Democrat's Health Care Conundrum

Health care “reform” is becoming a quite the conundrum for the Democrats as they struggle to get it passed in Congress. The bottom line is that there is no way to “solve” this problem that doesn’t harm one or more politically powerful segments of the public. For the moment the Obama administration and its allies in Congress have chosen the elderly as the principal loser. This is a very risky choice as the elderly are notoriously defensive about their benefits and vote disproportionately to the rest of the population.

As I have mentioned in my prior post, the Medicare/Medicaid programs are receiving massive de facto subsidies from the private health programs via the price controls contained in the government programs. The idea that we can reduce Medicare costs by 400 to 500 billion dollars by eliminating waste and fraud doesn’t receive much support even from the pro-administration talking heads and none from anyone else. With increasing numbers of doctors refusing to take Medicare patients, additional pressure truly will undermine the program. And, don’t forget this was already a crisis given the pending wave of baby boomers that are now entering the program.

On the other side of the issue, we have the uninsured that basically breakdown into various subgroups each with distinct problems. The most aggrieved are those with pre-existing conditions who can’t get or can’t afford coverage. Then we have those in jobs, usually low paying, that don’t offer health plans. These two groups clearly merit some help. One can pass regulations that prohibit insurers from dropping clients who have developed a serious health condition while covered and develop a system to attack pre-existing condition lockout. However, these reforms will increase the cost of insurance even more on the private insurance sector. Now we have aggravated the mainstream working middle class and their employers. The solution for the working poor most clearly will require massive government support which means taxes.

Then we have the largest group of uninsured those who are temporarily out of work. In a major recession this group is certain to grow. In one sense we have mostly solved this issue with the COBRA bill of the 1970s but the kicker is that in most cases buying your former employers health plan is too expensive for the unemployed. One could create an unemployment health insurance plan that would pay these costs but who would pay for it? The worker with yet an additional payroll tax, the employer, or some split between them?

Two additional groups to consider are those who don’t have employer insurance and can afford to by private coverage but don’t buy it for some reason. Most likely because they don’t believe they will get sick and they would rather spend the money on other things. And, then we have the illegal aliens who crowd the emergency rooms in some states. Bringing the former group into the system would clearly be helpful to reducing costs (probably the only uninsured group for which that was true) but given their choices, mandating coverage would hardly incline them to vote for those making that decision. The public will generally oppose insuring the illegals under a government program and they can’t vote. So providing for them is just a loser politically.

So even with the best of motivations finding an acceptable solution is problematic. But, given our Congress that is driven by diverse special interests, writing five forms of the bill to be hammered out in secret and voted on before it can be understood, one can hardly expect the best motivations. It remains to be seen if the Democrats can patch together a bill that will until all of them in order get it passed in the Senate. It also is unclear whether a success in the fact of public opposition would ultimately rebound to their benefit.