Republicans have been gnashing their teeth and rending their garments, lamenting the landmark passage of health care reform late Sunday night. The Tea Party wing of the party has been vowing that this isn’t the end of the fight over healthcare — it’s just the beginning.
While House Minority Leader John Boehner’s response to the health care bill (not least its tax hike on tanning salons) has been a “hell no,” the more pragmatic thinkers on the other side of the aisle have been bemoaning the GOP’s Waterloo. David “Axis of Evil” Frum, who coined the “Waterloo” phrase, has laid out some constructive responses Republicans can take up on health care — and he’s making more sense than most in the party of Lincoln.
Frum outlines four ideas that Republicans should get behind:
1) One of the worst things about the Democrats’ plan is the method of financing: an increase in tax on high-income earners. At first that tax bites only a very small number, but the new taxes will surely be applied to larger and larger portions of the American population over time.
Republicans champion lower taxes and faster economic growth. We need to start thinking now about how to get rid of these new taxes on work, saving and investment — if necessary by finding other sources of revenue, including carbon taxes.
2) We should quit defending employment-based health care. The leading Republican spokesman in the House on these issues, Rep. Paul Ryan, repeatedly complained during floor debate that the Obama plan would “dump” people out of employer-provided care into the exchanges. He said that as if it were a bad thing.
Yet free-market economists from Milton Friedman onward have identified employer-provided care as the original sin of American health care. Employers choose different policies for employees than those employees would choose for themselves. The cost is concealed.
Wages are depressed without employees understanding why. The day when every employee in America gets his or her insurance through an exchange will be a good day for market economics. It’s true that the exchanges are subsidized. So is employer-provided care, to the tune of almost $200 billion a year.
3) We should call for reducing regulation of the policies sold inside the health care exchanges. The Democrats’ plans require every policy sold within the exchanges to meet certain strict conditions.
American workers will lose the option of buying more basic but cheaper plans. It will be as if the only cable packages available were those that include all the premium channels. No bargains in that case. Republicans should press for more scope for insurers to cut prices if they think they can offer an attractive product that way.
4) The Democratic plan requires businesses with payrolls more than $500,000 to buy health insurance for their workers or face fines of $2,000 per worker. Could there be a worse time to heap this new mandate on smaller employers? Health insurance comes out of employee wages, plain and simple. Employers who do not offer health insurance must compete for labor against those who do — and presumably pay equivalent wages for equivalent work.
The first point is red-meat, tax-cutting rhetoric for the Republican base – not much to see there.
The third point is very broad, but middle ground could be easily reached. Everyone is against “over-regulation” but everyone is for “consumer protection.” Finding the middle ground to give patients the best set of alternatives should be a key goal as the regulations of health-exchanges are spelled out.
The fourth and final point, while a good-faith effort to protect engines of job creation from additional burden, misrepresents the small business coverage of the health care reform bill. The small business provisions of the bill exempt companies with less than 50 employees. The only way Frum’s payroll figure would make sense is if each employee was being paid $10,000 a year. At that point they’re eligible for health care subsidies of almost $50,000 for a family of four.
But it’s Frum’s second point that progressives should consider. Employer-based health care has been a long-term roadblock to innovation and job creation. (The whole story can be heard here.) Moving from a system where insurers try to sell packages to employer HR departments to one where patients can make choices themselves on the exchanges envisioned in Sunday’s historic bill can save up to 40 percent of what we’re spending on health care. But many of us getting health care through our employers don’t have the option to look to the exchanges. (The Washington Post has a handy tool you can use to see what your health care options will be come 2014.)
We should take sensible Republicans like Frum at their word and look to give more people the opportunity to embrace the benefits of choice that will be brought around by health exchanges. Maybe by getting behind an idea like the Wyden proposal we can get Republicans like Frum to embrace the president’s vision of working in a bipartisan manner.