Discussion of health care should focus on lowering prices

The Sacramento Bee, By Micah Weinberg –

July 15, 2012: The clock is ticking for health care reform, but not for the reason that you may think. It is quite unlikely that the law will be overturned next year even if Mitt Romney is elected president. But the Affordable Care Act must make good on the promise of its name and deliver affordable health care for consumers and businesses. Otherwise, the whole political conflict will be moot, and we’ll have to do something truly radical.

The reason that there is little political risk for health care reform is that we have a very conservative governing system in the United States. Because of checks and balances, the filibuster and federalism, it is very hard to do anything in this country and even harder to undo it. Though it would be technically possible for the Republicans to overturn much of the law, it would be a bare knuckle brawl that would exhaust all of Romney’s political capital.

Beyond the tragic oddity of a politician spending all of his power to destroy a program that is modeled on the greatest policy accomplishment of his life, the real reason health care reform is here to stay is that the country will face other pressing issues. The economy appears to be stagnating, and crises in Europe and China may send us into another recession. No objective observer believes that repealing health care reform will result in short-term economic stimulus. To the contrary, a study I co-authored with Jon Haveman, the chief economist of the Bay Area Council Economic Institute, shows that the Affordable Care Act will create nearly 100,000 jobs in California alone.

But whether it’s the economy, the conflict in the Middle East, climate change or any number of other issues that will have risen to the top of the public’s attention, it will make less than no sense practically to continue to focus on repealing the Affordable Care Act.

Further, public opinion polling since the Supreme Court upheld the law has turned sharply against repeal, and political consultants are already expressing concern that focus on the Affordable Care Act rather than on job creation will be a political liability with independent voters. Health care reform, therefore, isn’t going anywhere. It is here to stay.

Instead of replacing it, will the country have to build on it to provide truly affordable care for businesses and consumers? Now that’s a real issue.

There are reasons to be optimistic that the law will deliver affordable health care for those who need it most: working class people and the small businesses that employ them. Americans below median income will receive generous subsidies that will cap the amount they spend on health care to a certain percent of their income. These subsidies are particularly generous at lower income levels. This helps eliminate the “poverty trap,” in which people have a disincentive to work more because they will stop receiving assistance from the government.

And small businesses are already benefiting from the law’s small business tax credit. After some initial skepticism, claims for this credit have jumped by more than 80 percent in the past year. In 2014, small businesses will have access to a new health insurance “exchange.” In this new marketplace their purchasing power will be pooled with millions of other Californians to drive their rate increases down.

There is only so much that collective purchasing power, either of small businesses or large businesses, can do, though, if the cost of actual health care continues to rise. And rise it has. In recent years, we have seen a slowdown of total health care spending, but this has been because people have been accessing fewer services, not because the price of these services has gone down. This creates pent-up need for care, which will lead to a major spike in health care spending in the future.

The price of health care, therefore, must go down or policymakers will take more radical steps than the Affordable Care Act to address this issue. It is time, therefore, for everyone, Republican and Democrat, industry and advocates, to rededicate themselves to the cause of controlling rising health care costs within the framework of the federal health care law. Every moment spent talking about going backward is a moment wasted.

Source: John & Rusty Report via Word & Brown