NOT THAT THE KNOW-NOTHING RIGHT WILL EVER CATCH ON TO HOW MUCH GOOD THE DO-NOTHING CONGRESS DID (via Kevin Whited):

A Health-Care Bargain (DAVID GRATZER, January 31, 2007, Wall Street Journal)

Three years ago this month, insurance companies began offering Americans a new type of medical coverage: health savings accounts, which marry low-cost, high-deductible health insurance policies with pre-tax accounts to pay for day-to-day health care. But the anniversary is muted. A slew of reports have been critical, dismissing consumer-driven health care as unpopular and harmful; and with the Democrats in control of Congress, Washington's enthusiasm for the concept has cooled. Nevertheless, the Republicans should take credit where due. The White House ought to build on the growing success of HSAs, which are integral to the president's vision of "affordable and available" health care.

An executive of an upstart airline recently described her company as having three 757s, more than 200 employees, and one big headache: rising health-care costs. Thus, they made the switch to HSAs in 2006, and premiums rose just 5%, compared with a national average of over 8%. Such successes aren't making the news, but overwhelmingly negative stories are. A much reported Commonwealth Fund survey, for example, concluded that enrollment in consumer-driven plans is stagnant, people are grossly dissatisfied, and care is delayed. But the report was flawed on its face: For one, it was unrepresentative, drawn from a pool of "Internet users who have agreed to participate in research surveys."

Here's the untold story: Despite recent entry into the market, these plans are gaining popularity. Drawing on information from major insurance carriers, William Boyles, publisher of the Consumer Driven Market Report, estimates that enrollment in HSA-type plans or HRAs (a forerunner to health savings accounts) more than doubled since January 2006, to 13.4 million Americans. The estimate is plausible, as last year twice as many employers offered this coverage than in 2005, and the number of financial institutions supporting HSAs tripled.

Early data suggest good results. [...]

Looking back on GOP-era Capitol Hill, welfare reform stands out as the greatest achievement; health savings accounts may eventually be considered a close second.

Except that HSA's will eventually be universal, so they are far greater.

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Bad Plan, Necessary Step: The progressive case for Bush's health insurance tax deduction (Paul Starr, 01.24.07, American Prospect)

Anyone with a long view of the struggle for universal health insurance ought to be in favor of it.

Before I bring down a chorus of disapproval, let me explain.

Ever since the 1940s, when employment-based insurance took off, proposals for universal coverage have faced a huge barrier in public opinion. The millions of people receiving employer-provided coverage have had no idea how much it costs.

Many employees believe they are getting coverage essentially for free. Or else they see their own share of the premium -- say, 20 percent -- and mistake it for the whole cost. New taxes inevitably seem to them an extra burden, and they are easily recruited into the opposition.

To get a clear and fair debate over progressive proposals -- whether those are for single-payer or other alternatives -- requires that Americans understand how much health insurance already costs. The Bush proposal is a step in that direction. It would eliminate the tax-free status of employer payments for health insurance, which means everyone would see on their W-2 how much they were paying for coverage. Then there would be a $15,000 deduction for a couple ($7,500 for a single person) regardless of whether they bought health insurance directly or received it via their job.

Is this more equitable than the current system? Yes, actually it is.

Imagine Democrats trying to take the burgeoning savings accounts of the hundreds of millions of healthy Americans?

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A Tax Increase You Could Love (AMITY SHLAES, January 26, 2007, NY Sun)

[T]he big change here isn't in the pennies and dimes. It is in the way the plan lodges responsibility for a family's health budget with the family, instead of employers. This isn't merely a tax shift but also a cultural shift, Republicans say. It would make Americans feel stronger and more economically secure.

And they are right. In fact, the move is long overdue. The old system of employers providing health care is as much a result of historical accident as of coherent policy. Back in the 1930s, Congress and President Roosevelt created Social Security over corporate protests. A national system of payment for health care seemed next. In 1945 Harry Truman would go around talking about "the right to adequate medical care."

Terrified employers raced to pre-empt Presidents Roosevelt and Truman by proving they could handle health themselves. They contracted with Blue Cross and Blue Shield to provide benefits for employee pools. The tax treatment came last -- in fact no one knew for a while whether companies really could claim the insurance deduction.

But World War II made the new arrangement seem doubly logical. Congress imposed an "excess" profits tax of as much as 90% and froze wages. Paying for health insurance was a way to reduce tax bills and keep workers, who were suddenly scarce. Unions were pleased. By 1945, 32 million Americans were in health-insurance programs, many sponsored by companies, up to 13 million from 12 million just five years before.

Though such fringe benefits quickly came to feel as American as a Ford in the driveway, the arrangement affected our culture in ways that were not all positive. It helped give rise to the Organization Man of the 1950s, a fellow dependent on his employer to the point of caricature. Corporate health plans also smothered incentives to economize. Having three parties responsible for health-cost decisions meant that no one was. Needless to say, innovations from magnetic-resonance imaging devices to the heart stent -- you name it -- only expanded spending.

Fast forward to today and the accidental health insurance exclusion has morphed into a giant revenue drain. In 2007, the federal government will forgo about $150 billion in tax revenue by way of this break. That figure is higher than the cost of either of two other such deductions, one for home-mortgage interest and the one for state and local taxes. It is something like paying for an extra Iraq every year.

Posted by Orrin Judd at January 31, 2007 8:53 PM