Rep. Louise Slaughter on Healthcare Reform

And from The Daily Beast:

The core idea of a health-insurance exchange is that in the long run, rather than being stuck with whatever health plan your HR department wants to give you, you should get to shop for a plan you like. That way, if your plan treats you badly, you can switch to another one, bringing some market discipline to the quality of service provided by insurance companies…

But for the exchanges to work, they need to be regulated. Absent regulation, insurers make money by refusing to insure people who are likely to need medical care. That’s basic business sense, but it doesn’t work as the basis of a health-care system. So plans that want to be offered on the exchange will need to agree to charge premiums based broadly on age, rather than on detailed discrimination. But for that to work, you need to mandate universal participation. Otherwise, you can just go uninsured until the day before your big surgery, and then sign up for a plan. But to mandate the purchase of insurance, you need to offer subsidies for people who can’t afford it. And to offer higher subsidies, you need to raise taxes.

And here’s where bipartisan agreement breaks down…When George W. Bush was president, Republicans decided it was fine to increase spending and cut taxes simultaneously and it was therefore possible to achieve a great deal of bipartisanship on increasing education spending (No Child Left Behind) and boosting foreign-aid spending, and a modicum of bipartisanship on adding a prescription-drug benefit to Medicare and a pair of tax cuts mostly for wealthy Americans. But once Obama took over, the GOP decided that deficit spending was bad and centrist Democrats agreed. Consequently, to do anything, you need to raise taxes; Republicans won’t raise taxes, so nothing can be bipartisan.

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