By Greg Sargent - November 13, 2008, 5:30PM
This is interesting: I'm told that Dem Senate staffers involved in planning health care reform are starting to mull an interesting solution: Paying for reform as part of the big economic stimulus package that the lame-duck Congress is debating.
In a private meeting this afternoon between staffers on Ted Kennedy's Health Committee and major health care reform advocates, the idea was brought up and taken seriously by the staffers, according to a person who was present.
The discussions are preliminary and the details are murky. But the fact that this idea is now bubbling up on the Senate staff level is significant, because it's one that has mostly been confined to academic circles and is only just starting to nudge out into the public eye. It's an idea that would likely command strong support from advocates.
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The staffers even suggested that the advocates -- a who's who of
influentials from the labor and lobbying community -- go out and try to sell the idea preliminarily to the public.
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The general idea -- again, this is very preliminary -- is that a stimulus package of $300 billion or more, which is being suggested in some quarters, would be very hard to spend. So around $150 billion of it could go to health care reform, perhaps in the form of a big tax credit to employers covering employees for the first time, among other things.
The basic concept is that spending now to boost the economy -- and spending on health care reform -- would get our money double value. Economist Dean Baker has a good piece explaining the idea
right here. More as we learn it.
Dean Baker:
As a basic outline, the government can give a substantial tax credit (e.g. $3,000) to employers who cover workers for the first time in 2009 and 2010. It can also offer a tax credit covering most, or all, of any additional payments by employers who increase their coverage.
This means that an employer who picked up the workers' share of insurance payments, or got a better plan, would have much of the cost reimbursed by the tax credit. Credits can also be given to individuals who are either self-employed, unemployed, or not otherwise covered through their employer.
If 20 million workers get coverage through this tax credit, that would cost $60 billion. If another 60 million get an average of $1,000 in additional health care benefits, this would cost another $60 billion. If we also throw in funding to reduce the health care burden for Medicare beneficiaries, for example by $1,000 each, this will cost roughly $40 billion. The total cost would be $160 billion a year, a reasonable target for the stimulus package.
At the same time that this health stimulus is enacted, we should open up the Medicare system, allowing all employers and individuals the option to buy into a Medicare-type plan. This is important, because a well-working public sector plan will be important to controlling costs over the long-term.
After 2010, the tax credits would be cut back, with the goal being a system of subsidies that pay the full cost for low-income people, but phase out at higher income levels. It will also be important to use the Medicare-type plan and other tools to squeeze waste out of the system, since controlling health care costs is essential to sustaining a healthy economy over the long-term.
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Over the long-run the task of containing health care costs is clearly doable. The question for President Obama now is whether he is prepared to take the big leap toward being a truly great president. This opportunity may not come again.
Great stuff.