AS ALWAYS, THE THIRD WAY TRUMPS BOTH:

Health Insurance For All: How the GOP Can Frame the Issue (Michael Gerson, October 8, 2008, Washington Post)

There are really only two visions of health-care reform: using government to increase private insurance coverage or using government to provide health care on a larger scale. McCain takes the first approach. Obama takes the second. Under Obama's plan, medium-size and large employers would be forced either to give coverage to employees or to pay into a new government program, modeled on Medicare, that would provide public insurance. This may sound like a fair competition between public and private, but it isn't. Unlike private companies, government can cut costs by imposing price controls and shifting costs to others (just as Medicare does). Over time, this would give the government an unfair price advantage over private insurance, causing more and more businesses to pay into the public program.

Obama's health plan is really slow-motion Medicare for all. And the problem with Medicare-like price controls is that they reduce the number of people willing to provide medical services, which always means longer lines and rationing.

McCain's health plan has a problem of its own. It is not too radical but too timid. A refundable tax credit of $5,000 per family -- in addition to increased cash wages from employers no longer burdened with paying for health care -- would help middle-class workers get insurance. But for people on the lower end of the scale -- who don't qualify for Medicaid -- the $5,000 credit alone would not be enough to buy adequate coverage, which can cost more than double that amount.

To be a genuine alternative, Republicans should follow their own logic and make the ownership of private health insurance an entitlement. Fund the purchase of a basic health insurance plan completely, through a refundable tax credit, so every low-income American can afford insurance. Help consumers exercise their newfound choice of health plans by requiring the disclosure of comprehensive information on health costs and outcomes.

Universal Medicare is a frightening prospect. But it may be unavoidable unless Republicans can counter the rallying cry "health care for everyone" with a simple and superior alternative: "Health insurance for everyone."

Except that basic insurance for everyone is a nearly complete waste of money that could be invested instead. People who want such coverage should certainly be allowed to buy it or receive it from their employer as a taxable benefit, but the universal mandate should be just catastrophic coverage and an HSA, both untaxed--with tax dollars paying for those who can't afford them and for the health care of people who are so profoundly ill that no one would insure them.

Posted by Orrin Judd at October 10, 2008 10:25 AM