August 2, 2009 6:48 pm

The Republican healthcare paradox

Bromley illustration

Support for the administration of US president Barack Obama is fading, and the struggle over healthcare is a main reason. The Democratic party’s ambitions for health reform were only recently an electoral asset. No longer. A slim majority of voters – but a majority nonetheless – now says the plans emerging in Congress are unlikely to make them better off. Congressional action on the issue, once promised by the summer recess, has been delayed until the autumn, and some observers expect the whole endeavour to come to nothing.

One striking aspect of the story is the role played by the Republican party – namely, no role at all.

In Congress, effective opposition to the administration has come from moderate and conservative Democrats, members of the so-called Blue Dog coalition. The independent Congressional Budget Office has also harmed the legislation’s prospects by undermining the administration’s claims about costs. The Democratic plans, says the CBO in its tiresomely honest way, would “bend the curve” in the wrong direction. That verdict has sunk in with the public.

But what do the Republicans think about this pivotal issue? Hard to say. How peculiar that is. The Democrats’ disarray on health reform was an opportunity for the party to recover from its drubbing in the 2008 elections. Political strategy aside, it was also in the public interest that the Republicans should do their job as a functioning opposition – by offering an intelligent critique of what the Democrats were proposing and a workable policy of their own.

With Democrats all over the place on the issue, the Republicans either needed to argue that the system was not broken and did not need fixing, or else come up with a plan of their own. They have so far done neither.

The party mostly accepts reform is needed – a telling acknowledgment of the public mood and grounds for optimism that in the end something will be done. Most Republicans agree with the administration that the US is spending too much on healthcare and getting too little in return, and that measures to guarantee access to affordable insurance are needed.

But the party as a whole has no notion of what its policy should be. Some Republicans do have ideas for mending the system. Various groups have put together reform proposals and some of these plans, just as on the Democratic side, include sensible innovations. But the party is failing to devise a single clear message.

At present workers are not taxed on the value of employer-provided health insurance. Some advocate curbing or eliminating this deduction and using the proceeds to provide generous subsidies for the uninsured. This is an idea favoured by many Blue Dog Democrats and more or less every healthcare academic you care to ask. Other Republicans are wary of this. Most favour much more modest subsidies.

All excoriate medical-malpractice lawyers and suggest ways of curbing their activities. To varying degrees, all complain about the prospect of “government-run healthcare” and question the need for further regulation. Most Republicans are against mandating that either companies or individuals must buy insurance, and keen to promise that people content with their present arrangements will see no change.

These elements cannot yield a coherent plan. Many of them are problematic in their own right. Above all, hostility to government intervention carries little conviction once you acknowledge, as the Republicans do, that control of costs is paramount. One way or another, public policy will have to play a big role if costs are to be reined in.

For any remotely feasible scheme, a central agent for cost control will be Medicare. This is awkward for the Republicans’ anti-government position in several ways. Medicare – the taxpayer-supported programme that provides health insurance for the elderly – is enormous, expensive and popular. Because of Medicare and Medicaid, which provides insurance for the poor, the US healthcare system is already, in large part, government run. Spending per head on the public parts of the US healthcare system is higher than spending per head of Britain’s National Health Service.

The government, through Medicare’s direct and indirect influence on the system, already plays a central role. The Republicans cannot run on a promise to dismantle Medicare any more than the opposition Conservative party could run on a promise to close the NHS. So it has to say that: (a) Medicare is safe in its hands; and (b) government-run healthcare is the problem. Explain that to voters.

Reflexive animosity towards medical-malpractice litigators and government intervention are distinctively Republican traits, but the party’s other big idea is a mistake it makes in common with the Democrats. Republicans insist both that the system needs thorough reform and that nothing must change for most Americans.

Taxing employer-provided insurance, as some Republicans want, would start a transformation in US healthcare. It would push people out of insurance tied to their jobs. This is a fine idea. But how can you advocate this and promise that people who are happy with their present (mainly employer-provided) coverage will see nothing change?

The truth is, Democrats and Republicans alike have been working on the assumption that voters are idiots. Opinion polls are teaching the administration that this is not so. Republicans are doubtless enjoying the Democrats’ discomfiture, but it is a hollow success. Their contribution to this debate has so far been worthless, and the country knows it.

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