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Rescuing Reform
Suggestions for President Obama's speech to Congress on health care

Wednesday, September 9, 2009

MAKING SURE that anyone who is sick can receive treatment is, it is often said, a moral imperative for any civilized country. We agree. But here is another moral imperative: ensuring that America's adults do not incur so much debt that they choke off economic opportunity for the following generation. The potential conflict between these two imperatives is one reason President Obama's mission tonight -- rescuing health-care reform -- is so challenging.

Believe it or not, of the two tasks -- providing universal health care and controlling government red ink -- the former is easier. There's more agreement on the essentials than the volume of debate might lead you to think: Mandate that every American buy insurance and provide subsidies, on a sliding scale, to those who don't get insured at work and can't afford insurance on their own. Insist that insurance companies, as a reward for all these new customers -- many of them young and healthy -- accept anyone who wants to sign up, regardless of prior health conditions. Tax employers who don't offer insurance so as not to penalize companies that do. Establish exchanges in which competing insurance companies offer plans that customers can easily understand.

It's a mark of the fundamental soundness of this outline that most of the arguing is happening on the sidelines: about abortion, fictitious "death panels," the "public option." The last refers to a proposal for the government essentially to establish its own insurance company to compete with private firms. If, as many proponents maintain, this government entity would compete on a level playing field -- not using its public status to underprice the competition -- then its presence would be mostly irrelevant. If it would underprice, it would drive private firms out of business, leaving the United States with a British-style national health service, which most Americans say they do not want. Liberals such as House Speaker Nancy Pelosi say they would reject reform -- including the decades-old dream of universal coverage -- if it does not include a public option. We hope Mr. Obama shows more sense.

But the fiscal impact of all this is central to the nation's well-being. Having inherited an economy in a tailspin, Mr. Obama backed a $787 billion stimulus package, helping to set the country on a path toward deficits on a scale not seen in half a century. At that stage he might have caught his breath and decided to put the nation on a sounder long-term fiscal footing. Instead, he chose to double down with a new commitment of $1 trillion over 10 years, promising to address the overall national deficit comprehensively only after Congress approves this new health-care entitlement.

Given that decision, it's all the more crucial that Congress both pay for reform without gimmicks and shape reform so that health-care costs stop rising so quickly. One change in particular would help both of those goals: Stop allowing employers to provide health insurance tax-free. The tax break favors the better-off, deprives the government of huge amounts of revenue and encourages overspending on health care.

Beyond that, Congress should empower a quasi-independent board to make changes to Medicare reimbursement policies with little political interference. It should devise a more sensible method than the current tort crapshoot to punish and deter bad medical practice and to compensate its victims. And, given the difficulty it will have narrowing the deficit, Congress should not dig its hole deeper as it passes health reform: Any new entitlement should be paid for by taxes and savings within the health-care system, and not just in an artificial 10-year window, but sustainably over time.

As Mr. Obama likes to point out, nobody said this would be easy.

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