The GOP Health Insurance Proposal

In many ways, it's helpful and clarifying. The biggest news, it seems to me, is that the CBO judges medical malpractice reform to be capable of saving $41 billion over ten years - not exactly a fiscal life-saver but a measurable idea to control costs a little better. I see no reason why it should not be in the final bill. The bill also claims to prevent insurance company discrimination against pre-existing conditions, and sets up high-risk insurance pools. The result would be around a 3 percent reduction in premiums for most people in big company plans. It will cut close to $70 billion off the deficit in the next ten years. 

Does it actually tackle the question of covering the 40 million or so people without access to insurance? No, it does not. It could insure an extra 3 million tops. Vast numbers of people would be shut out of access to insurance because they just cannot afford it. The GOP's response to this is: we cannot afford to help right now. Which is honest enough. But it doesn't exactly counter the fact that, according to the same CBO, the Democrats bill would save $104 billion off the deficit in the same time period. So, if affordability is what's at stake, why not back the Dems?

The honest answer to that would be: those CBO numbers won't reflect the final cost and the risks of such an ambitious scheme are too great for this moment of fiscal crisis. 

And that's why this counter-proposal is helpful. It frames the core question here sharply: do we want to risk more fiscal imbalance by dramatically increasing the number of people with access to health insurance? Given everything else the federal government spends money on, my answer is: yes. With the proviso that real attempts to cut spending elsewhere - by raising Medicare premiums for the wealthier, by gutting corporate welfare, by deleveraging two unending wars - it's a good thing to do.

But that means that the flipside to this new endeavor must be a serious and persistent attempt to tackle the fiscal crisis after health insurance passes. If Obama wants to reassure independents that he is not another borrow-and-spend president, he will have to pivot off health insurance to steep entitlement and defense budget reform.