Ramesh Ponnuru and Yuval Levin are given space in the New York Times to argue for a conservative alternative to ObamaCare. Part of their plan is to surreptitiously do-away with the employer-based health care system. It’s a worthy goal in itself, but it’s interesting how these two chaps go about lobbying for it. In discussing John McCain’s 2008 plan, they recognize the biggest obstacle for changing from an employer-based system.
The chief problem was the same one that frustrates ambitious health reformers on the left: Most people like their insurance and do not want Washington to change it.
So, how do they get around this?
…as more Americans bought their own insurance, consumer pressure would bring down costs for everyone. Ultimately, companies could get out of the business of managing their employees’ health insurance altogether.
What they want to do is give everyone a voucher to buy insurance. But, since they don’t want people to panic, they won’t give the voucher to people who are eligible for employer-based insurance. Or, more precisely, they will only give those people enough money to offset the cost of their employer-based coverage. In this way, employers will no longer have any incentive to offer coverage and will drop their insurance plans. Eventually, everybody will be thrown into the “individual market.”
This alternative sacrifices some advantages of the McCain plan. It would not do as much to shift control over insurance to workers. They would have to stay in their jobs to keep their existing plans. But it would cut costs and help people the tax code now pushes out of insurance markets. And it would do so, critically, without threatening the insurance arrangements of the satisfied majority. Over time, this reform could help the individual market grow and become more attractive to more Americans. Voters might then become receptive to relaxed restrictions on using the tax credit to exit the employer market.
It’s right there to see if you compare the two blockquotes above. First they say that companies could get out of the business of providing health insurance to their employees and then they say that their plan would not threaten the insurance arrangements of the “satisfied majority.” Those two things are completely incompatible and logically contradictory. What they should say is that their plan will allow politicians to trick people into thinking that they’ll be able to keep the employer-provided health care they currently have, when, in fact, the plan aims to take that coverage away and replace it with a voucher.
This is not the only problem with their plan. It costs more to get insured as an individual than it does to get insured as part of a group. But they seem to think that consumers will apply pressure to bring down costs if they get thrown out of group plans and face unaffordable costs. This ignores the actuarial logic involved in setting rates. In other words, this is another unserious, ideologically-driven bit of drivel.
