Socialized Medicine Showdown
It's time for some GOP spine on health care.
BY KIMBERLEY A. STRASSEL
Friday, June 29, 2007 12:01 a.m. EDT
While most of Congress scrapped over immigration this week, a small band of Republicans doggedly toiled behind the scenes on quite a different subject. National Economic Council Director Al Hubbard and health secretary Mike Leavitt shuttled to and from the Hill; Senators hashed out the topic at a steering committee lunch; congressmen canvassed members, wrote and wrote legislation. Even President Bush gave a speech on the subject, exhorting his party to get it together.
The result--if Republicans know what's good for them--may be a broad new GOP health-care vision, a free-market reform to replace today's faltering employer-based system. The party has circled this for years, throwing out free-market ideas here and there, yet never proved unified (or brave) enough to get behind one bold, top-to-bottom reform. Democrats are now forcing their hand.
The setting is the upcoming debate over the State Children's Health Insurance Program, or Schip, a brawl that could well determine the future direction of U.S. health care. Democrats see expanding Schip as the first step toward socialized medicine. If Republicans fail to meet that challenge with their own more compelling plan for market-based, consumer-driven reform, it may prove the beginning of the end of today's private model.
If that sounds dramatic, consider the Democrats' strategy. The left still bears the wounds of HillaryCare, and knows that even with spiraling health-care costs, the nation still has little appetite for an abrupt shift to all-government care. So they've developed a craftier approach, one that takes longer but gets them to the same end.
The new plot is to enact national health care one citizen at a time, slowly expanding the reach of existing government programs until they encompass the population.
Schip is the first step. The program, with its $25 billion budget, was originally designed to provide insurance to only the poorest children. Democrats want to throw an additional $60 billion at it, expanding Schip's rolls by three million. They would expand eligibility so much that as many as half joining would drop private insurance to do so. Even adults could sign up.
Next: Even as Democrats work to expand Schip to cover older Americans, they'd expand Medicare to cover younger Americans. House Energy and Commerce Committee Chairman John Dingell is said to have recently floated the idea of allowing the struggling Big Three auto makers to enroll workers in Medicare at the age of 55, or 10 years early. Consider this a pilot program for dropping Medicare's age limit overall and instantly subjecting tens of millions more Baby Boomers to the government's tender care.
Democrats will meanwhile argue the only way to pay for Schip and other expanded programs is to gut Medicare Advantage and similar free-market reforms. See how clever? Swallow up ever more Americans into federal programs, banish any last vestiges of popular market plans, and voilà! It is Hillarycare! Only nobody ever had to use the dreaded word!
Republicans beat back the original HillaryCare by warning about Canadian waiting lines, but a negative message alone won't do this time. Our third-party-payer system, while still stacks better than France, is nonetheless collapsing--and Americans know it. Republicans can't simply be against socialized care, while not being for anything else. The left also chose its first battle wisely, with a program for "the children." The GOP's only Schip response so far has been to grouse about cost. And it's realizing a message of "We're for the children, just not as much as them," isn't a political winner.
This week's backroom talks--led by health-care innovators Tom Coburn and Jim DeMint in the Senate, and Paul Ryan and Jim McCrery in the House--were therefore about getting beyond Schip. The goal: a system that eliminates today's corporate subsidy and gives the money to individuals, cutting costs and reducing the number of uninsured. The political message: Dems want to put a few million more under government control for $60 billion, Republicans want to put 300 million in charge of their own care at zero extra cost.
The good news is that after 10 years of tinkering, Republicans have laid the foundation for bigger reform, from Health Savings Accounts to tort liability reform. The more intense policy debate this week instead focused on the biggie: how to revamp the tax code to get that money to individuals. On one side are tax wonks, among them Sen. Jon Kyl, who prefer giving every American a tax deduction--as President Bush has advocated. They argue it does the least damage to the tax code, and is less of a handout. On the other side are health-care wonks, among them Sen. Coburn, who prefer a refundable tax credit. They argue it does more to help with the uninsured, and is coincidentally a better political sell.
By the end of this week, the architects were coalescing around a tax-credit approach, on the belief it will attract the most GOP support. In a signal of White House approval, President Bush deliberately noted in his speech Wednesday that a tax credit would have a "similar outcome" to his deduction plan, and that he was "open to further discussion." Word was that Republican leaders were also climbing on board, with all concerned hoping to debut something big in coming weeks.
The challenge then will be to get the rest of the party to overcome its nervelessness on health care. The ringleaders of today's effort admit they may have to do a Sen. Phil Gramm, who in 1993 led by example, singlehandedly tearing into HillaryCare, proving his position a winner with voters, and pulling his colleagues in line.
They'll need to roll up their sleeves. Most Republicans don't understand health care, so don't want to talk about it; many grimace at voting down money for "kids"; quite a few face tough elections and would rather not jump into an unknown debate. Reformers also aren't getting cover from should-be allies. Insurers and lobby groups like PHRMA--who ought to understand that a bigger Schip is a threat to their long-term business--are instead focused on short-term profits and PR images. Republican governors--who'd be huge beneficiaries of an individualized market--seem to only care about keeping federal dollars flowing into state coffers.
Democrats will hail a Schip victory as an example of how they can help Americans on their top concern of health care. They want to ride it to the White House and to bigger congressional majorities, making it that much easier to institute incremental national health care. If Republicans don't unify now, they might not get a better chance.
Ms. Strassel is a member of The Wall Street Journal's editorial board, based in Washington. Her column appears Fridays.
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