HEALTH CARE/Joan Retsinas

Newest in Health Insurance Litter

Once again candidates are spawning a litter of proposals to give more Americans health insurance. This is not so much a rite of spring as a rite of campaigns. Politicians intent on wooing "the people" offer assorted solutions. But since no plan will cover everybody, cost nothing and offend nobody, the plans die.

This year's litter has some perennials.

There is the tax code solution, a favorite of insurers. By fiddling with deductions, the administration promises to extend insurance. But, while fiddling with tax deductions -- the administration has experience along these lines -- may enrich some people who already have insurance, this plan won't inspire 44 million people to buy insurance.

There is the expand-Medicaid plan. Via means-tested programs, states already insure children whose parents are either poor enough for Medicaid, or just above Medicaid eligibility, yet who can't afford their workplace insurance. States are willing to expand eligibility -- if, and only if, the federal government opens its spigots. Otherwise, states must raise taxes -- a death knell for governors seeking reelection.

Consumer-mandates, coupled with "affordable" premiums, are popular. State legislatures are testing these mandates. Will constituents earning $40,000 a year happily spend $2,000 a year for insurance, or risk tax penalties? The lower the premium, the more people who will comply willingly, even enthusiastically. But the lower premiums entail higher subsidies. Insurers support these mandates, which translate into more enrollees, but insurers will want subsidies to compensate for low premiums. If the federal government doesn't open its coffers, states will need to raise taxes -- more of the electoral death knell.

Employer-mandates that would force employers to pay for insurance are popping up again. In a nation that doesn't force employers to offer any insurance, much less "affordable" insurance, these plans have never survived the opposition of employers who argue that they can't afford it. (Small employers face especially steep premiums, because the size of their pool is small.)

Then there is the runt of the policy-litter: single-payer national health insurance, along the lines of Medicare. A single-payer plan would do the job. Every developed nation has some variant of the basics: a tax-supported base, universal coverage, none of the pre-existing-condition exclusions that bedevil private insurance. Administrative costs for the single-insurer are low. Each year the insurance industry kills this runt.

Changing the status quo -- even a change that will extend insurance to millions of Americans -- will hurt some interest group. Insurers, employers, states, physicians, middlemen -- all see the plans through the lens of self-interest. The only interest group without a lobby is the uninsured (44 million strong) and the underinsured (millions more) -- in short, the amorphous "people" candidates woo.

This year a new hybrid joins the litter. The Economic Policy Institute's Agenda for Shared Prosperity is proposing Health Care for America, called the Hacker plan (after Jacob Hacker from Yale, one of the architects). Employers could still insure their workers. So the health insurance industry could shelve the "Harry and Louise" advertisements that felled Clinton's plan. Under the Hacker Plan those employers who didn't provide coverage would contribute to cover their workforce in a new national pool (analogous to the Medicare pool). People not tied to the workplace would join this pool; the government would provide generous subsidies. The plan would ease employers out of their responsibility for insurance: many employers want relief. It would also ease states out of their responsibility for insurance. States, too, are eager.

Opponents are launching their salvos:

The plan isn't radical enough. It preserves the employer-based system.

The plan is too radical. It expands the government-base of insurance by opening a Medicare-type pool to the population.

The plan will discourage competition, by instituting a mega-national-pool. But that mega-pool should keep costs low.

The plan will raise taxes. But the plan, if successful, will lower private insurance premiums.

The plan won't work. The plan will work and we won't like it.

In the cacophony of dissent, the much-vaunted "people" should speak out. Isn't this pragmatic plan better than the status quo?


Joan Retsinas is a sociologist in Providence, R.I. Email