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Robert Reich

Health care: How the Republican assault could backfire

Health care mandate, if defeated, could lead to a more popular way to fund health care.

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Americans are accustomed to paying for public insurance through their payroll taxes. Such payments aren’t viewed as federal mandates that encroach upon individual freedoms, or as payoffs to private companies likely to make even more money from mandatory purchases of their products, but as well-deserved entitlements. Indeed, the biggest problem with Social Security and Medicare is they’re so popular that politicians have had a hard time trimming their benefits to match payroll tax revenues. Had health care been added as another public insurance program financed by payroll taxes, the challenge might be even greater — which may help explain the fierce resistance of Republicans to using Social Security and Medicare as templates for the new health-care law.

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For 60 years, the battle over health-care reform has been waged over these two ways of spreading costs and risks: either through payroll taxes and public insurance, or mandated purchases from private insurers. For most of those six decades, Democrats advocated the former. Harry Truman’s initial plan for adding health insurance to Social Security was defeated, but Lyndon Johnson’s Medicare succeeded.

Apart from George W. Bush’s drug benefit, which was also based on this Democratic framework, Republicans have been on the side of mandated purchases from private insurers. In 1974, Richard Nixon’s proposed Comprehensive Health Insurance Plan would have required private employers to provide their employees with comprehensive health insurance coverage purchased from private insurers. (An employer mandate is tantamount to an individual mandate in that employees are forced to pay it indirectly, via lower wages.) Ted Kennedy simultaneously proposed universal coverage financed through Social Security taxes, essentially copying Medicare. Neither plan succeeded, but Nixon’s framework redefined idea of national health insurance from then onward.

President Obama and a majority of Democrats in the last Congress opted for the Republican model even though many Democrats would have preferred Medicare for all, or at the very least a public option. Most polls showed that the public favored such an option. But the White House hoped for Republican support and wanted to ward off opposition from health insurers and pharmaceutical companies by promising them some 30 million additional customers.

Set against this background, the current Republican attack on mandatory coverage is curious because it begs the essential question of how society would otherwise spread health-care risks. If successful—either in Congress or in the courts—a Republican victory could turn into a Phyrric one by opening the way to the alternative model, based on the system Americans seem to prefer: payroll taxes and public insurance.

(I wrote this for today’s Wall Street Journal)

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