Monday, December 21, 2009

Why Health Reform Did Not Get Bipartisan Support But Medicare And Social Security Did

It has always been about costs. Debt for social programs was not as big an issue in the past. When Social Security passed, US life expectancy was below retirement age. You worked until you died. Workers paying for retirees was a feasible plan. See,

Medicare started as universal health, but became a senior health plan to pass and life expectancy was about 6-7 years less than now and doctor and hospital usage was much lower. The 65 year olds at that time were before baby boomer retirees' bulge and before the retirees of US population growth of the immigration influx of early 1900s and there was the belief the Medicare tax would pay for it.

Finding the money for social programs is much more difficult now. We have expanded the numbers and percentage of the population we include and are much less willing to tax those workers who will benefit as we did with social security and Medicare.

Now we want to tax the rich to pay for an ever-expanding list of needs of the rest of the population.

Every economist recommended eliminating the employer deduction for worker health benefits. The new tax receipts would have funded the entire plan. President Obama took off the table the ability to do the most economically sensible thing to reform health care. Obama also committed to not taxing the middle class, eliminating the ability of Congress to tax those who would benefit, such as taxing workers before they lost their health insurance to unemployment and middle class individuals before they got pre-existing conditions.

Much of the Congressional health care spectacle is because Obama tied the hands of Democrats and prevented them from doing the most sensible things to achieve their goal of universal health care. Obama turned it into class warfare and a conservative versus liberal war through the removal of many of the best options for independent, conservative and republican agreement with the plan.

In doing so, Obama's initial actions resulted in many bad compromises and provisions in the final reform that would not have been there otherwise. Obama will get credit for passing health reform, but he should also take the credit for being the cause of many of the bad provisions in it.
A comment I posted on Ezra Klein's Washington Post blog, "The Senate begins to pass health-care reform".

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