A Health Care Econ 101 Lesson For Fred Hiatt

June 23, 2009

hiattI’m not completely sure why the august editorial board of the Philadelphia Inquirer thought that Fred Hiatt of the WaPo was some kind of an expert on the various health care plans currently being bandied about on Capitol Hill (and again, if there’s no public option involved, then what’s the freaking point anyway?), but they still gave him column space today on the matter (here).

And as you read it, you realize that Hiatt is preoccupied with the cost above all else. I realize that that’s a highly valid concern, but I would say that there is majority support out there for the public plan proposed by Obama all the same based on this (let’s get it going and then tinker with it to realize any additional cost savings, OK?).

And on the matter of cost, this tells us the following…

Health care costs are currently a troubling burden on families and businesses. Yet without reform, this burden will increase dramatically. The Congressional Budget Office projects that the cost of a family premium under employer-provided health insurance will increase by approximately 70 percent (after inflation) in the next nine years. This cost growth will have cascading effects across the economy as businesses trim benefits and workers lose their coverage.

According to researchers at Harvard University, a 20-percent increase in premiums costs 3.5 million workers their jobs, causes millions more to move from full-time to part-time work, and cuts the average income by approximately $1,700. CBO predicts that this 20- percent increase will occur over the next four years.

Not to be deterred, though, Hiatt tells us the following (on the matter of how to pay for it)…

Insist that it be paid for only with health-related savings and revenue. Obama proposes to finance a chunk of the new entitlement by raising general taxes on the rich. That is revenue that won’t be available for other deficit reduction.

Uh, Fred? I don’t know exactly how to break the news to you, but the taxes currently paid by “the rich” don’t do a hell of a lot to reduce the deficit anyway.

And you know those wonderful tax cuts implemented by Obama’s predecessor and the Republican congresses (for the most part, excepting the 50-50 Senate split from ’02-’04)? That did a hell of a lot to dig us into the deficit we currently face, in case you’d forgotten.

Also, I’m a little surprised to read Hiatt’s concern for taxes paid by the rich, as he puts it, under Obama, since, as he noted here, “Bush’s fiscal policy, which tilted the tax code toward the wealthy at a time of rising inequality, forced the government to devote increasing sums to pay interest on the national debt and ensured that less and less would be available for social programs for the vulnerable.”

So tilting the tax code towards the wealthy was an issue for Fred under Dubya (and rightly so), but trying to remedy that under Obama in the name of providing health coverage is an issue also?

The difference is that Obama is doing something that will generate short-term debt, I grant you, but it represents an actual investment to stimulate our economy as well as providing health insurance for the ever-growing number of those who need it, as opposed to tax cuts that stimulate nothing except income for people who never needed the help to begin with.

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