As part of their Health Care Watch series, The New York Times Campaign Stops blog invited Heritage vice president for domestic policy Stuart Butler to analyze the presidential candidates health care plans. Butler writes:
Barack Obama’s approach might be called “expand and economize.” Essentially he would add commitments and centralize, and then try to offset costs with new revenue and efficiency improvements. He would widen coverage by launching new programs and expansions of existing ones, plus requirements on many businesses to increase worker coverage or pay a tax. He seeks to pay for most of this in two ways, both of which are problematic, technically as well as politically. And he envisions detailed national requirements and arrangements for benefits and insurance.
Mr. Obama says that part of this can be paid for by “rolling back” some of the Bush tax cuts. But the Congressional Budget Office will remind him that those cuts sunset in 2010, leaving him with a financing problem that might require him to abandon his proposed middle-class tax cuts. The other source of financing is the hope that improved technology and greater efficiency will yield far more savings than can realistically be expected.
John McCain’s approach to the problem might be called “redeploy and devolve.”Rather than add major new spending on top of existing spending and tax subsidies, he would cap the tax break for employer-sponsored coverage and use that tax revenue to finance a subsidy for less affluent people to pay for coverage. Sounds like the kind of tax increase that reasonable progressives like Ezekiel Emanuel should support. Interestingly, Mr. Obama’s economic adviser Jason Furman wrote a more radical version of such as tax subsidy redeployment earlier this year. (You can link to a preliminary draft here.) So whoever wins, this piece of the McCain proposal might get an honest airing and bipartisan support.
Mr. McCain also takes the view that it is unwise and a tough political challenge to try to structure a national system mainly at the federal level. I agree with him that it would be more practical to set outcome goals for coverage at the federal level and then press states to put forward ways they could achieve those goals, giving them some flexibility to propose creative approaches. By allowing for a degree of diversity toward a common purpose, this approach would be more likely to garner bipartisan and state support than a proposal for a more standardized national system.