Opinion Column

Loading More People Onto the Titanic

House Vote: Reviews Are In

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Our health care system is truly titanic, in more than one sense of the word.

Not only is it huge, but it’s also growing at unsustainable rates that undermine our health care security and fiscal stability – and threaten to sink the system under its own weight.

When the health care debate began in earnest just after the November 2008 election, it was supposed to be about reform moving the nation toward universal coverage in a system that could be sustained in terms of costs. We could no longer “kick this can down the road.”

In the spring, it became clear there was neither the consensus on what to do about health costs or the political will to try to tackle them. That is when the health care reform effort shifted to a health insurance reform effort.

In one bit of good news, liberals have shown as much concern as conservatives about bringing costs under control, though their preferred solutions are obviously far different. Liberals pointed to the need for a robust public plan option, saying it was the key to cost containment.

But the House Democratic leadership ended up gutting the pubic option; now it’s hardly more muscular than the weakling co-ops in the Senate Finance Committee bill. As a result, neither fiscal conservatives nor liberals are left with much reason to believe the House-passed bill has much chance of bending any cost curves.

The House bill also fails to provide affordable health insurance to the middle class.

Under the legislation, an uninsured family of three earning $54,930 a year would be expected to pay $5,493 each year for their health insurance plan from the new insurance exchange-net of the government subsidies the bill would provide. A family making $73,240 a year would be expected to pay $8,789 for their health insurance. These costs are not affordable for these families.

If these families didn’t pay these premiums, they would be subject to fines equal to 2.5% of their income–$1,373 annually in the case of the family making $54,930.

The bizarre result is an incentive for families to skip buying coverage, and pay a fine that is only a small percentage of their premium costs. They’ll still be able to get insurance on demand from the exchanges should they have a big medical problem. That’s like being able to buy insurance on your house after it burns down. This kind of system will not make insurance costs lower.

Some supporters of the House bill say that, while the legislation doesn’t tackle health care costs, it’s still important to reduce the number of uninsured. Their reasoning goes: The pressure of adding 30 million more people to the system, coupled with the unsustainable cost trends, will eventually force Washington to deal with real health care reform.

That strikes me as about the same as rounding up lots more people to board the Titanic in the hope that it will sink even faster.