August 6, 2004

health care and income risk

Apropos the earlier comments that you should go read Jacob Hacker's piece in TNR about the riskiness of family incomes ... one of the things that health care reform in the U.S. really should address is the historical accident that health insurance is tied to the employment relationships. This has nothing to do with the question of whether you finance health care publicly or privately, and nothing to do with whether your doctor is in private practice or a salaried government employee.

In fact, untying the employment/health insurance knot would make both the labor market and the market for health care function more smoothly.

However, this historical accident (all the result of the Steelworkers contracts in the 1940s rippling through manufacturing industry) has now become embedded in the tax code too, making reform even more difficult.

Indeed, that's one of the strongest things about Kerry's health care plan is that it proposes reforms that start from where we are now, and realizes that reforming a system with so many players and interests is going to be exceedingly difficult [not to mention that bi-cameral federal system with a separate executive that we call the government]. Reading about Clinton's plans in the early 90s I always got the feeling that that would be great, but how do we get there from here! Better a half-way reform that actually succeeds than a thorough-going plan that never gets enacted.

Posted by robe0419 at August 6, 2004 2:46 PM