Ezra Klein: Health-care proposal would let states decide what 'real reform' is

Nov. 3 (Bloomberg) -- Norman Ornstein, resident scholar at the American Enterprise Institute, talks about the policy impact of yesterday's U.S. midterm elections, in which Republicans took control of the House of Representatives. Ornstein discusses the outlook for tax policy, health-care legislation and free-trade bills. He speaks with Matt Miller and Carol Massar on Bloomberg Television's "Street Smart." (Source: Bloomberg)
Washington Post Staff Writer
Thursday, November 18, 2010; 8:30 PM

The GOP's slogan on health-care reform has, until now, been "repeal and replace." But Republicans don't have the votes for either. What they might have the votes for is a reform that one day - if all goes well - could lead to replacement. And, believe it or not, liberals might be able to get on board with this strategy, too.

On Thursday, Sens. Ron Wyden (D-Ore.) and Scott Brown (R-Mass.) introduced the Empowering States to Innovate Act. The bill would let states develop health-care reform proposals to preempt the federal government's effort. If a state can come up with a way to comprehensively cover as many people as the federal plan, without adding to the deficit, the state can get the money it would have gotten from Uncle Sam for health-care reform but be exempt from the individual mandate, the exchanges, the insurance requirements, the subsidy scheme, and pretty much everything else.

Wyden, with the help of Sen. Bernard Sanders (I-Vt.), was able to build a version of this exemption into the originalhealth-care reform law, but for various reasons, was forced to accept a starting date of 2017 - three years after the full reform goes into effect. The Wyden-Brown legislation would allow states to propose their alternatives now and start implementing them in 2014, rather than wasting time and money setting up a federal structure that they don't plan to use.

One state that wants to give it a shotis Sanders' s Vermont. "As a single-payer advocate," Sanders says, "I believe that you can provide quality health care to every man, woman and child in a more cost-effective way. So I wanted to make sure that states have that option." Vermont Gov.-elect Peter Shumlin (D) is on the same page: "Vermont needs a single-payer system," he said during his campaign.

A government-run system like single-payer, of course, is even more objectionable to conservatives than the existing health-care law. But that's the beauty of this option: It allows liberal states to go their way, conservative states to go their way, and then lets the country judge the results. If Vermont's single-payer system provides universal care at a low cost, then maybe that would nudge California - which is facing massive budget deficits - off the fence. After all, if the states spend less than the government sends them, they would get to keep the remainder.

Conservatives, however, don't believe that will happen. They think that a consumer-directed system will offer higher-quality health care at a lower price, and with more choice. If Tennessee takes that route and outperforms Vermont, it'll be their system that spreads across the land.

The funny thing about the health-care reform debate is that for all the arguing, everyone says they're in favor of it. The GOP's 'Pledge to America,' for instance, promises that the Republicans will repeal Obama's health-care law "and put in place real reform." Shumlin, too, promises Vermonters that he'll enact "real reform." The problem is that no one seems able to agree on what real reform is. The beauty of Wyden and Brown's approach is that the country doesn't have to choose.

"Real reform," in their world, is whatever works best to cover everyone at the lowest cost. Utah and California can go their separate ways, and the other states can judge the victor based on results, not ideology.

The question is whether their colleagues on Capitol Hill will see things their way. Liberal Democrats may shiver at the thought of conservative reform plans, while conservative Democrats may worry about the possibilities of a public option or single-payer system. Republicans may fear that attempts to reform the health-care law will read to their base as if they're making peace with it rather than working to repeal it. And the various industries will fear - and likely fight - the prospect of reforms they can't anticipate, and may not benefit from.

But those who hide from this proposal are fundamentally signaling a lack of faith in their own ideas. What Wyden and Brown are offering is the chance for the various sides to prove that they're right. If industry players make the system work better, then the states that prize their involvement will prosper. If conservative solutions are more efficient, that will be clear when their beneficiaries save money. If liberal ideas really work better, it's time we found out. Forget repeal and replace, or even reform and replace. How about compete and succeed?

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