Recipe for a better bill
Harold Meyerson thinks the House's health-care reform bill is not only better policy, but better politics as well.
For families who buy their insurance on the exchanges that both bills establish, for instance, the House bill includes more generous subsidies -- on average, $1,000 more, according to the Congressional Budget Office. The House bill also offers a lot more assistance to Medicare recipients by reducing the cost of their prescriptions. While the bill that emerged from the Senate Finance Committee renews the Bush administration's megabucks gift to the drug companies by continuing to prohibit Medicare from negotiating drug prices with them, the House bill authorizes those negotiations. The Senate bill reduces by half the payments that Medicare recipients must make for prescription drugs that fall into the "doughnut hole" (annual drug expenses are covered up to $2,700, and coverage kicks in again at $6,100, but for all purchases in between, Medicarians are on their own). The House bill would cover all prescription purchases by 2019.
The House bill is not only better public policy than the Senate's, it is also better Democratic politics. Seniors always constitute a disproportionate share of midterm electorates, and Democrats concerned about next year's congressional contests would do themselves a major favor by passing a bill that reduced the costs of seniors' medications. Max Baucus and Rahm Emanuel may have cut a deal with the pharmaceutical industry that limits the cost-cutting the industry will undertake (in return for the greater profits it will gain by having more insured Americans to whom it can sell drugs), but no one in the House ever signed on to it. When the two bills go to conference, the conferees should note that the House version not only bends the nation's cost curve downward but tilts the Democrats' electoral prospects upward.
I prefer the subsidies in the House bill, the public option in the House bill, and the funding mechanism in the Senate bill. The Senate pays for health-care reform by slapping a surtax on high-value plans offered by employers. Economists almost universally believe that such a tax will do quite a bit to control costs and increase wages, both of which are overriding priorities. More on that tax here.
That said, the Senate's excise tax is too small to fund health-care reform, and it's likely to get smaller. So I'd like to see some of the House funding mechanisms blended into the bill to increase the total subsidies. Pair the Senate's excise tax with a cap on itemized deductions, or a surtax on income over $1,500,000, and you'd have more than enough money for generous subsidies. That would make the bill affordable and help it control costs. Good policy, in other words, alongside good politics.
November 4, 2009; 4:35 PM ET
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