The UWIRE Forum

What young Americans want in health care reform
July 30, 2009, 11:09 am
Filed under: Uncategorized
Chris Burks

Chris Burks

Young Americans want health care reform now, but many of the plans going through Congress currently will only reform our health care systems at the margins, and would leave the youth stuck with a massive bill.

If America is to engage in systemic health care reform, we should do it wisely when the political will and firepower exists — regardless of the seemingly large cost estimates. Our elected officials shouldn’t cower away with sticker shock simply out of an aversion for big numbers. The American economy can, and must, absorb the costs of an investment in efficiency.

The present health care discussion is somewhat limited, at least among those who are arguing for reform because it largely consists of two competing coverage solutions and payment mechanisms.

On one side, we have a progressive payment mechanism, an income tax surcharge on the ultra-wealthy like Warren Buffett, coupled with progressive coverage expansion through the creation of a robust public insurance option.  On the other side, there are regressive payment mechanisms, such as taxing health care benefits and additional targeted sales taxes, combined with incremental coverage expansion and a cooperative-like structure for any possible quasi-public insurance.

While the progressive solution of income tax surcharges and coverage expansion with a government-backed public plan is imminently preferable to the mushy mirage sought by Sen. Max Baucus and his moderate Senate Finance Committee cohorts, the progressive plan still leaves much to be desired.

First, as noted by the naysaying Congressional Budget Office, the current progressive plan, much of which has been endorsed by the decidedly mainstream American Medical Association, still largely leaves aside the problem of cost cutting.  Congress has already put a down payment on comparative effectiveness research that addresses part of this problem, but any plan must do more to ensure a bargain for American consumers.

Many conservatives have held up the Congressional Budget Office’s reports, with high cost estimates for reform, as evidence of the complete folly of such massive plans, but the CBO reports are hardly sound perfect policy and shouldn’t be harnessed as evidence to stop all reforms.  Peter Orszag, director of the White House’s Office of Management and Budget and former head of the CBO, has even criticized the CBO budget projections and it is Orszag, and his White House reform plans who are ultimately in tune with what young progressives want.

Secondly, the current progressive plan tries to rush payment in an attempt to frame the public debate on fiscal responsibility in light of the massive deficit our country is running.  Massive deficit spending during a depression is no keen idea, but Washington has boxed itself in by limiting most discussion to payment mechanisms that fall within a 10-year timeframe.  Almost all current cost discussions involve this healthcare reform as having to be paid for within 10 years.  Afraid of the big numbers associated with 20 and 30 year plans, D.C. Democrats are sticking to a 10 year plan and want it to come in under $1 trillion.  Much like the stimulus debate that seemed to revolve around the arbitrary number of $750 billion if for no other reason than it sounded less than a trillion, the health care cost rhetoric is limiting options.  If the plan could be paid for over 20 years, and taxes phased out even longer, the piecemeal approach, that would leave many uninsured at first, would solidify into a robust reform with the long-term well-being of our country in mind.

Third, the current cost estimate, $1.3 trillion, $1.6 trillion, or whatever the number of the day is, pales in comparison to the size of our economy and the cost of continuing down our current path.  This point merits much in depth discussion, but, put simply, the American economy has proven to be utterly resilient over time and can endure a $2 trillion dollar investment in long-term care.  Even though health care costs as a percent of GDP are higher here than almost anywhere else, our GDP and productivity has consistently grown over time and investing in efficiency now will save money on the long run.

Not only will an investment in systemic health care reform save money, but it will be necessary to save our federal budget.  Princeton economist Paul Krugman reflected the consensus of most economists is stating that our current healthcare system is leading us on a “path along which health care premiums will continue to soar, the number of uninsured Americans will skyrocket and Medicare costs will break the federal budget.”

Fourth, and finally, the current progressive plan doesn’t include enough financing options. The plan to finance some of the coverage expansion with a reduction in the percentage you can deduct for a chartable tax write off should be put back on the bargaining table.  Such a plan will likely only marginally effect the amount in charitable giving and will raise sufficient revenue to invest in efficiencies.

As the health care reform effort evolves over the next few weeks, the debate will bounce back and forth over the same policy ground many times, but, unless Congress breaks out of the narrow ground it is arguing over, young Americans may suffer under the same weight imposed by other patched together policy prescriptions and foot a massive bill for inefficient new government spending.  Ultimately, our faith in democracy means that any harm won’t be irreparable, but hasn’t the American body politic, with near 40 million uninsured and wide disparities in the quality of care, suffered enough?  It’s time for bold, progressive healthcare reforms that encompass a broad array of expansion and financing options.


1 Comment so far
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I think your article is largely fair, but the burden will not squarely be placed on young people, I think that is terribly misleading. Unfortunately since that is how you began your article and ended it — most people are going to think that is your main argument. Your logic seems based on gop talking points. Here are the facts … The current bill in the House is deficit neutral over a ten year time span and even will have a $6 billion surplus. Young people, as a result, will not be paying off some debt due to this bill. Also, young Americans are the single fastest growing group of the uninsured, and are the largest group of working Americans who are uninsured. This leads to young people who due to a medical condition are disproportionally being forced into bankruptcy, home foreclosure, and other oppressive debt. These are legitimate personal debts that change live, prevent investment in ones own future, and ruins people at a young age.

Comment by Tony Cani

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