When Richard Gephardt ran for President in the Democratic Primaries in 2004, he proposed a health care plan that would provide insurance for everyone. The plan would be paid for by rescinding the tax breaks Bush had given the rich during his first term. Gephardt’s program was Populist in that it proposed universal coverage whatever it cost and the government could pay for it if the government stopped giving money to the rich. The program was criticized for just turning money over to insurance companies so that they could continue to engage in the same old practices that led to bad care at extravagant prices. A much better plan, to me at least, was that of John Kerry, who was weak on many things, but did propose the ingenious idea that the government covers only catastrophic costs. That was economically manageable because it required far lower federal outlays. The Kerry plan also addressed some of the worst atrocities of current medical care, those people whose lives were over or whose lives were ruined financially because of care not received or care that could not be paid for. The Kerry plan also helped the nation’s businesses because employer based plans would require far lower premiums in that they would have to cover only broken bones, obstetrics, regular checkups, and other routine procedures. That was a win-win situation all around.

History has this way of making opportunities missed come back to bite you in the ass. Obama started off with such high hopes for what he could do about health care reform. He was going to insure just about everyone because, he thought, he had a mandate to get something done on health care reform. But that ran into his judgment about politics, which is not to pick fights so as to give the Republicans an issue on which to demagogue. He has been very successful in this. He has gotten through a number of pieces of legislation without lighting any powder kegs. He has let Congress draft legislation. That has left the Republicans with nothing to do in public but allow people not in office to fight with one another. Axelrod must enjoy the spectacle of Sarah Palin getting both network and cable coverage for days on end for a fight she has with a late night comedian. The Republicans are, in public, in disarray. But meanwhile Republican congress people have veto power over the content of much legislation. Katherine Sibelius appeared on This Week yesterday and was taken over the coals by George Stephanopoulos. It became clear that she was a messenger rather than someone who played a role in forming Obama health care policy. She kept saying she was not in on the details of what was going on. No Daschle, she. All she was there to do was to say that Obama preferred the public plan but would not necessarily veto a plan that was short of that. It looked like the way was being cleared for the Baucus-Grassley plan. Obama takes what he can get and calls it a victory. The Baucus-Grassley plan is pretty much the Gephardt plan with the addition of a few safeguards so that people will not be penalized for prior conditions even if their current characteristics still allows them to be put in categories that are charged higher premium. The insurance companies, on the basis of a few promises to clean up some red tape, will become the recipients of a lot of federal cash so that they can cover millions of more people. Pretty good deal for them. It is like allowing private loan companies to collect interest on student loans even though the loans are guaranteed by the federal government. Been there, done that.

Mitt Romney was virtually gloating when he appeared after Sibelius, not that it is easy to find a moment when he is not gloating. His Massachusetts plan is readily recognized as the model for the plan that is going to come out of the Baucus-Grassley collaboration. Coverage gets extended substantially but the plan is very complex. Individual subscribers have to sign up for the various options for which they qualify rather than that being left as a bookkeeping matter for the state. Even Hillary Clinton’s plan of some fifteen years ago did not think that the burden of sorting through the plans should be left to the individual subscriber. Rather, that is a legacy of the Bush Administration, which required recipients to figure out which drug plan they wanted even though the details of the differences between the plans, what was and was not covered of the drugs a person needed in one plan rather than another, a matter difficult to sort out even by health professionals.  We now seem stuck with the idea that a free market model means making the consumer do the hard work, as if we all had to be experts on engine performance data in order to buy a new car, rather than rely on the company’s reputation, and voting with our feet to go to Toyota rather than General Motors because of the reputation of a company’s cars rather than expertise about cars. So the consumer is confused about drug coverage and is likely to be confused by health insurance, and we are stuck with that, at least for a while.

The most important problem with the Massachusetts plan is that it does not control costs and so its costs may overwhelm the state’s budget. We have the worst aspects of European plans, which is that how much they can afford in the way of services depends on how much a legislatively decided budget which has to balance off any number of things, from defense to support for the arts, can manage to set aside for health care, along with the worst aspects of American plans, which makes access to medical care depend on what category of health coverage you can show yourself plugged into. This is Gephardtism run amok.

The way Obama plans to pay for his health care plan is also a throwback to the Gephardt plan. He wants to corral a pile of money as a down payment and then supplement that with the savings that are supposed to accrue from the provision of better medical care. Well, as has been suggested in these pages before, future savings do not pay present bills, and those future savings may not come true anyway, even if you use them to balance out your budget. Moreover, those future savings, accrued from present day therapies universally applied, as would happen if everybody at risk of a heart attack took proper heart attack prevention medications, has to be balanced off against those additional future expenses that will take place if some new expensive therapy comes into play for a very prevalent medical condition. What if there came on the market a medication or procedure that could really delay Altzheimer’s or really help people lose weight? That would make the medical budget shoot up. That is the trouble with projected savings: you count what you want to and don’t count what you don’t want to, such as the cost of extending the life of people so that they need a longer period of intensive medical care.

How to get around these arguments that depend on accounting gimmicks? One way is to go back to the old argument for universal medical care: which is that it should be a right rather than that it is a way to save money for General Motors. The latter argument appeals to unions and other stakeholders in GM but not, I think, to the general public. Howard Dean is now trying to get a grass roots movement started that will earn Obama a groundswell of public support for health insurance reform. Such movements have not done well in the past because it was too cheap a vote to tell a pollster that health insurance reform was a high priority. The question is whether enough people will vote for candidates in 2010 that are committed to large scale health care reform.  Then Obama, with an enlarged Congressional majority, can offer up “revisions” of the Baucus-Grassley plan. It will have been up to the voters.