THE BLOG
12/22/2007 12:39 pm ET Updated May 25, 2011

California Health Reform and the Limits of "Left/Right" Paradigms

One of the most puzzling turns in the healthcare debate has been the insistence of some politicians and observers that mandating health coverage is a "progressive" thing to do. As Jamie Court rightly observes, it"s not. Medicare-For-All is the only truly progressive approach (although it has serious problems), while mandates - whether advisable or not - are not leftist or liberal by any recognizable historical definition. They are, in fact, "regressive" in both senses of the word - as in "regressive" taxation, and as in favoring the status quo (private-sector health insurance) over dramatic change.

That's why health insurance companies stand to benefit from enactment of mandate-driven plans like those proposed by Edwards, Clinton, and the leading states (see the Wall Street Journal, "Health-Care Plans Aid Industry.")

I admire many of John Edwards' positions and find much to appreciate in his health plan, but when he introduced the slightly hectoring phrase "shared responsibility" into the discussion (later adopted by Hillary Clinton) he was appropriating a right-wing concept. Like other health policy analysts, I recognize that failure to insure all Americans will result in maldistribution of risk. That's the economic problem mandates seek to redress. But are they the right answer?

This is where "left/right" labels break down. Arnold Schwarzenegger's proposal, which passed the California Assembly last week, is more "progressive" than either the Edwards or Clinton plans. Paradoxically, that's because - like the Massachusetts plan - it finally abandoned that idea that it could use mandates to "guarantee coverage for all."

Massachusetts has exempted 20% of the uninsured from its mandate, while California lawmakers have now set their figure at 30%. Both of these states have been forced to recognize that universal coverage through mandates is impossible unless you create severe financial hardship for some people - which they were thankfully unwilling to impose. Unfortunately, the hidden flaw in these types of plans is now exposed: Mandates cannot provide universal coverage without unacceptable economic pain.

The California plan has other problems. For example, it attempts to relieve the premium burden on the middle-class through the use of tax credits, a mechanism favored by conservatives. That could fail for any number of reasons, including the fact that costs could easily exceed a family's total state taxes.

Our society already has a tool for funding our "shared responsibilities." It's called taxation, and it's designed to avoid placing catastrophic financial burdens on any one economic group. Yet Clinton, Edwards, and allies like Paul Krugman continue to push the idea that health reform plans aren't "progressive" unless they force everyone to purchase private insurance. Then they boast that their plans "cover everyone." They do, in a way - the same way that a shotgun wedding "helps you find your soul mate."

The pressure to discuss health reform as a "left/right" issue will apparently continue. So for those who are attached to that particular paradigm, here's a categorical breakdown of health reform concepts on a progressive-to-conservative spectrum (it is, of necessity, imperfect):

  1. Most progressive:  Medicare-For-All, aka Single-Payer.
  2. Somewhat progressive (but with a libertarian twist):  Guaranteed basic coverage for all, paid from tax revenues, with "vouchers" that can be applied to private coverage.
  3. Moderate-to-progressive:  Obama-like plan to reduce costs and improve IT platforms, without mandating coverage (while retaining the option to do so later).
  4. Moderate:   Schwarzenegger-like plans to mandate coverage except where impractical and/or burdensome to individuals (with plans to mitigate the problem later).
  5. Somewhat conservative:  Clinton-Edwards style plans that mandate "shared responsibility," meaning every American must purchase health insurance even if that proves financially burdensome.  (Note:  Like #3 and #4, these plans provide financial assistance for lower-income individuals, but lower-middle-class families are likely to be hit hard.)
  6. Conservative:  Maintaining the status quo.
  7. Radically conservative: Giuliani and Bush "reform" plans that combine the eradication of employer-funded insurance with a mythical "free market" in health coverage.

I'm not a knee-jerk anything, and the most "progressive" answer isn't always the right one. (Usually - but not always!) I don't support a straight "Medicare For All" approach, for example, because I have yet to see advocates for this position acknowledge and address the many technical problems and massive dislocations that would result. (A major initiative might help address these problems.) So #2 is closest to my own position.

I was highly critical of the Massachusetts plan when it was enacted, for the same reasons I've criticized the Clinton and Edwards plans: because it was clear that it would never be able to accomplish what it promised. Neither will either of these Democrats' proposals. Although they boast that "their plans cover everyone," a President Edwards or President Clinton will almost inevitably reverse themselves on mandates just as Massachusetts and California have done. And that will be the right (or should I say the left?) thing to do.

Once we've abandoned the illusory objective of coverage-through-enforcement, hopefully we can start work on meeting a goal that is at once more idealistic and more pragmatic: to provide healthcare to everyone without creating an unfair financial burden for anyone. To do that, we will have to ensure that private sector profits aren't excessive, and that each American is guaranteed a basic level of medical care - without being forced to pay insurance premiums that are based on a private-sector model.*

Let others worry about who's the most ideologically "left." When it comes to health care, I'd rather worry about who's being left out.

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*The Edwards plan would allow people to join Medicare and pay their premiums to the government. That's an excellent idea, but it leaves a premium structure in place that is based on private-sector underwriting. There are other, better models - including paying for healthcare out of general revenues, or the premium model now in use in Germany. Space limits prevent more detailed discussion.

Conflict-of-interest statement: My consulting practice occasionally involves health insurance work, although it hasn't for some time. I could therefore either be accused of being "a hard-right shill for the insurance companies" (it's been said), or of nobly jeopardizing my own income possibilities in order to advocate for the best social outcome. You're free to draw your own conclusions.

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