05 May 2009

Point of Order

Matthew Yglesias » Killing Health Reform With Kindness
Ezra Klein observes that Arlen Specter says he’s for the Wyden-Bennett approach to health care reform but also says he’s against eliminating the tax exemption for employer provided health care. Inconveniently, eliminating said deduction is part of the Wyden-Bennett plan. That’s how you pay for it.
This came up in the comments the other day, also.  Bastiat's Ghost (great handle) wrote:
We could also remove the link between health coverage and employment. The problem is Shadowfax is against it in spite of the fact that the McCain health reform plan was originally proposed by Jason Furman a current adviser to the President.
It would be inaccurate to say that I don't support this de-linkage.  In fact, I'm a long-time enthusiast for the Wyden-Bennet Healthy Americans Act, which does exactly that.  I don't think the HAA has much of a chance of being the legislative vehicle through which reform is enacted, which is a pity.  One problem is that people who tend to agree that major reform is needed also tend to be reasonably content with the coverage they currently have -- or conversely, they are easily frightened by the unknown changes they might be required to change to under a reform plan.  The beauty of the Baucus plans that are under discussion is that they generally allow the employed the option of retaining their current coverage, assuming their employer continues to provide it.  But the HAA would create a radical restructuring of the market and people might have to change plans, and it's just too much to swallow, politically.  (Prove me wrong, Congress!)

It is true that I opposed the McCain plans which also de-linked employment and insurance and taxed the employer-sponsored plans as income.  The primary reason that I opposed these steps is not because they are destructive in and of themselves, but because the plan did not replace the current insurance options with anything better.  

Now if universal coverage is going to pass, it will need to be funded somehow.  The Congress didn't like Obama's "down payment," I gather, so it's off the table.  Pity -- it was a reasonably progressive mode of funding it.  If the next best way of funding it is through taxing health benefits, I am OK with that, though it seems regressive and suboptimal to me.  The funding issue, to me, is a case of not letting the perfect being the enemy of the good.  If there really are benefits of pushing people into the individual insurance markets (or if there is eventually a viable public option) then it might even wind up a feature, not a bug.

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