The Republicans have no plan to insure the uninsured. How do I know that? A New York Times editorial told me. So did Ezra Klein, writing in The Washington Post. Matt Miller, also writing in the Post, went further. “I’m willing to repeal ObamaCare,” he wrote, provided the Republicans can “cover the same number of uninsured” and “do it at a lower cost.”
So why don’t the Republicans have a plan? That’s easy. “They’re against reform because it would cover the uninsured — and that’s something they just don’t want to do,” wrote Paul Krugman in The New York Times. The Times’ own editorial said the same thing.
All this has caused me to suffer a bout of severe depression. But, wait a minute. Wasn’t health care the biggest issue in the last presidential election? And…how memory fades…didn’t the Obama campaign spend millions of dollars…promoting his own plan?…no, that’s not right…
Ah, now I remember. The Obama campaign spent tens of millions of dollars on TV commercials attacking the John McCain health plan! It spent more money than has ever been spent for or against any policy proposal in the history of American politics.
The McCain plan, for all those suffering from collective amnesia, proposed to replace all existing health care tax and spending subsidies with a universal health grant, structured like a refundable tax credit. The Patients’ Choice Act version of the idea is sponsored by Tom Coburn (R-OK) and Paul Ryan (R-WI). It promises $2,300 (individual) or $5,700 (family) to everyone who isn’t enrolled in a government health plan.
So what was candidate Obama’s problem with that? Did he object that the plan wasn’t generous enough? Too few regulations? No, none of that. The Obama TV ads focused like a laser on raw self-interest. McCain’s health plan, the ads said, will cause your withholding taxes to go up (without mentioning the offsetting credit that would cause them to go down).
Think about that. The Obama campaign spent all that money attacking the most comprehensive and progressive proposal for universal care proposed by any serious presidential candidate in modern times on the grounds that somebody’s tax bill might — just might — go up!
I’ll skip over the question of how you can spend that much money on TV ads and not come to the attention of The New York Times or any of the opinion writers mentioned above, to address a point that can easily get lost with all the demagoguery swirling around. Under the McCain/Coburn/Ryan approach, the first $5,700 a family spends on health insurance is courtesy of Uncle Sam. To have the kind of coverage a typical large corporation has, employees and employers would have to kick in about $6,300 more (with unsubsidized money). Not everyone may choose, or be able, to do that. Some might add $3,300 of their own money and buy a $9,000 plan. Some might settle for whatever catastrophic coverage $5,700 will buy. But everybody — and I mean everybody who doesn’t turn down a free lunch — would have protection against large medical bills.
Let’s contrast that approach with what happens under the new health reform legislation. Recently, Health and Human Services Secretary Kathleen Sebelius gave 30,000 McDonald’s workers a temporary waiver from the new regulations so they can keep their limited-benefit, “mini-med” plans — which would otherwise be wiped out by ObamaCare regulations.
If McDonald’s lowered these employees’ wages by $5,700 and bought them $5,700 worth of health insurance, the only subsidy available today is the one embedded in the tax law — the ability to pay premiums with dollars that escape the payroll tax. (These employees earn too little to pay income taxes.) That’s worth about $872 — less than one-sixth of what the Republicans were offering.
The new health reform law will make things even worse. Because mini-med plans won’t be compliant in 2014 with ObamaCare’s mandated benefit package, McDonald’s will have to pay a $2,000 fine for each employee. In short, to get the kind of plan McCain/Coburn/Ryan would give them for free, McDonald’s workers would have to pay almost all of the cost out of their own pockets (remembering that employer payments are dollar-for-dollar substitutes for wages) and pay a net fine to the government to boot!
To be fully compliant with the new law, McDonald’s and its employees will have to spend an estimated $12,500 on family health insurance in 2014. In this case the federal tax subsidy rises to $1,913. But that implies that $15-an-hour employees will have to give up more than one-third of their take home pay! This is what backers of ObamaCare call “insuring the uninsured.”
Technically, employers and employees have another option. They could drop employer-provided insurance, pay a $2,000 per person fine and let low-income employees join Medicaid or enroll in heavily subsidized plans in newly created health insurance exchanges. But if every employer did this, the cost to the federal government would far exceed the revenues ObamaCare raises. This way of insuring the uninsured is not paid for under the new law.
For all the hoopla, the health reform law enacted last year has no practical way to insure millions of uninsured and underinsured families. By contrast, the Republicans actually had a plan. It’s a better plan than ObamaCare. More universal. More progressive. More rational. And it was funded.
But they would be foolish to trot this plan out again and start talking about it — subjecting themselves to more relentless and dishonest demagoguery — unless the Democrats are willing to renegotiate the entire health reform package.
One party cannot reform major institutions on its own. Not Social Security. Not health care. Not Medicare. Invariably, the party that tries to go it alone loses seats in the next election.