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It's health care day, everybody. First up, the latest from the front: employer-provided health benefit taxes, from "The only sure way to fund universal health care" by Robert Reich. To quote the nutshell:

With deficit vultures [Republican Party, no disrespect to actual vultures] already circling, [President] Obama has to come up with a far more reliable [than always controversial taxes on rich people] way to fund health care. That’s where employee health benefits come in. According to the Congressional Budget Office, taxing all employee health benefits would yield a whopping $246 billion every year. Even limiting the tax to higher-income employees [controversy to ensue] would go a long way to funding universal health care. Employer-provided health insurance is the biggest tax break in the whole federal income tax system[[with the exception of every other tax break for the $250k+ club].

On a sidenote, I hear that that club has one helluva golf course. They seed the grounds with diamonds and grow much-coveted 'crisp treasury franklin' instead of your usual bluegrass varieties.

I'm a long-time veteran of American politics, having been invited to more than a few presidential elections. It was me who found the semen stain that unraveled the already loose-woven tapestry of Billy Clinton's late presidential career. I found it, by the way, while looking for something to clean up Newt Gingrich's back sweat. I've got a fine understanding of the democratic process, and, more to the point, I look fucking fantastic in a seersucker suit. So when I heard that the Obama administration was gaming for ways to fly the healthcare hustle, and that it was taking a cue from MC Cain's 2008 album, "I'm Going to Die Soon; Please Elect Me," I knew that I'd let myself get too far out of the loop. Luckily enough, reading Reich's piece twisted me up right good.

Reich tell us that the tax-exemption eliminations for high-earners which were originally considered by the Obama administration, despite their stated cash potential of $318 billion, are like a fat kid in a lion's cage: hilariously well-intentioned, but ultimately, lacking enough hip flexor mobility and anaerobic endurance to successfully avoid a gruesome public relations disaster. The magic of the healthcare tax is that it still functions to tax the rich (or Reich's version does), but in a more indirect way that is also easier to defend. TBlogger: The Chorography - Create Posthat is precisely because health benefits have gone untaxed forever; any plan to generate revenue from employer-provided health insurance would have the advantage of being a novelty, and thus encountering a less entrenched resistance.

It seems to be a magic bullet, this healthcare tax, and one that we need to be shot with ASAP. Just look the laundry list of catastrophic problems we face with the current system:

You’re not eligible for these benefits when you and your family are likely to need them most – when you lose your job and your income plummets. And these days, as we’re witnessing, no job is safe. The system also distorts the labor market. It prevents lots of people from changing jobs for fear they’ll lose their health insurance, or won’t get the benefits they do now. And it invites employers to game the system by seeking young, healthy employees who pose low risks of ill health and will therefore keep insurance costs low, while rejecting older ones who are likely to have more costly health needs. The system also encourages employers to try to push married employees onto their spouses’s health insurance plan so that the spouse’s employer bears the cost.

At this point, the post becomes a little confusing. Reich had me at how glaringly stupid and inequitable the current arrangement is. That, however, is preaching to the lifelong uninsured, the original faithful. He switches, however, from these systemic problems to those of distribution of costs. Apparently, it's the unequal provisioning of healthcare, and not those other hoohaws, that a health-benefits tax really addresses. The rest is just there to get you angry at the system, I guess.

Or maybe... not! Yeah, that wasn't a great transition. I just ran five miles. My brain is in my feet, and my feet are swollen like Akaash's boxers in the morn'. I remember that one of the arguments tossed around by opponents of John McCain (I believe that they are called 'Socialists') and his healthcare plan was that taxing benefits posed a serious threat to the whole employer-centered system. If you tax benefits, the logic went, employers will stop offering them altogether. Since healthcare had already been in decline as a deal-sweetener since the beginning of the Bush years, it's not unreasonable to assume that any additional pressure might cause them to collapse at an even greater rate.

Reich says nothing about this, of course. He's taking a rational position for taxing high-earners, which is, after all, the only place we're gonna find any money in these Gilded-esque days. You can tell, however, that he has no interest in a mixed system; or, anyway, a mixed public-private system of basic care. Reich's invective against the inefficiencies of employer-provided, private health insurance seems to me one way to justify the gradual abolition of the system. And if a health benefit tax does stand a reasonable chance of effecting the gradual abolition--not publicly, and therefore not in a way that would leave elected officials directly culpable--then hey, why not? A single-payer basic care system would pretty much subordinate the healthcare industry (forgetting, just for now, our old democratic friend, lobbying) while creating the largest single insurance pool in the world. For those of you not familiar with insurance theory, a larger pool means a wider distribution of risk, and, therefore, a lower average cost of risk (total estimated cost of risk divided by number enrolled). With three-hundred or more million people in a national pool, your denominator would be huge; and with the government's bargaining weight behind it, your numerator would be smaller in aggregate (you could call it an economy of scale in healthcare purchasing) than the sum of the risk-cost totals of each separate insurance provider.

This huge savings, and the fact that private insurance is pretty much completely unnecessary because of it, is exactly why private insurers will fight tooth-and-nail any direct government action to provide public health insurance. While I think they should just be steamrolled, and I think that the momentum generated by our economic circumstances makes just this hardballing possible, the Obama administration has been pretty lickspittle up to this point. I don't see any balls straining the crotch-seams of anybody's suit pants at the White House. Working with what we've got, a tax that sped up the decline of private insurance could be just what we need to get to where I think we should be: a single-payer system with the possibility of a small market in private insurance for especially costly or cosmetic procedures.

Of course, I could be giving Reich way too much credit. He could turn out just to be a bad writer.