The CAP Health Care Plan

Now for the promised health care post. I don't claim to know as much about health policy as Brad does, so his objections -- that stopgap measures will make bad policy and we really need to go to single-payer -- should be taken seriously. Not only that, but I agree with them. Nevertheless, politics is the art of the possible (and occasionally, the train-wreck of the impossible), and there's simply not a constituency for single-payer right now.

I should back up here. The CAP plan, released yesterday, works like this:

• Coverage for All

• Expand the Federal Employee Health Benefits Program (FEHBP) to anyone lacking job-based health insurance, any employer who wants to buy in, and any individual who wants to buy in. In addition, contributions to the plan would be capped at 5-7.5% of income so no one was felled by health care costs (good call, since the new bankruptcy law allows them to put you in the stocks if a health catastrophe takes out your finances). For those who paid over, a tax credit would be assessed.

• Expand Medicaid to cover anyone below 100-150% (a number would be chosen) of the poverty line. Currently, various states have differing eligibility requirements. No longer. Everybody making X or less is covered. In addition, the federal government would take on all increased costs.

• Health care is mandatory. Now that everyone can buy into a plan, if you don't, you're charged an income-related assessment under the rationale that you will eventually use health services.

• Improve the Value of Coverage

• Create a national focus on disease prevention and wellness. Coverage for preventive services would be carved out of private insurers. Would be directed be the U.S preventive Services Task Force. Standard stuff though, like Brad, I'm a bit unclear on their proposed structure.

• Develop better comparative information on treatments. Currently, most medicines are studied in a vacuum -- do they beat the placebo? This'll put money towards funding studies pitting them against each other in an effort to figure out which drugs and procedures are most cost-efficient and effective.

• Increase the use of IT.

• Financing

• The plan would cost between $100-160 billion a year. The authors think it'd lead to substantial savings, but since they can't be accurately predicted, they're not assumed. So how to pay? The answer is a dedicated financing source -- a 3-4% VAT tax, similar to what the EU uses. Along with us, Australia is the only developed country without a VAT tax. Why a VAT? It's quite fair, hard to get out of, and even some conservatives, like Bill Thomas (he of the "President's privatization plan is a dead horse" fame) support it.

So what? It's not single-payer, which Brad says we need, and I agree with. But I don't think it's possible. Don't believe me? Just check out Jeff Jacoby's scare op-ed from a few days ago, imagine a 24/7 drumbeat of those. This plan, even if the FEHBP is a bit inefficient, is quite good. Most health care economists I've read seem to think it a perfectly desirable way to expand coverage but, more importantly, it's enormously powerful politics. One of the stronger arguments used by Republicans in favor of privatization is that Senators use it -- I assume they mean 401(k)'s -- so why shouldn't Americans? Well, congressmen use FEHBP too. So does most every federal employee. Arguing that every American should have the right to buy into the same health care plan that the country's leaders use is a very, very strong argument. From there, if the plan proves inefficient or problematic, we can set about making the necessary changes, tweaks, and improvements.

The critical thing, for now, is to codify universal coverage as part of the American consensus -- this plan does that, and it does so in a way that I think can pass. And that's the important thing right now. It's not that i don't want single-payer, in fact, i think we'll need it eventually. But for now, we can't get it, and in the meantime, too many languish with nothing. If we can push the conversation to accept universal health care as a given, a necessity, then we can argue about how best to do it, the left can emerge with their single payer plans, the right can try and stop them, etc. At the moment, Democrats need to regain momentum on the issue, recent years have seen all the energy with Newt and his absurd HSA's.

The one downside I see to this proposal is that, assuming Brad's fears are correct and it doesn't work well, it could quell the appetite for government-run health care when the real solution is more government-run health care (God, do I sound like a liberal or what?) or, if it works moderately well, accustom people to this stopgap approach and kill the demand for single-payer. That's in contrast to Arnold Relman's argument from a recent TNR, which is that HSA's would be such a free-market disaster that they'd create a consensus for single-payer.

Maybe so, but I'm always skeptical of plans like that working as we'd expect. Republicans can still demagogue over the few protections Democrats have kept in place, Americans can just think anything promoted by the government is crap, etc. So I don't like those risks. The CAP plan, by contrast, looks to me like an excellent stop-gap measure, and one with the political sweeteners to pass. Havving just read a book on the failure of Clinton's health care proposal and having watched Bush's privatization plan take a battle between the eyes, I've little confidence in America's appetite for major change. So, for now, I come down on the side of single-payer as essentially impossible, and not worth holding out hope for. The promise to cap premiums might be a bit unrealistic, but it's brilliant in a debate of this kind -- you could sell the plan by repeating that point over-and-over. And, looking at how bad health care in this country has become, I think we should.

By the way, I really enjoyed reading the plan and writing this post (hope you guys liked reading it). Brad's right -- I am being assimilated. What's scary is that I like it.

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