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Two NYT Op-Eds on Health Reform: One Air Ball, One Head Fake

The Sunday New York Times turns over two large op-ed spaces to former Senator Bill Bradley and former Bush Council of Economic Advisers Chair, R. Glenn Hubbard. I don’t know why they bothered.

Each author’s goal was to describe yet another "compromise" for health care reform, by describing compromises they made in the past. But instead we get an air ball from Bradley and double head fake from Hubbard.

Bradley spends most of his op-ed reliving the "success" of his bargain with Reagan, in which Democrats agreed to lower marginal tax rates for the wealthiest while Republicans allowed the closure of tax "loopholes." Bradley notes this improved the "effective tax rates," though only for a while, and we never got our side of that bargain back.

The only point seems to be that if Dems get something and Repubs get something, maybe you can make a deal. So what is Bradley’s proposed health reform deal?

The bipartisan trade-off in a viable health care bill is obvious: Combine universal coverage with malpractice tort reform in health care.

Universal coverage can be obtained in many ways — including the so-called public option. Malpractice tort reform can be something as commonsensical as the establishment of medical courts — similar to bankruptcy or admiralty courts — with special judges to make determinations in cases brought by parties claiming injury.

That’s it; that’s Bradley’s entire contribution to the health reform debate. If only somehow we could get universal coverage, and he doesn’t explain how, and if only having a public option solved that, then we could get a deal by have a panel to examine malpractice. Has he been following today’s Republican Party? That’s an air ball, Bill.

Next, R. Glenn Hubbard spends most of his op-ed space explaining why George Bush failed at Social Security "reform" because of poor messaging and not listening to Hubbard. This is revisionist history by the former CEA chair, who hopes to obscure the fact Bush failed not because he misconceived "personal accounts," but because everyone understood he was pursuing conservatives’ favorite goal of dismantling Social Security.

So what does the Hubbard offer for health care reform? First he complains about Obama’s "divisive" message:

Mr. Obama’s rhetoric is also extremely divisive: many Republicans see the public option as the thin end of a wedge to crowd out private health arrangements and are thus fiercely opposed to his reform efforts.

So if Republicans insist on shielding the private insurance industry from effective regulation, any proposal to provide consumers an alternative choice to "keep the insurers honest" is by definition "divisive," whereas insisting on denying choice and shielding the industry are . . . what? Yet accusing Obama of wanting to snuff out granny, deny care to the elderly and all Republicans, while destroying the Constitution — these Republican messages don’t rate a mention.

Then there’s this head fake:

But the president’s universal coverage and public option proposals are directly at odds with his emphasis on cost containment. A public option that reduces costs through public subsidies simply shifts the expense to taxpayers (still us!), while increasing the share of health care the government (again back to us) would pay for with taxes.

Wrong. No one seriously argues that subsidizing health plans offered in the Exchange will "reduce costs." It just helps people afford the premiums, however expensive they are and however rapidly underlying costs are rising. If the public option "reduces costs" it would be because it’s administrative costs for managing claims and payments are lower than those of private insurers.

Hubbard continues:

There is, however, a clear route to compromise. Limiting the tax exclusion for employer-provided insurance would promote cost sharing and reduce the cost of health insurance.

There are legitimate policy reasons for taxing the benefits of at least high-end insurance offered through employment. But what Hubbard really means here is that if people were more directly exposed to the costs of care, they’d voluntarily choose to use the health care system less. Group insurance premiums might be lower, because tax payers would demand less reimbursement. But he then adds:

Regulatory reforms to make lower-cost insurance options available to individual purchasers would also help.

Help what? Whom? All this means is that if insurers covered fewer treatments/illnesses, the premiums would be lower than those for policies that covered more treatments/illnesses. But how does this tautology improve matters?

The problem Hubbard ignores is the economic value of treatment. People getting less treatment when they need it is a loss, not a gain, and that loss offsets the lower premiums from less valuable — junk — insurance. And insurance providers already provide junk insurance today; you only find out it’s junk when you discover the premiums you’ve been paying don’t really cover what you thought they did.

In the end, Hubbard is just arguing that Americans should let the non-competitive market price of insurance ration themselves out of whatever health care they can’t afford to cover. But he has nothing to say about the lack of real competition, the absence of efficient pricing, or the perverse incentives driving an industry he proposes not to challenge to continue raising its prices at 2-3 times the rate of inflation.

Hubbard’s cure comes down to reducing health care coverage and benefits, which is what Hubbard proposed for Social Security too.

dday at Digby’s takes on Bradley and the merits of tort reform

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John has been writing for Firedoglake since 2006 or so, on whatever interests him. He has a law degree, worked as legal counsel and energy policy adviser for a state energy agency for 20 years and then as a consultant on electricity systems and markets. He's now retired, living in Massachusetts.

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