Ramesh Ponnuru’s op-ed in today’s New York Times on the flawed arguments for universal coverage is well worth reading. It’s a piece that needed to be written. Making universal coverage the goal of a health-care bill distorts scores of decisions, and it’s not necessary.

Many Democrats adhere to the big bang theory of health-care legislation—it’s either a big bill, with universal coverage as the goal, or nothing. And, in fact, they often argue that if universal coverage is not in the offing, then no real progress can be made at all.

That’s nonsense. As Ramesh noted, a reform built on converting today’s tax preference for job-based coverage into a credit for private insurance owned by individuals would solve the portability problem overnight and reduce the number of uninsured Americans by nearly half.

In fact, that’s probably a very pessimistic estimate of the expanded coverage that would ensue. It seems more likely a universal, refundable tax credit would very nearly cover all Americans with insurance, even as it remained voluntary. The simulation models which show some remaining uninsured households assume that these households would prefer to leave $5,000 on the table (that’s the amount of the credit suggested by Senator McCain last year) than sign up with what some might call thin coverage.

Is that a realistic assumption? Wouldn’t most households want to spend the $5,000 on something, even if it were a very high deductible plan that left them with a lot of up-front costs?

I suspect the plan Ramesh outlines would go a long way toward providing coverage for everyone who wants insurance without making that the goal or building a heavy-handed government apparatus that would damage the quality of American health care over time.

[Cross-posted at the Corner]


April 9, 2009