To a point, I agree.

This country is in such a hole that it is senseless to deny that at least some new taxes will be needed to pay for all of the nation’s bailouts and accumulated debts.

For instance, progressives would like to end the $1 trillion cost over ten years of the Bush tax cuts for those making more than $250,000 a year.

I also believe that ending those tax cuts is necessary.

But if you’re looking to better understand the budget policy choices we face, I highly recommend the March 2011 Congressional Budget Office study, “.” The CBO prices out about all of the budget options.

Here’s a chart from that study:

It says that federal revenue, as a percentage of gross domestic product , has averaged 18 percent since the 1970s — a level that sustained both economic growth and a big government pretty well. At least, until entitlement costs, for which health care is one of the main drivers, started to skyrocket.

If you believe that it is appropriate to pay what we now pay for health care in this country, then yes, we will need lots more taxes. But, on the other hand, why would you raise taxes to pay for something everybody says has a cost that is unnecessarily sky-high? Wouldn’t the solution be to fix the cost problem?

Raising taxes is not going to solve the problem of out-of-control entitlement costs. Even huge tax increases on the rich won’t get the job done.

After the 1990s combination of the hot economy and President Bill Clinton’s tax increase, federal revenue as a percentage of GDP rose to about 21 percent — high by historic standards. Then the policies of President George W. Bush came along and dropped that share to about 16 percent — low by historic standards, and arguably either boosting the economy or helping to create the economic bubble and big deficits. The Great Recession then further pushed federal revenue to a modern-era low — about 15 percent.
According to the CBO, federal revenue will again rise to the Clinton-era level of about 21 percent of GDP — but that is when the two-year extension of the Bush tax cuts expires for everybody.

Looks to me like those who argue the Clinton-era taxes were too high are right. Looks to me like those who argue the Bush-era tax cuts are unsustainable are right. Looks to me like those who argue that our current deficit is partly driven by lower revenue because of the recession are right.

To keep federal revenue at the apparently reasonable historic level of about 18 percent of GDP, we probably do have to give back at least some of those Bush tax cuts — but it should not be necessary to end the Bush reductions that benefitted the middle class. And, we should also expect that some part of this revenue shortfall would be solved when the economy gets back on track.

If all of these steps were taken, it appears that we would be on the way to striking the right balance.

But, for those who think the deficit problem can be solved by just taxing the rich, let me point out another piece of startling information backed up by the CBO’s study of policy choices. Replacing the 10-year, $1 trillion Bush tax cut for those people making more than $250,000 a year with a combination of lower income and capital gains taxes would still be worth $1 trillion! As the CBO options paper points out, that works out to an average of about $100 billion a year during each of the next 10 years.

That is a lot of money — but not compared to the 2011 deficit that is estimated to be $1.6 trillion. Or the many $1 trillion deficits still to come.

Even if we were to raise the top rate to 45Ìýprecent for people making at least $1 million a year, and 49 percentÌýon incomes of $1 billion, we would raise only $900 billion over the next decade, according to Citizens for Tax Justice — again only a small part of the projected deficits.

So, raising taxes on rich people, by itself, hardly makes a dent.

What is making a dent — really a fiscal train wreck — is the out-of-control cost of our entitlements, particularly the health care entitlements.

Here is another chart based upon CBO numbers (that appeared in the recent :

This chart shows the impact the entitlements — particularly Medicare — will have on the federal budget if federal revenue were to hold at the historic level of about 18 percent of GDP. Anything above the black line is a deficit.

Now, remember, this is just entitlement spending. The rest of the federal budget — interest on the debt, defense spending and every other department and agency would have to get loaded on top of this mountain!

Folks, we can’t tax our way out of this mess.

There aren’t enough rich people to do it.

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First off, recent polls have shown public perception of the overhaul may be improving. Although the country is still evenly divided in its overall feelings toward the new law, a recent found that less than one in five want the whole thing repealed.ÌýSimilarly, a Kaiser Family Foundation poll released the day of the President’s State of the Union address found that, though about half of Americans remain opposed to the measure, most aren’t as supportive of repealing, replacing or defunding it as congressional Republicans are.Ìý(KHN is a program of the Kaiser Family Foundation.)

Another recent poll, this one by , found only 27 percent of those asked wanted the whole law repealed while 34 percent wanted parts of it repealed and 20 percent wanted it expanded. And within Fox’s collection of numbers, one specific finding jumped out. Only one in seven of those polled by Fox News want the health law to remain as it is.ÌýIn other words, for now at least, the country seems to be settling on “fix or improve” attitude toward what we have.

Backed by findings like these, Democrats in Congress seem just as convinced defending the bill is a winning issue as Republicans are certain they have the high ground in trying to scrap it.

But what do voters want in the run-up to the 2012 elections? Cooperation.

A recent found that 80 percentÌýof those asked said the President Barack Obama and the Republicans should work to pass legislation they can agree on — even 70 percent of Democrats agreed with that. Eighty-three percent said that it is extremely important for House Republicans to pass legislation that both parties agree on — including 77 percent of Republicans.

More than another bitter and protracted health care debate in 2011, what Americans want the Congress to focus on is policies that will lead to more jobs. While I expect a number of House committees to hold lots of health care hearings in the next few months, I also expect Republicans to begin to move on to other issues rather than spend the whole year on health care.

Back home, most House Democrats are not on the defensive over the new health care law. But that is not always the case with Senate Democrats. With a in 2012 — and with Sen. Kent Conrad, D-N.D., already deciding not to run again — it will be the Senate Democrats up for reelection who most want to look like they are being the constructive ones. The individual mandate may be oneÌýof the areasÌýon which they focus their attention.

My sense is that what many Americans, particularly swing voters, want to hear most about health care is that Democrats and Republicans found a way to work together to make the new law better — not repeal it, but not leave it as it is either.

Ironically, I expect it will be these vulnerable Democratic senators, not Republicans who still think they have a winning issue bashing the new law, who will be the most eager to fix or improve the measure.

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For starters, liberals want a health insurance system in whichÌýeveryone is covered in a more equitable health insurance pool, but conservatives argue the individual mandate used to accomplish this goal is an unconstitutional encroachment on individual freedom.

Liberals also want a standardized competitive marketplace for health insurance ensuring consumers get comprehensive benefits, but conservatives argue that this would destroy choice and the free market, and create hundreds of pages of rules about what people can and can’t buy.

And liberals want every citizen to be entitled to a comprehensive health insurance plan — a defined benefit. But conservatives want individuals to have incentives, including tax incentives, to purchase and use coverage responsibly — defined contribution health insurance.

However, Ìýthere are ways to modify the new health law so that it includes the key elements both sides see as central to moving toward covering everyone and doing it in a way we can better afford.

The key elements of such a compromise could include:

1. Eliminating the individual mandate and replacing it with freedom of choice with responsibility – The existing mandate gives many families the choice of paying a fine they can’t afford or paying even higher and more unaffordable insurance premiums. Because the penalty doesn’t apply when family premiums reach 8 percent of income, which will be the case for many, it isn’t even a very effective individual mandate.

Instead, a compromise could make guarantee issue health insurance entirely voluntary. If it is purchased when the consumer is first eligible — such as when the exchanges are first available or at the time of a new job — the consumer would not be subjected to underwriting or preexisting condition rules. The compromise, though, should let consumers purchase and use their health insurance at any other time. But if they didn’t purchase coverage when they were first eligible, any preexisting condition would be subject to a two-year waiting period.

2. Eliminating the benefit mandates in the new law and creating a free market of health insurance choices, but with a standardized baseline for ease of comparison – Eliminate all of the benefit mandates in the new law requiring individual market and exchange consumers to purchase only plans that are yet to be outlined in what will be hundreds of pages of regulations. Instead, a compromise could have only two new benefit requirements. One could be a standard plan, which would take the law’s existing “silver plan” and use it as a baseline. Every insurer would have to offer this coverage on the exchange or in the individual market. But insurers could also offer consumers any other plan design, so long as they told consumers the relative actuarial value the other plans had to the standard plan. The second would be a health savings account. Every insurer would have to offer an HSA-style program and state its value relative to the standard plan. Consumers who would be eligible for premium subsidies would have any premium savings deposited in a health savings account.

3. Eliminating the “Cadillac” tax on high cost health insurance plans and introducing elements of a conservative defined contribution approach to the existing liberal defined benefit legislation – With exchange premium subsidies already based upon the value of the new law’s silver plan (and they should continue to be), the compromise could limit the employer deduction for health insurance, as well as the individual income tax exemption for employer-provided health insurance, to the cost of the standard plan (currently the silver plan) in any year. Phase this limit in over a period of seven-years — to 2018, when the “Cadillac” tax was to take effect. As a result, tax policy would continue to support comprehensive coverage but also provide real incentives for consumers to buy wisely.

4. Using the budget gains from limiting the existing health insurance tax preference to pay for such things as improving the now inadequate insurance subsidies for the middle-class, permanently fixing the Medicare physician payment issue, or for reducing the deficit. In 2008, the CBO calculated a 10-year savings of $450 billion by limiting health plan tax preferences to the 75th percentile of premiums then paid by employers.

5. Letting states have the flexibility to experiment with alternatives by enacting the proposal by Sen. Ron Wyden, D-Ore., and Sen. Scott Brown, R-Mass., that would move up to 2014 the year in which states can submit proposals to the Secretary of the Department of Health and Human Services to implement their version of health care reform. The law already allowsÌýstates to petition the federal government to use the overhaul’s money to enact their own plansÌýso long as they cover as many people as the new law would have — but not until 2017.

The Republican House of Representatives will almost certainly vote to repeal the new health care law early this year. But everyone knows that is for show — the Democratic-controlled Senate will not go along, nor will President Barack Obama.

On the current partisan political track, we are destined to have a stand-off for two years with Democrats and Republicans blaming each other for gridlock while uncertainty over the new health law, and its 2014 deadlines, has consumers, employers, and health industry stakeholders unable to plan for the future — only providing another burden of uncertainty in an economy trying to regain its footing.

If the Congress waits until after the 2012 elections before seriously considering changes to the law, it will be 2013 and less than a year before key elements of the legislation are due to take effect.

Or, we can recognize that both sides can get a lot of what they really want by agreeing to a few key and carefully placed changes to the existing law.

Liberals can improve even further the promise that consumers will have access to comprehensive health insurance while still bringing down the cost and underwriting barriers.

Conservatives can significantly move toward their goal of a free market for health care by expanding choices and crafting new incentives for people to make more efficient health care purchasing decisions.

And, these objectives can coexist, giving the American people the confidence we really have accomplished something.

Or, both sides can play a cynical game in the run up to 2012 and the people can be the losers.

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I don’t see it.

First, the individual mandate isn’t even close to what it has been made to be — a provision that would protect the integrity of the health insurance market by forcing people to buy health insurance before they became sick. At best, it’s a tepid attempt at that.

The individual mandate’s fine for not buying coverage is 1 percentÌýof family income or $95 for each family member not covered, whichever is greater in 2014; 2 percentÌýof income or $325 per family member, whichever is greater in 2015; and $695 or 2.5 percentÌýof income or whichever is greater in subsequent years (kids are half price!).

These are meaningful fines for not buying insurance, but only a fraction of what a consumer would pay for health insurance.

Here’s how the individual mandate’s fine for non-compliance actually works for a number of representative family income levels based upon 2010 incomes and poverty levels:

Alternatively, here is what families would be required to pay under the health law toward their health insurance premiums based upon their total family income — net of the federal subsidy — in 2010 dollars:

Ìý A family of four making $55,000 per year is at 250 percentÌýof the federal poverty level this year. Based upon today’s incomes, the maximum they would pay in the exchange for health insurance is 8.05 percentÌýof their income, net of the federal subsidy — $4,428 annually.

So, under the health law’sÌýindividual mandate, this $55,000 family would likely pay no more than $550 in fines the first year, $1,100 the second year and $1,375 in fines the third and subsequent years;Ìýor, alternatively, have to pay $4,428 for insurance net of the federal subsidy in the exchange.

A family making $85,000 a year (400 percentÌýof poverty) would have to pay $8,075 for their share of the cost of health insurance in the exchange or likely pay a fine in the first year of $850 that would likely cap out at 2.5 percentÌýof $88,000, or $2,125, in later years.

Families would also have to pay their share of deductibles and co-pays within the insurance policies they purchased.

The fine families would pay for ignoring the individual mandate to purchase health insurance is significant but only a fraction of what the insurance would cost.

If the individual mandate is eventually held unconstitutional by the Supreme Court there will be attempts to substitute an alternative means to protect the insurance market from the “anti-selection” that would occur as people held back on purchasing health insurance until they needed it.

One possible alternative to the individual mandate would be to allow consumers to purchase coverage only at limited open enrollment periods — buy it now or you won’t be able to get it when you get sick.

Given how tepid the current individual mandate penalties are, such an alternative scheme could be much more effective in protecting the insurance markets, as well as far more politically palatable for consumers faced with paying either an unaffordable insurance fine or an even more unaffordable insurance premium, than the current weak individual mandate before the courts.

All of the focus on the recent Richmond federal court ruling misses the big picture on health insurance affordability under the new law: Many middle class families will not be happy with or be able to afford the fines nor will they be able to afford the much higher cost of health insurance — even after the federal subsidy.

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If the Republicans are serious about getting America’s fiscal house in order they are going to have to do a lot better than that.

During the election, I heard one Tea Party Republican candidate for the House say that we needed to get on top of all of the deficit spending and to do that we needed to reform the entitlement programs. But then he said hospitals and doctors are underpaid and we need to be sure they get better reimbursements.

Democrats aren’t much better at confronting the entitlement problems. President Obama has been telling the American people that the health care bill they passed in March — the Patient Protection and Affordable Care Act — will make health insurance affordable. Heck, it’s in the title of the bill. He’s also been saying that the new law actually reduces the deficit.

It is true the Congressional Budget OfficeÌýdoes estimate the new health care law will cover about 30 million more people and reduce the deficit by $138 billion over ten years. Of course to reach these numbers the bill uses plenty of budget gimmicks like front-end loading revenue and back-end loading benefits, ignoring the $300 billion physician fee crisis and raising taxes by $500 billion.

But, accepting the claim that the bill does reduce the deficit by $138 billion, we also need to remember that the same CBO report predicts we will add $12.7 trillion to the deficit over the next ten years — a big chunk of it because of the health care entitlement costs that are out-of-control. To put this into perspective, without the $138 billion reduction in the deficit because of the health care bill, the CBO would have projected a $12.838 trillion increase in the deficit!

So both sides aren’t exactly facing our nation’s biggest fiscal problems in an honest way.

The Democrats refuse to admit their new health care law is not the kind of health care reform that would have at least begun to fix the entitlement problem.

Republicans haven’t done more than go negative on the new health care law and haven’t put up any real proposals for how they would deal with this conundrum. Their favorite campaign sound bite was to call for selling insurance across state lines. Just which state’s health insurance policies are affordable and would make health insurance affordable if they were sold in the rest of the states?

The health care entitlements, the old ones and the new one, simply swamp the federal budget. Take a look at the chart below. It comes from the same CBO report that affirms President Obama’s claim that the new health care law actually reduces the deficit by $138 billion.

There are a couple of thing to note about the CBO’s long-range federal budget projections:

— While Social Security is a challenge, it’s a pretty modest a challenge when compared to the health care entitlements.

— If the Democrats had really done health care reform this year, the trend line for the cost of the health care entitlements would not be continuing its startling upward trend.

— All of the rest of federal spending, including for defense, is a fairly small part of America’s deficit and debt challenges. Big cuts there hardly matter if you aren’t going to tackle the health care entitlements.

Don’t “scare” seniors? I’ve read the reports and I’m scared. What we just saw occur was “health care reform?” Hardly.

We need more proposals like those being made by the President’s deficit reduction commission, and the Medicare reform proposal authored by Republican House members Paul Ryan of Wisconsin, Eric Cantor of Virginia and Kevin McCarthy of California. Irrespective of whether they are the best proposals, their authors started from a place where they told the truth.

More than scaring seniors, or anyone else, both Democrats and Republicans need to treat the American people like adults and be honest about just how critical a problem we have with health care spending. If both sides could do that first, then it would make it a lot easier to have a real conversation about the trade-offs we will, someday, inevitably have no choice but to make.

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Many Americans are either left-brain liberals or right-brain conservatives, with the remainder somewhere in the middle. These left- and right-brain types look at the same facts but come to different conclusions-no matter what.

This past election, something unique occurred. The independents were so frustrated with the Republicans about the Iraq war, the financial meltdown and the spendthrift ways of Congress that they swept liberals into power and apparently gave them a mandate to pass health care reform.

The liberals set about doing just that. No false advertising was involved-they crafted health care bills consistent with their campaign promises. But when conservatives erupted over the legislation last summer, they reminded many of those independent voters about their more-moderate political instincts.

It turns out that liberals needed the backing of a handful of moderate Republicans — not because they needed their votes, but because they needed their endorsements.

By August, when the raucous town meetings occurred, it became clear that liberals had overplayed their hand on health care. After election defeats in Virginia, New Jersey and, most notably, Massachusetts, as well as months of months of sagging opinion polls, Democrats tried to adjust.

There was one problem: The more that the Democratic leadership pulled the health plan toward the center, the worse it looked to everyone-liberals, conservatives and independents.

That was the backdrop as Democrats and Republicans arrived at Blair House Thursday for the health care summit – a meeting that was not so much an attempt at bipartisanship as an effort to create political cover for wavering Democratic moderates in the House and Senate.

The thinking was that if the president and the Democratic leadership managed to show that their plan was better than the comparatively thin Republican approach – and as a result win points in the public opinion polls — the moderates would perhaps feel free to vote for the big Democratic bill.

But the White House summit ended in a draw.

The Democrats talked about the substance of the bill, but the Republicans knew that the latest polls favored “starting over” and aggressively repeated that message all day. They played to the anxiety of swing voters about a huge entitlement expansion in the face of the Great Recession, as well as skepticism about the Democrats’ trillion-dollar numbers.

Now, with the session behind them, Democratic leaders and the president apparently believe they can’t go backward and that tearing up their health care bill would be admitting they can’t govern with huge majorities. Also off the table is support from moderate Republicans.

The Democrats have two options.

The first is to ignore the recent state elections and the polls and ram their bill through Congress using controversial reconciliation rules. The problem: There are as many as 90 House Democrats who are vulnerable in the November elections, and at least half are moderate Democrats who weren’t ever enamored with health care proposals written by their more liberal leadership.

The second is “Plan B,” a scaled-down bill costing about a third of the big bill and far more modest in giving the government authority over the health care system. It could likely attract some Republican votes and give Democrats, particularly moderates, a legitimate claim that they listened to voters and acted in a more measured way. It also would give the president and the Democratic congressional leadership something positive to show at election time.

The Democrats will use the coming weeks to see if they can talk members of their own party into taking the Great Health Care Leap of 2010.

My sense is that they better have a Plan B ready to go.

After watching this debate, as well as the Clinton health care battle 15 years ago, my conclusion is that arrogant partisanship on big, consequential policy issues is a prescription for failure.

What a mess.

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But we will ultimately have real health care reform in this country for a very simple reason: We have no choice and both Democrats and Republicans understand that. More importantly, the American people know it.

If there is one common lesson in the collapse of the Democratic health care efforts in 1994 and 2010, it’s that something as big, complex and controversial as reform has to be done in a bipartisan way.

Was the recent debate hyperpartisan? Were the Democrats arrogant in thinking they could ram through their liberal health care agenda? Did lots of Republicans demagogue the Democratic efforts as soon as the debate clearly turned partisan? Isn’t it true the Republicans haven’t had a serious health plan of their own?

Yes to all of the above.

But if the Democrats and Republicans are serious about being bipartisan, there are opportunities. There are at least 10 Republican senators who have a track record of good faith on health care issues. They include the Senate Finance Committee Republicans who worked hard to get a deal last summer; Orrin Hatch, who co-wrote the children’s health plan; John McCain, who co-sponsored the patients’ bill of rights with Ted Kennedy, and the Republicans who support the Wyden-Bennett bill.

Can we achieve something bipartisan and modest in this election year? It isn’t likely but it is not impossible. True, the Republican base isn’t going to support any efforts to reach out to Democrats who are dangling on a political meat hook.

And liberals are going to have to swallow a lot of the hubris that is at the root of Democrats’ current political fix.

Republicans also need to understand that voter anger at the Democrats is not the same as support for Republicans. In 1994, Gingrich and his team had new and fresh ideas. In 2010, these Republicans are the guys we threw out in 2006 and 2008 — and they certainly haven’t offered any new and intriguing ideas lately to fix the health care system.

Both sides could benefit from behaving themselves and actually accomplishing something tangible. A few modest first steps could do a lot to begin to build some bipartisan trust — and actually help some Americans who need it.

Calls to deal with insurance reform — eliminating pre-existing conditions and medical underwriting limits — would not likely be part of these first steps. To make those changes, we would have to get both the sick and the healthy into the health insurance risk pool. And that means mandates and hundreds of billions of dollars in subsidies; those provisions aren’t possible without reconstructing the same big bills now on the table.

In fact, President Barack Obama and Congress have already taken some important steps on health care. They have, for example, expanded and extended the Children’s Health Insurance Program, and promoted Ìýhealth information technology and comparative effectiveness as part of the stimulus bill.

Now they should take some other good bipartisan steps:

Approve lesser health insurance reforms that are in the Democratic bills. Bar policy rescissions for immaterial and inadvertent consumer mistakes and provide federal funding for state-based high-risk pools serving the uninsured.

Create subsidies for small businesses to buy health insurance. The number of small businesses that provide coverage is melting in the face of the high cost of insurance. The small group market would be a good place to begin to spend subsidy dollars; it already has less- restrictive underwriting rules because it is generally a guaranteed- issue market. Most of the working uninsured don’t have coverage because their small employers can’t offer it. This would be a very efficient way of making progress toward covering people.

Expand Medicaid in a modest way. The House bill would expand Medicaid coverage to people with incomes up to 150 percent of the federal poverty level; the Senate bill, 133 percent. What can we afford now? From the existing state average of 65 percent of the poverty level, there might be enough money available to fully fund an expansion of Medicaid to 80 percent or 90 percent.

A huge bipartisan step would be to grant the Republicans some commonsense tort reform.

Would enacting this list constitute health care reform?

No.

But it could be the beginning of a process to rebuild bipartisan effectiveness, trust between the parties, voter confidence and actually help millions of people.

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You would be hard pressed to find any health policy expert who isn’t disappointed that cost containment has fallen off the health care “reform” express. In fact, it’s more commonplace to hear the term “budget-buster” when these bills are discussed.

Now, even many proponents of the bills are conceding there isn’t a lot of cost containment in them and beginning to argue that since the American people aren’t ready for real reform let’s just get on with passing what’s on the table.

But this rationalization misses something very important.

We already have high quality and lower cost health care being delivered around the country and people are not only supportive of it, they are flocking to it.

The Mayo and Cleveland clinics are touted as high quality and lower cost models for delivering health care services. Who wouldn’t want to be treated there?

work has consistently shown that there are high-cost high-growth regions and there are low-cost low-growth regions. The conclusion has been that if the highest cost regions operated more like the lower cost regions America’s health care costs could be sustainable.

Yet, I have detected no public rejection in those low-cost areas because people believe they are getting poor quality health care. In fact, the Dartmouth data would seem to demonstrate that the quality of health care being delivered in the lower cost areas is better than in the higher cost areas.

The primary objective for health care reform always should have been more value for lower cost. It still should.

There is plenty of evidence that higher value health care for a lower cost is actually happening around the country and, when given a choice, that it is actually what patients prefer. Would you turn down an appointment at Mayo?

So, what do you say we ditch the latest rationalization for passing a budget-busting health care bill and start over. Since most of the benefits in the House bill don’t begin until 2013, and 2014 for the Senate bill, what’s the rush? We have plenty of time to take this back to where it should have been in the first place- beginning the long and complex journey to create a health care system that pays for value.

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Our health care system is truly titanic, in more than one sense of the word.

Not only is it huge, but it’s also growing at unsustainable rates that undermine our health care security and fiscal stability – and threaten to sink the system under its own weight.

When the health care debate began in earnest just after the November 2008 election, it was supposed to be about reform moving the nation toward universal coverage in a system that could be sustained in terms of costs. We could no longer “kick this can down the road.”

In the spring, it became clear there was neither the consensus on what to do about health costs or the political will to try to tackle them. That is when the health care reform effort shifted to a health insurance reform effort.

In one bit of good news, liberals have shown as much concern as conservatives about bringing costs under control, though their preferred solutions are obviously far different. Liberals pointed to the need for a robust public plan option, saying it was the key to cost containment.

But the House Democratic leadership ended up gutting the pubic option; now it’s hardly more muscular than the weakling co-ops in the Senate Finance Committee bill. As a result, neither fiscal conservatives nor liberals are left with much reason to believe the House-passed bill has much chance of bending any cost curves.

The House bill also fails to provide affordable health insurance to the middle class.

Under the legislation, an uninsured family of three earning $54,930 a year would be expected to pay $5,493 each year for their health insurance plan from the new insurance exchange-net of the government subsidies the bill would provide. A family making $73,240 a year would be expected to pay $8,789 for their health insurance. These costs are not affordable for these families.

If these families didn’t pay these premiums, they would be subject to fines equal to 2.5% of their income–$1,373 annually in the case of the family making $54,930.

The bizarre result is an incentive for families to skip buying coverage, and pay a fine that is only a small percentage of their premium costs. They’ll still be able to get insurance on demand from the exchanges should they have a big medical problem. That’s like being able to buy insurance on your house after it burns down. This kind of system will not make insurance costs lower.

Some supporters of the House bill say that, while the legislation doesn’t tackle health care costs, it’s still important to reduce the number of uninsured. Their reasoning goes: The pressure of adding 30 million more people to the system, coupled with the unsustainable cost trends, will eventually force Washington to deal with real health care reform.

That strikes me as about the same as rounding up lots more people to board the Titanic in the hope that it will sink even faster.

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To a point, I agree.

This country is in such a hole that it is senseless to deny that at least some new taxes will be needed to pay for all of the nation’s bailouts and accumulated debts.

For instance, progressives would like to end the $1 trillion cost over ten years of the Bush tax cuts for those making more than $250,000 a year.

I also believe that ending those tax cuts is necessary.

But if you’re looking to better understand the budget policy choices we face, I highly recommend the March 2011 Congressional Budget Office study, “.” The CBO prices out about all of the budget options.

Here’s a chart from that study:

It says that federal revenue, as a percentage of gross domestic product , has averaged 18 percent since the 1970s — a level that sustained both economic growth and a big government pretty well. At least, until entitlement costs, for which health care is one of the main drivers, started to skyrocket.

If you believe that it is appropriate to pay what we now pay for health care in this country, then yes, we will need lots more taxes. But, on the other hand, why would you raise taxes to pay for something everybody says has a cost that is unnecessarily sky-high? Wouldn’t the solution be to fix the cost problem?

Raising taxes is not going to solve the problem of out-of-control entitlement costs. Even huge tax increases on the rich won’t get the job done.

After the 1990s combination of the hot economy and President Bill Clinton’s tax increase, federal revenue as a percentage of GDP rose to about 21 percent — high by historic standards. Then the policies of President George W. Bush came along and dropped that share to about 16 percent — low by historic standards, and arguably either boosting the economy or helping to create the economic bubble and big deficits. The Great Recession then further pushed federal revenue to a modern-era low — about 15 percent.
According to the CBO, federal revenue will again rise to the Clinton-era level of about 21 percent of GDP — but that is when the two-year extension of the Bush tax cuts expires for everybody.

Looks to me like those who argue the Clinton-era taxes were too high are right. Looks to me like those who argue the Bush-era tax cuts are unsustainable are right. Looks to me like those who argue that our current deficit is partly driven by lower revenue because of the recession are right.

To keep federal revenue at the apparently reasonable historic level of about 18 percent of GDP, we probably do have to give back at least some of those Bush tax cuts — but it should not be necessary to end the Bush reductions that benefitted the middle class. And, we should also expect that some part of this revenue shortfall would be solved when the economy gets back on track.

If all of these steps were taken, it appears that we would be on the way to striking the right balance.

But, for those who think the deficit problem can be solved by just taxing the rich, let me point out another piece of startling information backed up by the CBO’s study of policy choices. Replacing the 10-year, $1 trillion Bush tax cut for those people making more than $250,000 a year with a combination of lower income and capital gains taxes would still be worth $1 trillion! As the CBO options paper points out, that works out to an average of about $100 billion a year during each of the next 10 years.

That is a lot of money — but not compared to the 2011 deficit that is estimated to be $1.6 trillion. Or the many $1 trillion deficits still to come.

Even if we were to raise the top rate to 45Ìýprecent for people making at least $1 million a year, and 49 percentÌýon incomes of $1 billion, we would raise only $900 billion over the next decade, according to Citizens for Tax Justice — again only a small part of the projected deficits.

So, raising taxes on rich people, by itself, hardly makes a dent.

What is making a dent — really a fiscal train wreck — is the out-of-control cost of our entitlements, particularly the health care entitlements.

Here is another chart based upon CBO numbers (that appeared in the recent :

This chart shows the impact the entitlements — particularly Medicare — will have on the federal budget if federal revenue were to hold at the historic level of about 18 percent of GDP. Anything above the black line is a deficit.

Now, remember, this is just entitlement spending. The rest of the federal budget — interest on the debt, defense spending and every other department and agency would have to get loaded on top of this mountain!

Folks, we can’t tax our way out of this mess.

There aren’t enough rich people to do it.

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First off, recent polls have shown public perception of the overhaul may be improving. Although the country is still evenly divided in its overall feelings toward the new law, a recent found that less than one in five want the whole thing repealed.ÌýSimilarly, a Kaiser Family Foundation poll released the day of the President’s State of the Union address found that, though about half of Americans remain opposed to the measure, most aren’t as supportive of repealing, replacing or defunding it as congressional Republicans are.Ìý(KHN is a program of the Kaiser Family Foundation.)

Another recent poll, this one by , found only 27 percent of those asked wanted the whole law repealed while 34 percent wanted parts of it repealed and 20 percent wanted it expanded. And within Fox’s collection of numbers, one specific finding jumped out. Only one in seven of those polled by Fox News want the health law to remain as it is.ÌýIn other words, for now at least, the country seems to be settling on “fix or improve” attitude toward what we have.

Backed by findings like these, Democrats in Congress seem just as convinced defending the bill is a winning issue as Republicans are certain they have the high ground in trying to scrap it.

But what do voters want in the run-up to the 2012 elections? Cooperation.

A recent found that 80 percentÌýof those asked said the President Barack Obama and the Republicans should work to pass legislation they can agree on — even 70 percent of Democrats agreed with that. Eighty-three percent said that it is extremely important for House Republicans to pass legislation that both parties agree on — including 77 percent of Republicans.

More than another bitter and protracted health care debate in 2011, what Americans want the Congress to focus on is policies that will lead to more jobs. While I expect a number of House committees to hold lots of health care hearings in the next few months, I also expect Republicans to begin to move on to other issues rather than spend the whole year on health care.

Back home, most House Democrats are not on the defensive over the new health care law. But that is not always the case with Senate Democrats. With a in 2012 — and with Sen. Kent Conrad, D-N.D., already deciding not to run again — it will be the Senate Democrats up for reelection who most want to look like they are being the constructive ones. The individual mandate may be oneÌýof the areasÌýon which they focus their attention.

My sense is that what many Americans, particularly swing voters, want to hear most about health care is that Democrats and Republicans found a way to work together to make the new law better — not repeal it, but not leave it as it is either.

Ironically, I expect it will be these vulnerable Democratic senators, not Republicans who still think they have a winning issue bashing the new law, who will be the most eager to fix or improve the measure.

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For starters, liberals want a health insurance system in whichÌýeveryone is covered in a more equitable health insurance pool, but conservatives argue the individual mandate used to accomplish this goal is an unconstitutional encroachment on individual freedom.

Liberals also want a standardized competitive marketplace for health insurance ensuring consumers get comprehensive benefits, but conservatives argue that this would destroy choice and the free market, and create hundreds of pages of rules about what people can and can’t buy.

And liberals want every citizen to be entitled to a comprehensive health insurance plan — a defined benefit. But conservatives want individuals to have incentives, including tax incentives, to purchase and use coverage responsibly — defined contribution health insurance.

However, Ìýthere are ways to modify the new health law so that it includes the key elements both sides see as central to moving toward covering everyone and doing it in a way we can better afford.

The key elements of such a compromise could include:

1. Eliminating the individual mandate and replacing it with freedom of choice with responsibility – The existing mandate gives many families the choice of paying a fine they can’t afford or paying even higher and more unaffordable insurance premiums. Because the penalty doesn’t apply when family premiums reach 8 percent of income, which will be the case for many, it isn’t even a very effective individual mandate.

Instead, a compromise could make guarantee issue health insurance entirely voluntary. If it is purchased when the consumer is first eligible — such as when the exchanges are first available or at the time of a new job — the consumer would not be subjected to underwriting or preexisting condition rules. The compromise, though, should let consumers purchase and use their health insurance at any other time. But if they didn’t purchase coverage when they were first eligible, any preexisting condition would be subject to a two-year waiting period.

2. Eliminating the benefit mandates in the new law and creating a free market of health insurance choices, but with a standardized baseline for ease of comparison – Eliminate all of the benefit mandates in the new law requiring individual market and exchange consumers to purchase only plans that are yet to be outlined in what will be hundreds of pages of regulations. Instead, a compromise could have only two new benefit requirements. One could be a standard plan, which would take the law’s existing “silver plan” and use it as a baseline. Every insurer would have to offer this coverage on the exchange or in the individual market. But insurers could also offer consumers any other plan design, so long as they told consumers the relative actuarial value the other plans had to the standard plan. The second would be a health savings account. Every insurer would have to offer an HSA-style program and state its value relative to the standard plan. Consumers who would be eligible for premium subsidies would have any premium savings deposited in a health savings account.

3. Eliminating the “Cadillac” tax on high cost health insurance plans and introducing elements of a conservative defined contribution approach to the existing liberal defined benefit legislation – With exchange premium subsidies already based upon the value of the new law’s silver plan (and they should continue to be), the compromise could limit the employer deduction for health insurance, as well as the individual income tax exemption for employer-provided health insurance, to the cost of the standard plan (currently the silver plan) in any year. Phase this limit in over a period of seven-years — to 2018, when the “Cadillac” tax was to take effect. As a result, tax policy would continue to support comprehensive coverage but also provide real incentives for consumers to buy wisely.

4. Using the budget gains from limiting the existing health insurance tax preference to pay for such things as improving the now inadequate insurance subsidies for the middle-class, permanently fixing the Medicare physician payment issue, or for reducing the deficit. In 2008, the CBO calculated a 10-year savings of $450 billion by limiting health plan tax preferences to the 75th percentile of premiums then paid by employers.

5. Letting states have the flexibility to experiment with alternatives by enacting the proposal by Sen. Ron Wyden, D-Ore., and Sen. Scott Brown, R-Mass., that would move up to 2014 the year in which states can submit proposals to the Secretary of the Department of Health and Human Services to implement their version of health care reform. The law already allowsÌýstates to petition the federal government to use the overhaul’s money to enact their own plansÌýso long as they cover as many people as the new law would have — but not until 2017.

The Republican House of Representatives will almost certainly vote to repeal the new health care law early this year. But everyone knows that is for show — the Democratic-controlled Senate will not go along, nor will President Barack Obama.

On the current partisan political track, we are destined to have a stand-off for two years with Democrats and Republicans blaming each other for gridlock while uncertainty over the new health law, and its 2014 deadlines, has consumers, employers, and health industry stakeholders unable to plan for the future — only providing another burden of uncertainty in an economy trying to regain its footing.

If the Congress waits until after the 2012 elections before seriously considering changes to the law, it will be 2013 and less than a year before key elements of the legislation are due to take effect.

Or, we can recognize that both sides can get a lot of what they really want by agreeing to a few key and carefully placed changes to the existing law.

Liberals can improve even further the promise that consumers will have access to comprehensive health insurance while still bringing down the cost and underwriting barriers.

Conservatives can significantly move toward their goal of a free market for health care by expanding choices and crafting new incentives for people to make more efficient health care purchasing decisions.

And, these objectives can coexist, giving the American people the confidence we really have accomplished something.

Or, both sides can play a cynical game in the run up to 2012 and the people can be the losers.

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I don’t see it.

First, the individual mandate isn’t even close to what it has been made to be — a provision that would protect the integrity of the health insurance market by forcing people to buy health insurance before they became sick. At best, it’s a tepid attempt at that.

The individual mandate’s fine for not buying coverage is 1 percentÌýof family income or $95 for each family member not covered, whichever is greater in 2014; 2 percentÌýof income or $325 per family member, whichever is greater in 2015; and $695 or 2.5 percentÌýof income or whichever is greater in subsequent years (kids are half price!).

These are meaningful fines for not buying insurance, but only a fraction of what a consumer would pay for health insurance.

Here’s how the individual mandate’s fine for non-compliance actually works for a number of representative family income levels based upon 2010 incomes and poverty levels:

Alternatively, here is what families would be required to pay under the health law toward their health insurance premiums based upon their total family income — net of the federal subsidy — in 2010 dollars:

Ìý A family of four making $55,000 per year is at 250 percentÌýof the federal poverty level this year. Based upon today’s incomes, the maximum they would pay in the exchange for health insurance is 8.05 percentÌýof their income, net of the federal subsidy — $4,428 annually.

So, under the health law’sÌýindividual mandate, this $55,000 family would likely pay no more than $550 in fines the first year, $1,100 the second year and $1,375 in fines the third and subsequent years;Ìýor, alternatively, have to pay $4,428 for insurance net of the federal subsidy in the exchange.

A family making $85,000 a year (400 percentÌýof poverty) would have to pay $8,075 for their share of the cost of health insurance in the exchange or likely pay a fine in the first year of $850 that would likely cap out at 2.5 percentÌýof $88,000, or $2,125, in later years.

Families would also have to pay their share of deductibles and co-pays within the insurance policies they purchased.

The fine families would pay for ignoring the individual mandate to purchase health insurance is significant but only a fraction of what the insurance would cost.

If the individual mandate is eventually held unconstitutional by the Supreme Court there will be attempts to substitute an alternative means to protect the insurance market from the “anti-selection” that would occur as people held back on purchasing health insurance until they needed it.

One possible alternative to the individual mandate would be to allow consumers to purchase coverage only at limited open enrollment periods — buy it now or you won’t be able to get it when you get sick.

Given how tepid the current individual mandate penalties are, such an alternative scheme could be much more effective in protecting the insurance markets, as well as far more politically palatable for consumers faced with paying either an unaffordable insurance fine or an even more unaffordable insurance premium, than the current weak individual mandate before the courts.

All of the focus on the recent Richmond federal court ruling misses the big picture on health insurance affordability under the new law: Many middle class families will not be happy with or be able to afford the fines nor will they be able to afford the much higher cost of health insurance — even after the federal subsidy.

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If the Republicans are serious about getting America’s fiscal house in order they are going to have to do a lot better than that.

During the election, I heard one Tea Party Republican candidate for the House say that we needed to get on top of all of the deficit spending and to do that we needed to reform the entitlement programs. But then he said hospitals and doctors are underpaid and we need to be sure they get better reimbursements.

Democrats aren’t much better at confronting the entitlement problems. President Obama has been telling the American people that the health care bill they passed in March — the Patient Protection and Affordable Care Act — will make health insurance affordable. Heck, it’s in the title of the bill. He’s also been saying that the new law actually reduces the deficit.

It is true the Congressional Budget OfficeÌýdoes estimate the new health care law will cover about 30 million more people and reduce the deficit by $138 billion over ten years. Of course to reach these numbers the bill uses plenty of budget gimmicks like front-end loading revenue and back-end loading benefits, ignoring the $300 billion physician fee crisis and raising taxes by $500 billion.

But, accepting the claim that the bill does reduce the deficit by $138 billion, we also need to remember that the same CBO report predicts we will add $12.7 trillion to the deficit over the next ten years — a big chunk of it because of the health care entitlement costs that are out-of-control. To put this into perspective, without the $138 billion reduction in the deficit because of the health care bill, the CBO would have projected a $12.838 trillion increase in the deficit!

So both sides aren’t exactly facing our nation’s biggest fiscal problems in an honest way.

The Democrats refuse to admit their new health care law is not the kind of health care reform that would have at least begun to fix the entitlement problem.

Republicans haven’t done more than go negative on the new health care law and haven’t put up any real proposals for how they would deal with this conundrum. Their favorite campaign sound bite was to call for selling insurance across state lines. Just which state’s health insurance policies are affordable and would make health insurance affordable if they were sold in the rest of the states?

The health care entitlements, the old ones and the new one, simply swamp the federal budget. Take a look at the chart below. It comes from the same CBO report that affirms President Obama’s claim that the new health care law actually reduces the deficit by $138 billion.

There are a couple of thing to note about the CBO’s long-range federal budget projections:

— While Social Security is a challenge, it’s a pretty modest a challenge when compared to the health care entitlements.

— If the Democrats had really done health care reform this year, the trend line for the cost of the health care entitlements would not be continuing its startling upward trend.

— All of the rest of federal spending, including for defense, is a fairly small part of America’s deficit and debt challenges. Big cuts there hardly matter if you aren’t going to tackle the health care entitlements.

Don’t “scare” seniors? I’ve read the reports and I’m scared. What we just saw occur was “health care reform?” Hardly.

We need more proposals like those being made by the President’s deficit reduction commission, and the Medicare reform proposal authored by Republican House members Paul Ryan of Wisconsin, Eric Cantor of Virginia and Kevin McCarthy of California. Irrespective of whether they are the best proposals, their authors started from a place where they told the truth.

More than scaring seniors, or anyone else, both Democrats and Republicans need to treat the American people like adults and be honest about just how critical a problem we have with health care spending. If both sides could do that first, then it would make it a lot easier to have a real conversation about the trade-offs we will, someday, inevitably have no choice but to make.

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Many Americans are either left-brain liberals or right-brain conservatives, with the remainder somewhere in the middle. These left- and right-brain types look at the same facts but come to different conclusions-no matter what.

This past election, something unique occurred. The independents were so frustrated with the Republicans about the Iraq war, the financial meltdown and the spendthrift ways of Congress that they swept liberals into power and apparently gave them a mandate to pass health care reform.

The liberals set about doing just that. No false advertising was involved-they crafted health care bills consistent with their campaign promises. But when conservatives erupted over the legislation last summer, they reminded many of those independent voters about their more-moderate political instincts.

It turns out that liberals needed the backing of a handful of moderate Republicans — not because they needed their votes, but because they needed their endorsements.

By August, when the raucous town meetings occurred, it became clear that liberals had overplayed their hand on health care. After election defeats in Virginia, New Jersey and, most notably, Massachusetts, as well as months of months of sagging opinion polls, Democrats tried to adjust.

There was one problem: The more that the Democratic leadership pulled the health plan toward the center, the worse it looked to everyone-liberals, conservatives and independents.

That was the backdrop as Democrats and Republicans arrived at Blair House Thursday for the health care summit – a meeting that was not so much an attempt at bipartisanship as an effort to create political cover for wavering Democratic moderates in the House and Senate.

The thinking was that if the president and the Democratic leadership managed to show that their plan was better than the comparatively thin Republican approach – and as a result win points in the public opinion polls — the moderates would perhaps feel free to vote for the big Democratic bill.

But the White House summit ended in a draw.

The Democrats talked about the substance of the bill, but the Republicans knew that the latest polls favored “starting over” and aggressively repeated that message all day. They played to the anxiety of swing voters about a huge entitlement expansion in the face of the Great Recession, as well as skepticism about the Democrats’ trillion-dollar numbers.

Now, with the session behind them, Democratic leaders and the president apparently believe they can’t go backward and that tearing up their health care bill would be admitting they can’t govern with huge majorities. Also off the table is support from moderate Republicans.

The Democrats have two options.

The first is to ignore the recent state elections and the polls and ram their bill through Congress using controversial reconciliation rules. The problem: There are as many as 90 House Democrats who are vulnerable in the November elections, and at least half are moderate Democrats who weren’t ever enamored with health care proposals written by their more liberal leadership.

The second is “Plan B,” a scaled-down bill costing about a third of the big bill and far more modest in giving the government authority over the health care system. It could likely attract some Republican votes and give Democrats, particularly moderates, a legitimate claim that they listened to voters and acted in a more measured way. It also would give the president and the Democratic congressional leadership something positive to show at election time.

The Democrats will use the coming weeks to see if they can talk members of their own party into taking the Great Health Care Leap of 2010.

My sense is that they better have a Plan B ready to go.

After watching this debate, as well as the Clinton health care battle 15 years ago, my conclusion is that arrogant partisanship on big, consequential policy issues is a prescription for failure.

What a mess.

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But we will ultimately have real health care reform in this country for a very simple reason: We have no choice and both Democrats and Republicans understand that. More importantly, the American people know it.

If there is one common lesson in the collapse of the Democratic health care efforts in 1994 and 2010, it’s that something as big, complex and controversial as reform has to be done in a bipartisan way.

Was the recent debate hyperpartisan? Were the Democrats arrogant in thinking they could ram through their liberal health care agenda? Did lots of Republicans demagogue the Democratic efforts as soon as the debate clearly turned partisan? Isn’t it true the Republicans haven’t had a serious health plan of their own?

Yes to all of the above.

But if the Democrats and Republicans are serious about being bipartisan, there are opportunities. There are at least 10 Republican senators who have a track record of good faith on health care issues. They include the Senate Finance Committee Republicans who worked hard to get a deal last summer; Orrin Hatch, who co-wrote the children’s health plan; John McCain, who co-sponsored the patients’ bill of rights with Ted Kennedy, and the Republicans who support the Wyden-Bennett bill.

Can we achieve something bipartisan and modest in this election year? It isn’t likely but it is not impossible. True, the Republican base isn’t going to support any efforts to reach out to Democrats who are dangling on a political meat hook.

And liberals are going to have to swallow a lot of the hubris that is at the root of Democrats’ current political fix.

Republicans also need to understand that voter anger at the Democrats is not the same as support for Republicans. In 1994, Gingrich and his team had new and fresh ideas. In 2010, these Republicans are the guys we threw out in 2006 and 2008 — and they certainly haven’t offered any new and intriguing ideas lately to fix the health care system.

Both sides could benefit from behaving themselves and actually accomplishing something tangible. A few modest first steps could do a lot to begin to build some bipartisan trust — and actually help some Americans who need it.

Calls to deal with insurance reform — eliminating pre-existing conditions and medical underwriting limits — would not likely be part of these first steps. To make those changes, we would have to get both the sick and the healthy into the health insurance risk pool. And that means mandates and hundreds of billions of dollars in subsidies; those provisions aren’t possible without reconstructing the same big bills now on the table.

In fact, President Barack Obama and Congress have already taken some important steps on health care. They have, for example, expanded and extended the Children’s Health Insurance Program, and promoted Ìýhealth information technology and comparative effectiveness as part of the stimulus bill.

Now they should take some other good bipartisan steps:

Approve lesser health insurance reforms that are in the Democratic bills. Bar policy rescissions for immaterial and inadvertent consumer mistakes and provide federal funding for state-based high-risk pools serving the uninsured.

Create subsidies for small businesses to buy health insurance. The number of small businesses that provide coverage is melting in the face of the high cost of insurance. The small group market would be a good place to begin to spend subsidy dollars; it already has less- restrictive underwriting rules because it is generally a guaranteed- issue market. Most of the working uninsured don’t have coverage because their small employers can’t offer it. This would be a very efficient way of making progress toward covering people.

Expand Medicaid in a modest way. The House bill would expand Medicaid coverage to people with incomes up to 150 percent of the federal poverty level; the Senate bill, 133 percent. What can we afford now? From the existing state average of 65 percent of the poverty level, there might be enough money available to fully fund an expansion of Medicaid to 80 percent or 90 percent.

A huge bipartisan step would be to grant the Republicans some commonsense tort reform.

Would enacting this list constitute health care reform?

No.

But it could be the beginning of a process to rebuild bipartisan effectiveness, trust between the parties, voter confidence and actually help millions of people.

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You would be hard pressed to find any health policy expert who isn’t disappointed that cost containment has fallen off the health care “reform” express. In fact, it’s more commonplace to hear the term “budget-buster” when these bills are discussed.

Now, even many proponents of the bills are conceding there isn’t a lot of cost containment in them and beginning to argue that since the American people aren’t ready for real reform let’s just get on with passing what’s on the table.

But this rationalization misses something very important.

We already have high quality and lower cost health care being delivered around the country and people are not only supportive of it, they are flocking to it.

The Mayo and Cleveland clinics are touted as high quality and lower cost models for delivering health care services. Who wouldn’t want to be treated there?

work has consistently shown that there are high-cost high-growth regions and there are low-cost low-growth regions. The conclusion has been that if the highest cost regions operated more like the lower cost regions America’s health care costs could be sustainable.

Yet, I have detected no public rejection in those low-cost areas because people believe they are getting poor quality health care. In fact, the Dartmouth data would seem to demonstrate that the quality of health care being delivered in the lower cost areas is better than in the higher cost areas.

The primary objective for health care reform always should have been more value for lower cost. It still should.

There is plenty of evidence that higher value health care for a lower cost is actually happening around the country and, when given a choice, that it is actually what patients prefer. Would you turn down an appointment at Mayo?

So, what do you say we ditch the latest rationalization for passing a budget-busting health care bill and start over. Since most of the benefits in the House bill don’t begin until 2013, and 2014 for the Senate bill, what’s the rush? We have plenty of time to take this back to where it should have been in the first place- beginning the long and complex journey to create a health care system that pays for value.

This <a target="_blank" href="/news/112509laszewski/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">

Our health care system is truly titanic, in more than one sense of the word.

Not only is it huge, but it’s also growing at unsustainable rates that undermine our health care security and fiscal stability – and threaten to sink the system under its own weight.

When the health care debate began in earnest just after the November 2008 election, it was supposed to be about reform moving the nation toward universal coverage in a system that could be sustained in terms of costs. We could no longer “kick this can down the road.”

In the spring, it became clear there was neither the consensus on what to do about health costs or the political will to try to tackle them. That is when the health care reform effort shifted to a health insurance reform effort.

In one bit of good news, liberals have shown as much concern as conservatives about bringing costs under control, though their preferred solutions are obviously far different. Liberals pointed to the need for a robust public plan option, saying it was the key to cost containment.

But the House Democratic leadership ended up gutting the pubic option; now it’s hardly more muscular than the weakling co-ops in the Senate Finance Committee bill. As a result, neither fiscal conservatives nor liberals are left with much reason to believe the House-passed bill has much chance of bending any cost curves.

The House bill also fails to provide affordable health insurance to the middle class.

Under the legislation, an uninsured family of three earning $54,930 a year would be expected to pay $5,493 each year for their health insurance plan from the new insurance exchange-net of the government subsidies the bill would provide. A family making $73,240 a year would be expected to pay $8,789 for their health insurance. These costs are not affordable for these families.

If these families didn’t pay these premiums, they would be subject to fines equal to 2.5% of their income–$1,373 annually in the case of the family making $54,930.

The bizarre result is an incentive for families to skip buying coverage, and pay a fine that is only a small percentage of their premium costs. They’ll still be able to get insurance on demand from the exchanges should they have a big medical problem. That’s like being able to buy insurance on your house after it burns down. This kind of system will not make insurance costs lower.

Some supporters of the House bill say that, while the legislation doesn’t tackle health care costs, it’s still important to reduce the number of uninsured. Their reasoning goes: The pressure of adding 30 million more people to the system, coupled with the unsustainable cost trends, will eventually force Washington to deal with real health care reform.

That strikes me as about the same as rounding up lots more people to board the Titanic in the hope that it will sink even faster.

This <a target="_blank" href="/news/110909laszewski/">article</a&gt; first appeared on <a target="_blank" href="">KFF Health News</a> and is republished here under a <a target="_blank" href=" Commons Attribution-NonCommercial-NoDerivatives 4.0 International License</a>.<img src="/wp-content/uploads/sites/8/2023/04/kffhealthnews-icon.png?w=150&quot; style="width:1em;height:1em;margin-left:10px;">