Brit Hume Resurrects Myths About Health Care Reform's Passage

To the surprise and dismay of many liberals, the Senate health-care bill included a compromise with the conservative vision for insurance regulation. The relevant policy is in Section 1333, which allows the formation of interstate compacts. Under this provision, Wyoming, Colorado, Arizona, Utah, and Idaho (for instance) could agree to allow insurers based in any of those states to sell plans in all of them. This prevents a race to the bottom, as Idaho has to be comfortable with Arizona's regulations, and the policies have to have a minimum level of benefits (something that even Rep. Paul Ryan believes), but it's a lot closer to the conservative ideal.

(2) "Allow individuals, small businesses, and trade associations to pool together and acquire health insurance at lower prices, the same way large corporations and labor unions do." This is the very purpose of the exchanges, as defined in Section 1312. Insurers are required to pool the risk of all the small businesses and individuals in the new markets rather than treating them as small, single units. That gives the newly pooled consumers bargaining power akin to that of a massive corporation or labor union, just as conservatives want. It also gives insurers reason to compete aggressively for their business, which is key to the conservative vision. Finally, empowering the exchanges to use prudential purchasing maximizes the power and leverage that consumers will now enjoy.

(3) "Give states the tools to create their own innovative reforms that lower health care costs." Section 1302 of the Senate bill does this directly. The provision is entitled "the Waiver for State Innovation," and it gives states the power to junk the whole of the health-care plan -- that means the individual mandate, the Medicaid expansion, all of it -- if they can do it better and cheaper.

(4) "End junk lawsuits." It's not entirely clear what this means, as most malpractice lawsuits actually aren't junk lawsuits. The evidence on this is pretty clear: The malpractice problem is on operating tables, not in court rooms. Which isn't to deny that our current system is broken for patients and doctors alike. The Senate bill proposes to deal with this in Section 6801, which encourages states to develop new malpractice systems and suggests that Congress fund the most promising experiments. This compromise makes a lot of sense given the GOP's already-expressed preference for letting states "create their own innovative reforms that lower health care costs," but since what the Republicans actually want is a national system capping damages, I can see how this compromise wouldn't be to their liking.

(5) To stop there, however, does the conservative vision a disservice. The solutions the GOP has on its Web site are not solutions at all, because Republicans don't want to be in the position of offering an alternative bill. But when Republicans are feeling bolder -- as they were in Bush's 2007 State of the Union, or John McCain's plan -- they generally take aim at one of the worst distortions in the health-care market: The tax break for employer-sponsored insurance. Bush capped it. McCain repealed it altogether. Democrats usually reject, and attack, both approaches.

Not this year, though. Senate Democrats initially attempted to cap the exclusion, which is what Bush proposed in 2007. There was no Republican support for the move, and Democrats backed off from the proposal. They quickly replaced it, however, with the excise tax, which does virtually the same thing. The excise tax only applies to employer-sponsored insurance above a certain price point, and it essentially erases the preferential tax treatment for every dollar above its threshold.

(6) And finally, we shouldn't forget the compromises that have been the most painful for Democrats, and the most substantive. This is a private-market plan. Not only is single-payer off the table, but at this point, so too is the public option. The thing that liberals want most in the world has been compromised away. [Voices.WashingtonPost.com, 2/8/10]