Unfortunately for Republicans, their reforms are easy to caricature as radical and risky -- just as the Obama campaign did against John McCain in the 2008 election. Joe Biden pounded the taxation of employer-based health benefits as "the largest increase on middle-class taxpayers in American history" -- ignoring that the money would be returned to taxpayers in the form of individual subsidies to buy insurance. The attack was dishonest -- and effective.
But Republicans suddenly have an advantage in this argument. Senate Finance Committee Chairman Max Baucus -- a supporter of partially funding health reform by limiting the tax breaks for employer-based coverage -- raised the issue with Obama this week at the White House. After the meeting, Baucus reported that Obama is open: "It's on the table. It's an option." This would be a large and cynical about-face by Obama. It would also bolster a key element of the Republican health reform agenda.
The other large issue in health reform is controlling costs. On this issue, Republicans also have a tough political sell. They generally try to cut costs by encouraging "competition" -- which really means that medical consumers should bear more of their own health expenses, creating an incentive to look around for better prices. It is hardly a snappy campaign slogan: "Pay more out of pocket and shop around for medical bargains."
But here again the Obama administration has made the Republican task easier. Obama's grand cost control announcement -- joined by health industry leaders -- of a 1.5 percentage point reduction in health inflation each year was a shoddy, half-baked, deceptive mess. The (unsubstantiated) saving was really 1.5 percent after 10 years, leaving administration officials to backpedal and supposed allies to fume.
The administration, it turns out, has no serious plan to control health costs. Government health programs of the type Obama seeks to create are not good at cost control (as Medicare has proved) -- unless they aggressively ration expensive care to the seriously ill and elderly (as more muscular European models have done). In the choice between competition and rationing, the Republican argument for competition looks less hopeless.
The political fight on health care remains lopsided in Obama's favor, but the policy argument is growing more balanced. On the Republican side, Americans will see scary changes and more individual costs; on the Democratic side, government control and possible rationing, at a price we can't afford. As the debate becomes more complex, the outcome becomes less certain.
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