Why Health Care Reform Is Wobbling

By Derek Thompson

The "three-legged stool" of health care reform is wobbling.

To understand why the stool is wobbling, let's go over the three legs. As David Leonhardt elegantly described, health care reform extends health care to tens of millions of Americans by (1) requiring everybody to but health care, to spread costs among sick and healthy; (2) prohibiting insurers from "cherry-picking" health customers or taking away coverage from the sick; and (3) handing money to people who can't afford insurance alone.

Each of the three legs needs the others for the stool to stand. If we force insurers to accept all comers without requiring everybody to buy health care, people will wait until they get sick to buy insurance, which will drive up the cost of care for everybody else. If we require everybody to buy health care without subsidies, we'll saddle low-income families with brutally high costs.

Today, all three legs are teetering. Fist, Republicans and even some Democrats are balking at the "universal mandate" to buy health insurance. Second, the Obama administration is offering waivers to insurance companies to let them keep old policies that reform was supposed to end, like capping annual benefits. Third, Republicans are looking to block funding to set up the exchanges and subsidies system.

But the real concern for health care reform advocates is what happens between now and 2014, when most of the law is scheduled to go into effect. Health care reform is the only major piece of social legislation passed entirely on a straight-line party vote (see graph below, or click here). Most of our social net was built with the parties holding hands. The Affordable Care Act of 2010 was passed with one party sitting on its hands. Universal Republican opposition to the bill increases the chances that in three years, health care reform will be either completely dead or mostly dead: a zombie program that walks among us but consists of inadequate funding and staffing and breeds resentment.

vote social safety net laws.pngOn the campaign trail, some Republicans are promising to keep the insurance regulations but kill the universal mandate. As others have pointed out, this amounts to forcing insurance companies to spend much more money in exchange for nothing. That's a bad deal for the insurance companies. And yet, they are donating to Republicans far more than Democrats. Why? Because they understand the end game. They understand that a three-legged stool on two legs falls down. The teeter and fall of health care reform is what they want. It's what Republicans want, too. And with a Republican in the White House, it's almost certainly what we'd get.

This article available online at:

http://www.theatlantic.com/business/archive/2010/10/why-health-care-reform-is-wobbling/64210/