What a grand bargain on health care would look like

The Washington Post reports:

“I don’t agree with everything in Marc Goldwein’s full-throated defense of raising the Medicare retirement age, but he’s right that the Affordable Care Act substantially blunts concerns about adults between 65 and 67 being able to access health care outside the Medicare system. The two major worries you’d have for members of this group is that they wouldn’t have the money to buy care or they’d have a preexisting condition that locks them out of care. The health-reform law addresses both problems.

Which gets to a broader point: I don’t think Republicans have really realized this yet, but the health-reform law unlocks a lot of potential reforms that they really like, and that no Democrat would accept in the law’s absence.

For instance: Conservatives have long wanted to convert the employer-provided tax deduction to a refundable tax credit that everyone gets, regardless of employment status. Liberals fought this because the individual market is a mess. The insurance is expensive and the insurers can reject you for preexisting conditions. Unwinding the employer-based market isn’t a good idea if it means tossing people into something worse.

But the Affordable Care Act fixes the individual market: It regulates insurers, makes sure people with preexisting conditions can get coverage and pools individual risk into collective bargaining power so insurers will compete to offer better deals. So now liberals are a lot more willing to look at flattening the tax code and moving past the employer-based market. The excise tax, in fact, is a step toward doing exactly that.

The bigger prize here is, of course, Medicare and Medicaid. Taken together, the two single-payer programs comprise most of the government’s control over the health-care sector. But if the Affordable Care Act’s exchanges work well and the program’s delivery-system reforms bring down costs, you could imagine eventually moving the two programs onto the exchanges, where beneficiaries would then be able to choose between the government insurer and a suite of private options. To some degree, that’s what Paul Ryan is proposing for Medicare, but since he coupled it with repeal of the Affordable Care Act and vouchers that grow much more slowly than health-care costs, he made the idea completely unacceptable. But as his former co-sponsor Alice Rivlin has argued, if Republicans dropped those demands and left traditional Medicare as an option, the plan would be much more attractive to Democrats.

If you take these changes together, they’d leave us with a health-care system that looks quite similar to what you see in Switzerland or the Netherlands: more universal, but also with more private-sector options for the poor, for seniors and for the employed. That’s the sort of compromise that should make both Democrats and Republicans happy, and indeed, it’s one I laid out in this piece. But Republicans seem much more interested in fighting the Affordable Care Act than in using it as a platform to re-create the entire health-care system along lines that they’ve long favored. Eventually, I think they’ll come to regret having made that decision, just as Democrats have come to regret refusing compromises in the ’60s, ’70s, ’80s and ’90s.”