Say Thanks to a Republican Idea Day

When John McCain ran for president in 2008, he offered up a health-reform plan. Nobody paid all that much attention to it, because it was pretty clear that health care was an issue McCain didn't care about at all, and much like the "patient's bill of rights" George W. Bush had touted when he ran for president eight years earlier, it would be forgotten as soon as he took office. Four years later, Mitt Romney had something resembling a health-care plan too, but once again, nobody paid much attention to what it contained, because any time health care came up, the only question was how Romney could square his stated position that the Affordable Care Act was a poisonous hairball of misery coughed up by the Prince of Darkness himself, while the plan it was modeled after, often referred to as "Romneycare," was a wonderful thing that everyone in the state where it was implemented seems to like.

Both McCain's and Romney's plans were mostly an amalgam of ineffectual half-measures and truly terrible ideas, but mixed in there were a few proposals that might be beneficial. And now that we're just days away from the full implementation of the ACA, some conservatives will be offering up similar reform proposals again (here's one). The problem they face is that once millions of people have been enrolled in new insurance plans, you can no longer just propose to repeal the law, because that would mean kicking them off the insurance they have. "Repeal it!" only works as a battle cry when you can pretend no one would be harmed. So they have two choices: stop talking about health care entirely, or have some kind of plan you can claim you're proposing to put in its place. And Democrats can respond by agreeing to one or two of the Republicans' ideas. It sounds crazy, I know. But hear me out.

I know what you're thinking: didn't Democrats try this before? They took a Republican proposal—an individual mandate combined with subsidies for those with modest incomes—and made it their own, only to see Republicans then decide it was, depending on who you ask, "the worst thing that has happened in this nation since slavery" or worse than "the Nazis, Soviets, and terrorists combined." It's certainly possible that if Democrats began advocating for another health-care idea that Republicans currently favor, even a relatively minor one, they'll go through the same routine again. But so what? If Republicans are going to oppose anything Democrats propose, then that opposition shouldn't hinder you. You wouldn't want to delude yourself that passing any new reforms would be easy because Republicans will go along with what they've advocated in the past, but a good idea is still a good idea.

I have one in particular in mind. Most Republican proposals would have the tax system stop treating employer-provided insurance and individual insurance differently. If you buy your own health insurance, you don't get to deduct the premiums from your income, which is just one of the ways being self-employed can be really expensive (another is the fact that you have to pay both the employer and employee portions of payroll taxes). But if you get insurance through your employer, the money is taken out before taxes. That's a benefit that can cut your tax bill by thousands of dollars every year, and the self-employed and people whose employers don't offer health coverage get screwed out of it. So there are two ways to make it fair: either let everyone deduct the cost of premiums, or take away the deduction from employer-provided plans.

The latter would probably be politically impossible, but it's worth noting just how much money the government is in effect doling out to mostly middle-class and wealthy people with the current system. According to the Congressional Budget Office, the tax deduction for employer-provided health benefits cost the Treasury $248 billion in 2013 alone; over the next decade it's projected to cost $3.36 trillion. It's easily the largest tax expenditure on the books. If all that money was suddenly being paid to the government in taxes, it would be a boon to deficit reduction, but it would also be a hardship for tens of millions of people (even though the benefits do go disproportionately to those with higher incomes).

The alternative, then, is to let everybody deduct their premiums. That would certainly cost money, but particularly with millions of formerly uninsured people moving into the individual insurance market, you could think of it as an economic stimulus, which we could certainly use more of.

Democrats' understandable impulse at this stage is to just be defensive about the ACA. But they always knew it wouldn't be the last word in health care reform, and it isn't too early to start thinking about the next steps. There are a whole lot of ways we could improve on the changes that have already been made, and if at least one of them is something Republicans now claim they support? There's no harm in that.

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