Thursday, January 7, 2010

The one aspect where the Senate Bill is (gulp) better than the House bill??

There are two things to remember about Health Care Reform. One, is that's it's like a old Pipe Organ. Push a button here...sound comes out there. Getting from A to B ain't no easy trick. The inner workings to make that happen are real complicated. Changing one thing you may not like may wind up killing four or five things you do. Two, it's also very, very counter-intuitive at times.

Thus, I present a new piece from Erza on the Excise Tax and its critics. The more I read about this stuff, the more I come to believe (and not in a nose-holding way) that the Financing aspect of the Senate bill is infinitely superior to the House bill, though the House bill is superior in the Health Care and Insurance Reform aspects.

And, it goes without saying that any bill with a Public Option would have been superior to that...

...and something with a Single Payer superior to a Public Opt--...okay, I'm stopping.

A couple of highlights:

Before you really get into whether the excise tax is a good thing, though, you have to be clear about what it is. It's generally compared with the House's surtax on the rich. But all taxes are not alike. The House's surtax is a tax that's meant to raise revenue, much like an income tax. The excise tax is a tax that's meant to change behavior, much like a cigarette tax.

To make that even clearer, the House's surtax will only be successful if people pay it. The excise tax will only be successful if people don't pay it. And if that happens -- and many economists, and the Joint Committee on Taxation (which is the CBO for taxes), believe it will -- it will give plans that hold costs down a competitive advantage over plans that don't, and it will send a signal to insurers that they're vulnerable if they don't crack down on spending.


For all that, no one should be under the illusion that this tax will not cause some pain, or upset some voters, or assail the plans of some middle-class workers. It will. But it's worth saying this very clearly: You cannot design a cost control that won't. The health-care cost problem is not a problem of the rich and famous. It is not a problem that can be painlessly solved by limiting insurance company profits (much, much too small) or reducing payments to providers (which would mean long waits and less access). Everything has tradeoffs. Everything has losers.

But click and read it. It's eye-opening stuff.