The Huckabee Plan


Sam Stein listens to Mike Huckabee’s radio commentary so you don’t have to and Ezra Klein pulls out this remark:

I want to see improvements in health care, too. But I think a better way to honor Ted Kennedy would be to ensure that every American has access to the latest private health care, as good as what senators receive.

What’s interesting is that though you sometimes hear conservatives toss this kind of line off, they never really bore deep down and try to formulate it into a plan. But you could really do this. Senators don’t get private health care from magical fairies, they’re enrolled in the Federal Employees Health Benefits Program just like lots of other people. Indeed, the federal government is the largest employer in the United States. This is a form of government-provided health insurance that just happens to be provided exclusively to civilian workers in the federal government. But it could be provided to more people.

The way it works is that since the federal workforce is so giant, they’re able to attract a large number of different competing insurance plans. On top of that, the government heavily subsidizes premiums. You can download this PDF and see the rates charged to non-USPS workers (Postal Service workers are subsidized at a higher rate) for fee for service plans. You can get a “basic” plan from Blue Cross Blue Shield for $92.44 per month ($216.48 for a family). But that’s not buying you $92.44 per month of insurance, it’s buying you $369.72 per month of insurance—the federal government is picking up the rest of the tab. For the price of $3,327.84 per year per individual or $7,793.4 per family we could extend this offer to everyone in the country.

Alternatively, there’s the Blue Cross Blue Shield “standard” package. That costs $152.06 per month for an individual or $356.59 per family. In subsidies, the federal government shells out $4,047 a year for an individual and $9,166.56 for a family.

And as I say, we could really do this. You could write a law that says that all Americans will have the right to purchase insurance on these terms with this rate of government subsidy. But you’d obviously have to raise taxes to cover the cost. You’d have to raise taxes quite a bit. And you wouldn’t achieve anything in terms of “bending the curve” or getting long-term costs under control. That said, I’m not personally opposed to the idea of higher taxes and I sort of sympathize with the view that we should do access first and cost control later. So if Mike Huckabee or other conservative legislators is serious about the idea of giving all Americans access to the same health care options U.S. Senators enjoy then I would applaud their effort to write some serious legislation to that effect.

But frankly it’s extremely hard for me to imagine the GOP getting behind the kind of tax increases that would be involved. How much are we talking about? Well, currently health care spending accounts for 17.6 percent of US GDP. About 36 percent of that is accounted for by private health insurance. And in FEHB, federal subsidies for 72 percemt of the premiums. So 72 percent of 36 percent of 17.6 comes to the idea of new federal spending of about 4.56 percent of GDP per year. In other words, about $631 billion dollars in the first year, with costs rising after that (NB this is almost certainly an underestimate since universal FEHB would likely inspire many people to buy more generous subsidies coverage). As I say, abstracting away from political reality I’m not sure that’s such a terrible idea. Slap a 5 or 6 percent VAT on the country and give every American generous health insurance. But I’m pretty sure Mike Huckabee doesn’t actually favor that course of action. Or if he does, it deserves to be articulated in a much more worked-out way than some offhand comment. Which is an awful lot of words and pixels to have just wasted on point out that Huckabee is basically an empty suit who doesn’t know what he’s talking about, but, damnit, congress has been out of session forever.