Magazine article The American Prospect

Underrating Reform: Even with Its Compromises, Health Reform Is the Most Ambitious Effort in Decades to Reorganize a Big Part of Life around Principles of Justice and Efficiency

Magazine article The American Prospect

Underrating Reform: Even with Its Compromises, Health Reform Is the Most Ambitious Effort in Decades to Reorganize a Big Part of Life around Principles of Justice and Efficiency

Article excerpt

If Congress can complete work on health-care legislation and send it to the president (as of mid-January, the final bill is still under negotiation), it will be a stunning historical achievement and the most important liberal reform since the 1960s. It may also be the most underappreciated social legislation in recent history. Never in my experience has such a big reform been treated as so small. Never have Democratic members of Congress who are putting their careers on the line for something they believe in been so vilified as sellouts by influential progressives. And never have those progressives been so grudging in their endorsement of landmark legislation or so willing to see it defeated.

How this happened is clear. Facing united Republican opposition, Democratic leaders made a series of concessions to win over centrists in their own caucus and to neutralize key interest groups. One point of contention--the public option--came to symbolize hopes on the left, and when that provision was unable to pass the 60-vote hurdle in the Senate, some progressives such as Howard Dean concluded that the entire bill had been gutted.

But that conclusion is wrong. The legislation would be a major advance in two important respects. After a long period of rising inequality, it would boost the living standards of low-wage workers and their families and improve economic security for the middle class as well. And it would be the most ambitious effort in recent history to reorganize a major institution on a basis that agrees more closely with principles of justice and efficiency.

In an ideal world the bill would be stronger, but we have to measure it against current reality and as a foundation for future progress. On those criteria it measures up well.

Here is our current reality: In most states, insurers can deny coverage to people they deem too great a risk, exclude preexisting conditions for others, and charge however much they want based on health, age, or other characteristics. Routinely, subscribers whose health deteriorates have their coverage cancelled. Under existing law, insurers have an incentive to design every aspect of their business so as to avoid individuals with high health costs. People who obtain coverage individually or through small employers get an especially bad deal because they lack the purchasing leverage of large employee groups.

As a result of these and other problems, about 46 million Americans are uninsured at any one time, and millions more have no coverage for pre-existing conditions or discover when they get sick that their policies have loopholes and limits that leave them bankrupt. Many people are locked into jobs for fear of losing insurance. Those without coverage are more likely to postpone treatment and to be denied care. Even before the recession, these problems were on the rise, and there is no prospect of their being solved privately; the share of employers providing health benefits dropped from 69 percent in 2000 to 60 percent in 2009.

And here is how the legislation would change that reality: It would expand coverage, first, by extending eligibility for Medicaid to people with incomes under or near the federal poverty line and, second, by subsidizing private insurance for people earning up to four times the poverty level. More than 30 million people would gain coverage as a result (the more generous the subsidies, the higher that number). The basic rules of the insurance market would change. Insurers could no longer exclude pre-existing conditions or charge according to an individual's health; they would be required to issue a policy and renew it for any legal applicant; and while they could vary premiums by age, they could do so only within limits, unlike current practice.

The law's central organizational innovation would be to create insurance exchanges offering multiple insurance plans, initially for those in the individual and small-group market, to give them the buying leverage and benefits of choice enjoyed by workers at larger firms. …

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