Push for National Health Care Faces Serious Obstacles

As the Seattle Times reported last week, a lot of those marching in the coordinated rallies for health care reform unabashedly support a government takeover of health care.

Many said they wanted a single-payer national health-insurance system  — the type of insurance that's widely used in Europe and Canada.

A lot of us want health care reform. But agreeing that the system needs fixing is not the same as agreeing on the fix, as would-be health care reformers discover regularly in Olympia. Still, leading Democratic Senators and the Obama administration plan have something put together and through the Senate by August. That something is likely to include taxes on employer-provided health care benefits and a huge price tag that will compete with private carriers, the Washington Post reports.

Senate Finance Committee Chairman  Max Baucus (D-Mont.) said Obama expressed a willingness to consider changing the existing tax exclusion. The decision would probably anger liberal supporters such as labor unions, but such a tax change would raise enormous sums of money as Congress and the White House are struggling to find the estimated $1.2 trillion needed to pay for health-care reform over the next decade.

Senators also want to offer Americans a "public option" - government health insurance that competes with the private sector. It looks like the indirect route to single payer. If enough people drop their private coverage to go on the public plan, the health insurance industry will face a survival crisis.

Working against reformers is the ever-deepening federal deficit and a public that is decidedly ambivalent about reform plans. Most Americans are satisfied with their health insurance and don't want to pay higher taxes for comprehensive health care reform, according to Rasmussen reports.

Nonetheless, this is not a reprise of 1993, when the Clinton health care ignited widespread public opposition. President Obama is not Hillary Clinton. The proponents are better organized. And Congressional support is hardening.

Business inclined to think that a government takeover of the health care system would aid global competitiveness might be interested in this post from Harvard economist Greg Mankiw, with a helpful link to a Congressional Budget Office study. Here's the key CBO observation:

Replacing employment-based health care with a government-run system could reduce employers’ payments for their workers’ insurance, but the amount that they would have to pay in overall compensation would remain essentially unchanged.

And your taxes will still go up.