Edwards on Health Care

Marie Cocco and Paul Krugman have columns out today panning and praising, respectively, John Edwards’s national health care proposal. As much as I respect Professor Krugman, at first glance I have to side with Cocco on this one. The Edwards plan is a lot better than what we’ve got now, but I don’t think it’s where we want to go.

As explained on Edwards’s campaign web site, the proposal would achieve universal coverage by:

  • Requiring businesses and other employers to either cover their employees or help finance their health insurance.
  • Making insurance affordable by creating new tax credits, expanding Medicaid and SCHIP, reforming insurance laws, and taking innovative steps to contain health care costs.
  • Creating regional “Health Markets” to let every American share the bargaining power to purchase an affordable, high-quality health plan, increase choices among insurance plans, and cut costs for businesses offering insurance.
  • Once these steps have been taken, requiring all American residents to get insurance.
  • You can read a PDF document explaining the plan in more detail here.

    This sounds a whole lot like a plan being floated by Arnold Schwarzenegger in California, as Krugman acknowledges. I wrote about the California plan here, and quoted Krugman about why the Schwarzenegger plan was bad. So why is the Edwards plan good? Krugman explains,

    People who don’t get insurance from their employers wouldn’t have to deal individually with insurance companies: they’d purchase insurance through “Health Markets”: government-run bodies negotiating with insurance companies on the public’s behalf. People would, in effect, be buying insurance from the government, with only the business of paying medical bills — not the function of granting insurance in the first place — outsourced to private insurers.

    Why is this such a good idea? As the Edwards press release points out, marketing and underwriting — the process of screening out high-risk clients — are responsible for two-thirds of insurance companies’ overhead. With insurers selling to government-run Health Markets, not directly to individuals, most of these expenses should go away, making insurance considerably cheaper.

    Better still, “Health Markets,” the press release says, “will offer a choice between private insurers and a public insurance plan modeled after Medicare.” This would offer a crucial degree of competition. The public insurance plan would almost certainly be cheaper than anything the private sector offers right now — after all, Medicare has very low overhead. Private insurers would either have to match the public plan’s low premiums, or lose the competition.

    Again, this is way better than what we’ve got now. But Marie Cocco says,

    John Edwards is trying to get ahead of the political curve, but he would send us back to the future. To 1993, to be exact.

    Edwards would repeat the mistake that was at the heart of Hillary Rodham Clinton’s misadventure in trying to fix a health insurance system that was then, and is now, so out of whack that it manages to cover fewer and fewer Americans at higher and higher cost.

    Like Clinton did, Edwards seems to believe that you can get the private insurance industry to do something it refuses to do because, in essence, doing what Edwards wants would put the industry out of business.

    He wants insurers to cover everyone, no matter how sick and expensive they are. He wants employers to continue to carry on their ledgers a cost that is ever more burdensome to them and to their workers, onto whose shoulders more of the health-insurance tab is being shifted.

    The 2004 Democratic vice presidential nominee and 2008 presidential hopeful knows that no matter how many times our health insurance crazy quilt is ripped up and stitched back together, it still will fail to cover millions of Americans.

    So Edwards wants them to be able to buy a new public insurance plan that would be like Medicare, but not exactly. And he wants affluent people to pay more taxes to support coverage of the less fortunate, but not directly.

    I think that we need to get private insurers out of the picture except, maybe, for people who want to purchase supplemental policies like many folks on Medicare do. In practice, pure single-payer systems don’t seem to deliver as well as a system that covers everyone publicly but permits private insurance and providers to stay in business also.

    Since Edwards’s big draw is that he’s strong on domestic policy, to be a candidate I would support he’s going to have to be amazing on domestic policy. I think the health care proposal falls short of amazing.