Sebastian Mallaby’s column in today’s Washington Post is interesting more for the assumptions it proposes than for its specific content regarding President Bush’s looming marketing push for Health Savings Accounts. While mocking President Bush’s term “ownership society”, presumably because he prefers the “social contract” and all it entails, Mr. Mallaby declares these flaws:
A rerun of last year’s [Social Security] debate would show that health savings accounts are harder to defend than personal retirement ones. They are shockingly regressive: Furman’s study shows how a poor family might get a subsidy of $150 while a rich one might get more than $4,000. They have not just a transition cost but a real cost: The tax breaks could widen the deficit by at least $132 billion over 10 years and a lot more after that. And health savings accounts pose a more formidable threat to traditional corporate health plans than personal accounts posed to Social Security. Market forces are already dislodging company health plans; an extra shove could cause an avalanche.
The limited consumer discipline that would come from health savings accounts could not justify these disadvantages. But when you talk to administration officials, they express remarkably few doubts. They believed in the ownership society last year; they still believe in it this year. They believe in individual choice; they distrust collective programs. They don’t worry too much about the risks to the budget. Or to distributional justice. Or to existing safety nets.
Simple administration. Straightforward administration. The Clinton team would never have proposed such a clunker of a policy.
Three paragraphs and I lost count of the intellectual disasters. It’s feasible to argue that Health Savings Accounts aren’t the solution. I won’t argue that they’re perfect, only that something must be done. That doesn’t mean action for the sake of action, of course, which is what I think Mr. Mallaby is partially offering as the Bush Administration’s motive. Anything that fits the ownership society storyline, or something along those lines. To his credit, he challenges the logic of HSAs and offers a suggestion in return. I disagree, but that’s reasonable in such a change with unknown consequences. Unfortunately, his conclusion relies on the assumptions I marked in bold. In order:
- Income differences matter only in tax liability. Receiving benefits, if tied to income and the resulting spending differences, must be quantitatively equal or they’re unfair and regressive.
- Market forces are dislodging company health plans, violating the social contract. That’s Bad. The central planners know better, so we must halt that trend, not encourage it.
- Individual choice is bad. We’re all in this together, so everyone should pay the same (unless he’s poor) and receive the same benefits (unless he’s rich), because the collective nature of
governmenthealth care is important. - Liberals worry a lot about the budget. That’s why raising taxes to meet Dubya’s irresponsible budget is necessary.
- “Distributional justice” is important above all else. If you don’t have enough, however that’s defined, and however much you do to earn it, you should be given what must be taken from others. Progressive taxes are good. Progressive benefits are bad. Regressive benefits are good. Regressive taxes are bad. Lather, rinse, repeat.
- Existing safety nets are good. Reform must keep those. Remember, that’s why raising taxes is important. Cutting spending would destroy safety nets. Government is the best provider of safety nets.
- The Clinton team would never have proposed such a clunker of a policy. They would’ve introduced a better clunker. It’s important to focus on better, not clunker. That’s why we need national health care, not individual choice. Everyone will like one-size-fits-all coverage. It doesn’t matter if the rich get worse health care. It’s a fixed pie. You don’t want others to be without. Do you? You’re selfish.
I hope it’s clear that I disagree with Mr. Mallaby’s assumptions. In the future, I hope he’ll put his assumptions in the first three paragraphs instead of the last three so that I may decide whether or not to bother reading his suggestions before I read them. That way, I’ll avoid the socialistic noise and read whatever’s left.