question: "Let's see how far we've come." Today, after being asked by a friend to weigh in on the pros and cons of their just-reached deal, I'm asking that question of the Senate on the issue of health reform. They've been working on it for a while now, compromising things away, while getting little to nothing in return. In fact, here's just how far the public option has come (click to enlarge):

What should be painfully obvious from the above chart is that the public option is dead. If you don't believe it, I suggest you go here and read this, this, and this. The apparent "throwing away" of health reform has progressives up in arms. In fact, past presidential candidate and former Governor of New Hampshire, Howard Dean, is on the record as saying that if he were a senator, he "would not vote for the current health care bill." Some are even saying that the Senate bill is so bad at this point that it hurts the Dems more if it passes than if it doesn't. New York Times pundit David Brooks is somewhere in the middle (coward). Who can we thank for this watering-down of health reform? Most fingers are pointing at Joe Lieberman, who has done a great deal of holding health reform hostage by withholding his vote in the most irrational of ways (flip-flopping on issues like a Medicare buy-in is just one such way--and he's on video doing that). Once the public option was killed, Lieberman came onboard and got the Dems to 59 votes.

The final holdout, though, was pro-life Sen. Ben Nelson (D-NE) who finally agreed to vote for the bill after several concessions, including tighter restrictions on abortion funding were included. All of these holdouts just draw attention to the absurdity of requiring 60 votes in the Senate to end a filibuster and actually *gasp* hold a vote. As I and a colleague of mine have written in this space before, the filibuster is a very real threat to our system of representative democracy. The power given to any single Senator allowing them to demand benefits to their home states exclusively--as Nelson's deal with Reid does--is not just. But politics is sadly not fair. It is the art of the possible.

But there's much more to health reform than the public option. In fact, there's still plenty of good stuff left in the legislation. It would change a lot of important things about the way our health care system currently works, and it would extend coverage to most of the people who don't have it now. While it doesn't do a whole lot to control costs at this point, it does put important insurance regulations in place, and it can tackle the cost issue as the next item of business. In fact, here's a run-down of some key provisions and my take on what's good or bad about them:
  • Individual mandate - This is a great thing. After all, insurance is a risk pooling mechanism, and it works better the bigger the pool is. It also allows Congress to ban insurers from denying coverage for pre-existing conditions. If you don't have a mandate, healthy people would not get coverage until they got sick (remember, no pre-existing condition exclusions) and that would destroy the very principles upon which the insurance industry rests. The only issue here has to do with the level of the subsidies being adequate, so that lower-income individuals who do not qualify for Medicaid are actually able to purchase coverage. The mandate is enforced with a fine, but fining people for not getting coverage is not likely to be well-received. Fortunately, there are some good alternatives to that floating around.
  • Insurance across state lines - While this is limited to plans participating in the exchange (all new plans), it is both good and bad. It is good because it eliminates the non-competitive insurance markets that exist today, and this has the potential to drive down costs, but this ability will be limited by the lack of competition (i.e., consolidated power) in the provider markets, which ties insurers' hands. Also, there's a very real risk that insurers will choose to locate in states with more lax insurance regulations, which could hurt beneficiaries. The federal government can preempt state laws, however, and I'm not yet sure how far they go in this regard to set minimum requirements of all insurers.
  • Reform is paid for - Yes, there are new taxes--most of which are levied on the very wealthy (individuals earning over $200,000 a year)--but there are also significant savings to be found by eliminating wasteful spending from the Medicare program. That's something that is fiscally responsible and should have been done ages ago even if health reform weren't on the table.
  • So much more - There's a lot more in the Senate's bill than I could possible hope to discuss here. The bottom line is that it is good, not great, but does not threaten to do the things Republicans say it will. They are motivated primarily by the fear that the Democrats will do something good, and you'd do well to remember that that's usually the case in political matters.
So while the legislation has fallen far short of ideal, I'm still for it. Pulitzer prize winner and Princeton sociologist Paul Starr shares my view. So does Nobel prize winning economist Paul Krugman. And Hank Aaron a Senior Fellow at the Brookings Foundation. Almost anything at all would keep the door ajar--even if only slightly--and keep the reform movement going, making future incremental improvements to the health care system imminently more doable than attempting to put reform back on the table anytime in the next decade or two if it fails now. So, just how far have we come? Farther than we ever have before. Now is not the time to throw in the towel.

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