The Century Foundation
Two Cheers for the Edwards Health Care Plan
Leif Wellington Haase, The Century Foundation, 2/9/2007

This week John Edwards became the first presidential candidate to move from calling for universal health insurance coverage in principle to laying out in some detail how his proposal might work. Taking this plunge deserves applause for a couple of big reasons. First, it keeps up the momentum for universal coverage. This began with state proposals and has now reached Washington and the campaign trail. The Edwards proposal ups the ante for other candidates. While too much detail can backfire and needlessly draw premature opposition, the candidates need to show enough cards to have a healthy debate.

Second, Edwards admirably broaches the issues of raising new revenues to pay for his plan—in part by instituting a new tax that would raise $90–120 billion from higher-income earners. I think you could adopt universal coverage for a lower price tag if you were more willing, like Senator Ron Wyden, to scrap and remodel more of the existing healthcare system. But moving toward universal coverage is likely to increase spending, at least in the short run. There is no reason that discussion of such an important national goal ought to be conducted within the self-imposed terms of a fiscal straightjacket.

On substance, the Edwards plan plays all the current hits as well as the golden oldies from the Clinton years. You want pay-or-play, tax credits, individual mandates, regional purchasing plans? (The proposal renames them “Health Markets,” presumably to get some love from the pro-competition crowd.) Step right up, they are all here. This smorgasbord approach to reform has some advantages. It means that Edwards will not get hemmed in by defending one feature that a large bloc of voters detests. And, to its credit, the proposal acknowledges that the endless moving parts of the plan have to operate in synch. The individual mandate requirement, for instance, does not kick in until after the Health Markets and the tax credit provisions are well-established.

But the proposal has several big disadvantages as well. For one thing, compared to a single-payer approach, the multiple-coverage options are likely to prove deeply confusing to most Americans. (According to published reports, some single-payer advocates were disappointed that Edwards did not take this route.) More troubling, this plan keeps in place several of the most shopworn elements of the existing health care system. Proposing the expansion of Medicaid and state children’s health insurance is a sensible short-run goal for Congress. But presidential candidates should be encouraged to take a longer view. Building on Medicaid, with its inferior network of providers and hopelessly convoluted state-by-state eligibility rules, is a mistake. As more individuals and businesses choose to join a regional purchasing alliance, the archaic employer-based U.S. system might wither on the vine. But it deserves a more direct push, such as the elimination of the employer tax subsidy altogether. The promise of the Edwards plan is that it will stimulate a debate among a roster of worthy reform alternatives. The danger is that its diffuse provisions will divert attention, and resources, from a focused assault on the real problems in health care.

Leif Wellington Haase is a Senior Program Officer and Health Fellow at The Century Foundation.