Josh Marshall, the editor of the center-left muckraking site Talking Points Memo, has posted a very astute email from a reader on the likely political impact of a successful Democratic health reform.

In political terms, such a bill would be a tremendous boost for the Democratic Party. It would leave the present system intact in most of its essentials, thus assuaging the fears of the vast bulk of the electorate. One substantial group of voters – those for whom the subsidies render health insurance more affordable – would be fairly pleased. A smaller group, mandated to buy coverage it can scarcely afford, would be discontent, but mostly because the Republicans had thwarted Democratic efforts to help it – and, in cold political terms, this isn’t a constituency likely to defect. And the public at large would see that Obama had promised health care reform, and then delivered it, with few painful trade-offs or compromises. A fairly clear-cut political victory. No, the problem is that such an arrangement would deliver a political victory, but fail to achieve most major policy goals. It wouldn’t do much to rein in costs, to improve the quality of care, or to provide a greater sense of security. It’s politically feasible, and a political triumph, precisely because of its modest aims and feeble provisions. It wouldn’t do much, but it would do something. Most importantly of all, it would firmly establish the provision of universal healthcare as a federal problem. I’d like to see a better package emerge from this debate. But let’s not mistake the ultimate goal, nor the magnitude of the potential victory. Today, paying for health care is a problem for individuals. The day any of the proposed bills passes, it becomes a policy problem for the federal government.

Unsurprisingly, the reader believes that this is a very good thing.

The policy wonk in me wants to get this right, because the costs of half-way measures are crippling. But the political handicapper in me is whispering that a half-way measure will actually be better than an honest bill come the midterms. It’s a depressing thought, but with a silver lining.

It should be obvious why conservatives might object. As a result, I’m very torn: it seems inevitable that the Democrats in Congress will pass something, and I think it’s at least possible that Republicans can substantially improve the final legislation. Yet there’s also a serious case for disavowing any involvement with the reform proposals.

The Peter G. Peterson Foundation has just released a new report on the long-term costs of H.R. 3200 that is well worth reading. The basic conclusion of the report is that while the new revenue measures would basically pay for the proposal over the first decade, costs start to dramatically outstrip revenue in the second decade. Granted, it is impossible to make reasonable estimates over such long time horizons, and we have to assume that we’d see reforms of health reform in the years that follow passage. Two bullet points leapt out at me:

  • Overall, employer health spending would increase by an average of $305 per worker. Employers that currently offer insurance would see an increase in health spending of $123 per worker, while employers that do not now offer coverage would see an increase in health spending by an average of about $813 per worker. (However, most economists believe that employers would eventually offset the increased costs through slower wage growth. As a result, families and individuals would ultimately bear the increases in costs, which is reflected in the bullet above.) Small businesses currently providing insurance would save up to an average of $811 per worker due to a tax credit.
  • The number of people covered in employer-sponsored plans (outside of the health insurance exchanges) would fall by 11 million, and overall enrollment in private plans would decline by about 900,000.

Trading off some disposable income for a lower level of risk might be the right decision; but I worry that we’re not acknowledging that there is a tradeoff. And while the decrease in the number of people covered in employer-sponsored coverage might be inevitable — this would be true under the status quo — it helps underline why so many voters have expressed deep doubts about the feasibility of Obama’s health reform effort.

Which is why tonight’s speech is important. My hope is that the president will level with the public and acknowledge that his effort will involve tradeoffs. I’m a little skeptical.