Sunday, June 21, 2009

Universal Healthcare's Time Has Come

President Obama is planning on moving ahead shortly with his plans on universal healthcare. The details are vague, but the goal is not: to cover all of the uninsured and improve a broken system.

The chances are much improved for passage this time around for a couple of reasons. First, President Obama has a mandate that Clinton did not. When Clinton was elected in 1992, it was with 43% of the vote. Had Ross Perot not been in the race, he might well have lost. This prevented Clinton from being the dominant figure he needed to be. By contrast, Obama won 53% of the vote and 364 electoral votes. He has a high approval rating and has more stature to push a bill through.

Second, the Democrats have more power. When Al Franken is finally seated, there will be 60 Democrats, enough to shut off a filibuster. There is some diversity in the Democratic caucus to be sure, but I doubt any Democrat wants to run afoul of the party leadership, risk a primary challenge, or stunt potential for national office by voting with the Republicans to filibuster healthcare.

Finally, there is a greater public perception of the problem. A broad majority of Americans 62%-32% according to a recent ABC News/Washington Post ( support universal coverage. People are increasingly dissatisfied with their care and worried about whether they can afford skyrocketing insurance premiums. True, there is disagreement over issues like whether there should be a mandate. But in general, there is a greater consensus for healthcare than there has been in the past.

This is not to say that there are no obstacles. The insurance and drug industries will mount furious challenges. They will try and stoke fear, perhaps by invoking Henry and Louise from their efforts in the early 1990s to defeat universal healthcare. And Republicans will surely fight hard as well out of ideology.

The greatest conflict could come over the public option. Republicans and assorted lobbying groups will claim this will make private insurers go out of business. But this need not be the case. There will always be a market for insurance that provides services above and beyond what the government does. France, which has a government run system, also has private insurers citizens can turn to for supplemental insurance. Canada is unique in not allowing people to buy private insurance for treatments the government covers. No Democrat is proposing such an idea, nor should he.

Furthermore, a public option is the best way to contain costs. Just providing vouchers for people to buy private care won’t. Many insurance companies don’t have an incentive to pay for preventative care because people are not on one plan over a 30 year time horizon. So the company won’t benefit from reduced costs down the road. But the government would stand to benefit when taking preventative measures reduces the likelihood of having to pay for say an expensive coronary bypass surgery.

There are two other ways a public plan will reduce costs. The first is competition with the private sector. In order to stay afloat, private insurers will need to reduce waste and over head and offer lower premiums. Or they will have to offer truly amazing services to get people to buy their plans. People who prefer private insurance will thus benefit in the form of lower benefits. The second is that a public plan will be well suited to caring for people with genetic or preexisting conditions. Private insurers often charge high premiums to compensate for taking on these patients (to the extent that they don’t turn these patients away). Decreasing the amount of risk in the company’s risk pool will also allow for lower premiums.

Allowing Democrats to pass universal healthcare, an entitlement which will benefit millions of working and middle class people would be bad politically for Republicans. The Democrats will get credit, and when Republicans want to cut taxes, they fear Democrats will be able to charge that the revenue will come out of healthcare. But ultimately, this looks like a winning fight for Democrats.

1 comment:

  1. Yglesias agrees with you: that it's a winning fight.