WSJ Is Confused About Obama’s Health Plan

furman2.jpgThe Wall Street Journal released an editorial on Saturday with the outrageous argument that Sen. Barack Obama’s “own health-care advisers support plans much like Mr. McCain’s,” which replaces the current employer-based coverage tax preference with a straight tax credit, “or at least they did before joining up with Mr. Obama.” The Journal’s erroneous claim rests on the fact the Obama advisors Jason Furman and David Cutler – like other notable Democratic voices in health care arena – have commented that tax credits could be part of health reform and that our current tax exemption for health insurance could (or should) be revamped. Sen. McCain has called for tax credits and eliminating the health insurance tax exemption on income taxes.

But the Journal pulls quotes out-of-context and completely ignores the fundamental differences in the thoughtful, comprehensive Democratic prescriptions for change as compared to the radical approach from Sen. McCain.

While the employer-based system isn’t perfect, it plays a crucial role in connecting Americans to coverage by encouraging risk pooling through employer policies and guarding against adverse selection. Ending that employee tax deduction without additional reforms—reforms opposed by Sen. McCain—will weaken our health care system. Sen. McCain’s health care plan is based on ultra-conservative ideology: give every American a flat, “one-size-fits-all” tax credit; end government oversight of insurance companies; force people to buy insurance on their own; and, let the market run, no matter the consequences on real people. Even former Federal Reserve Chairman Alan Greenspan has now conceded that lazzie-fare economics is a failed belief.

In the Health Affairs article cited by the Journal in making their flawed argument, Furman himself makes the case against a McCain-type plan. A plan like that proposed by Sen. McCain could “cause a large number of employers to drop coverage . . . the number of uninsured people would rise.” What are Furman’s suggestions for reforms to be paired with a change in the tax code?

– Expanding Medicaid and SCHIP

– Creating an insurance exchange

– Reinsurance

– Allowing people to buy into public plans

Sound familiar? Yes, those would all be the core elements of the Obama health care plan.

The Journal’s mistakes continue. In trying to make their case for Cutler’s supposed support for Sen. McCain, they reference a 2004 book by Cutler that has the stated purpose of making the “economic, as well as moral, case for universal insurance coverage.” For his part, John McCain has said repeatedly that the problem with the US health care system is not the uninsured. Anyone who has actually read the book (which clearly no one on the Journal editorial board has done) would understand that David Cutler and John McCain have a fundamentally different philosophy on health care.

So, yes, the Wall Street Journal is right that “obviously neither Mr. Furman nor Mr. Cutler would endorse the McCain plan outright.” The Journal got just about everything else wrong. The McCain plan doesn’t come close to the type of health care reform goals that Jason Furman and David Cutler have consistently discussed and supported during their careers. A recent poll showed voters give Sen. Obama and his team a 39 percent point advantage over Sen. McCain when it comes to who they think will do a better job of managing health care. The Journal, to say it politely, is confused about the Obama health team. The American people have it figured out.

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