Magazine article The American Prospect

Harry, Louise, and Barack

Magazine article The American Prospect

Harry, Louise, and Barack

Article excerpt

What are our fondest hopes and worst fears for the health legislation now slouching towards the president's desk? On the plus side, it will cover slightly more than half of America's uninsured, qualify more of the near-poor for Medicaid, and it may lead to some greater rationalization of health outlays, though exactly how remains to be seen.

On the minus side, the plan leaves most people dependent on employers for health coverage and reinforces the political and economic power of the private insurance industry. It subsidizes insurers with more than half a trillion public dollars over 10 years, mainly using tax credits. And it gets most of that money by requiring savings in Medicare and other federal health programs of about $400 billion and by taxing so-called Cadillac insurance policies--many of which are actually Chevrolets that cost a bundle because of the present system's inefficiency and tendency to penalize older and sicker policyholders.

Largely missed in the debate is the fact that the plan doesn't address the problem of unraveling coverage for people who are insured--some 86 percent of the population. According to a Commonwealth Fund study, there were 25 million underinsured Americans in 2007, meaning that high deductibles and co-pays and uncovered treatments or services left them nominally insured but often unable to get the care they needed. That's a 60 percent increase since 2003, and nothing in the bill prevents this crisis from worsening.

In short, the plan has reasonably good safeguards for the new subsidized policies for the currently uninsured, but it leaves intact the problems afflicting the rest of the system. The government won't use its power to negotiate wholesale drug prices; insurers are free to keep increasing premiums, deductibles, and co-pays at will. The bill does help the uninsured, but the basic flaws remain in the existing system for the rest of us.

These weaknesses are the consequence of the Obama administration's political calculation that it was better to have the insurance industry's Harry and Louise supporting the president than opposing him. But that was a political choice, not an inevitability.

The road not taken was a tough reform campaign pitting the citizenry against a widely resented industry. Instead, the right has deftly turned much of the resentment against President Obama, using the Medicare savings to make bogus claims about death panels for Grandma (when it's actually private insurers that cause suffering and even death by denying necessary care). …

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