Health Care: Who, If Anyone, Pays?

The still-being-shaped  health care bill is now  presented as the best of both worlds–compassionately covering 31 million more people, which is good and right, and also somehow reducing these ruinous  deficits (see Scott Burns’ The Coming Generational Storm), which is possible, except that Part 2 may violate one of those laws of human nature which needs a name. It’s something like Beware of Reforms Premised on  the Expectation that  People Will  be Better Than They’ve Ever Been Before.

I refer, of course, to how much of the deficit reduction depends on the steely nerve and guts  of future Congresses, including many members not even in office right now, who five and six and eight years down the road will be tasked with turning to the voters and saying,

“Uh, okay, folks, remember all those great changes we made in health care a few years back? Yeah? Wasn’t that great? Yeah! Well, uh, it’s time to (whisper) pay for them now.”

One big worry, as Atlantic columnist Megan McArdle notes below, is the tax on those so-called “Cadillac” health plans, many of them clutched tightly by well-connected union members who will raise holy hell when the time comes to pay the piper. Quoth she:

The proposed changes increase spending dramatically, most heavily concentrated in the out-years. The gross cost of the bill has risen from $875 billion to $940 billion over ten years–but almost $40 billion of that comes in 2019. The net cost has increased even more dramatically, from $624 billion to $794 billion. That’s because the excise tax has been so badly weakened. This is of dual concern: it’s a financing risk, but it also means that the one provision which had a genuine shot at “bending the cost curve” in the broader health care market has at this point, basically been gutted. Moreover, it’s hard not to believe that the reason it has been moved to 2018 is that no one really thinks it’s ever going to take effect. It’s one thing to have a period of adjustment. But a tax that takes effect in eight years is a tax so unpopular that it has little realistic chance of being allowed to stand.

I think the bill passes the House tomorrow by, uh……….4 votes. I’m  glad we’re changing the system to cover more people, and I hope we put an end to those horror stories about people being denied coverage due to pre-existing conditions and fine-print sleight-of-hand. But I’ve been a deficit worrier since the days of Ross Perot, and the Burns book cited above is downright terrifying on the subject.

So here’s hoping that future Congresses will be Better Than They’ve Ever Been Before.

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