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Forbes.com

 

Why Democrats Are Winning The Health Care Debate

September 23, 2009

By David Gratzer

American medicine is socializing itself.

September has been a tough month for Democrats. In an attempt to shore up public support for his health-reform proposals, President Obama addressed a joint session of Congress; his ideas became less popular. After extensive negotiations with Republicans, Senate Finance Chairman Max Baucus, D-Mont., released his bipartisan health-reform plan last week, sans the bipartisan support.

Democrats seem unable to move forward. On Sunday, the president did five news shows but had no new compelling arguments. Sen. Baucus, meanwhile, is trying to build support for his compromise bill, but he doesn’t have the votes to get it out of his own committee and is already revising it.

But here’s the irony: The Democrats are winning this debate.

No, their biggest proposals aren’t likely to pass Congress any time soon. But in the debate over the size and scope of government in health care, they’re winning the war: American health care is socializing itself.

Consider the latest data from the Census Bureau on income, poverty and access to health care. Reporting focused on the percentage of Americans without health insurance. In 2008, 15.4% were without coverage, statistically unchanged from the year before.

A more careful look reveals a different picture. In 2008, enrollment in government health care programs grew to 87.4 million Americans--about 29% of the total. At the same time, employer-based health insurance weakened; those gaining coverage from the workplace fell from 59.3% in 2007 to 58.5%.

The one-year change is part of a long-term trend. Consider the last decade. Since 1999, government health care has steadily grown, from 24.7% of the population to 29%. Employer-based coverage--the pillar of private insurance--has eroded, down from 72.5%.

And employer-based coverage is less robust than those numbers imply. Remember: Local governments, state universities and other public-sector employers routinely offer insurance. Within the private sector, health insurance is less available, particularly among small firms. In a recent survey, the National Small Business Association finds that only 38% of their members offer coverage; in the 1990s, a clear majority did.

The trends are unlikely to reverse. With health inflation continuing to outstrip gross domestic product growth, employer-based insurance will only diminish more. Which means that the other major trend of recent years is also likely to continue.

The median income stood at $52,587 (measured in inflation-adjusted dollars) in 1999. In 2008, the last full year of the Bush White House, the median income had fallen to $50,303. Americans grew poorer over this decade; long before the recession, families were struggling. To put that number in perspective, median income grew by about 14% over the Clinton years.

What caused the drop? It wasn’t that employers weren’t paying more for labor. In inflation-adjusted dollars, labor costs rose 25% in the first six years of this decade alone (the hourly wage: from $19.85 to $25.67). Where did the money go? David Frum concisely answers this in Comeback: The Conservatism That Can Win Again. “Every dime--and then some--was gobbled up by the rising cost of employer-provided heath insurance ...” Health-insurance premiums more than doubled in the last decade.

Which brings us back to the health-reform debate. The president has put forward an ambitious plan to remake a sixth of the national economy: concentrating decisions in Washington, shifting millions to a price-controlled, government-run insurance and expanding existing public programs. Needless to say, the plan is expensive and controversial.

But some type of health reform is needed. Unfortunately, the opposition to his ideas is vague and disjointed. The core problem with American health care is not the lack of tort reform, despite the insistence of countless Republicans. Though popular (particularly among seniors), the politics of Medicare is misguided, even if Republican leaders have now embraced it.

American health care is feverishly expensive because it’s so cheap: People pay just 13 cents directly on every health dollar. That’s the core economic reason why costs continue to rise year after year without any clear bettering of care. It also has a spin-off effect: keeping Americans from taking more ownership of their health.

Until American health care is reformed to address this economic problem--by moving decisions closer to families, by making health information more available to create a market for health services, by implementing policies that emphasize health, not just health care--little will change.

Except the growth in government health care, of course. Which is why President Obama and his Democratic allies may be losing the legislative battle this year, but winning the overall debate.

Original Source: http://www.forbes.com/2009/09/23/health-care-reform-max-baucus-opinions-contributors-socialized-medicine.html

 

 
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