The Agenda

Ramesh Ponnuru on Rep. Paul Ryan’s New Health Reform Push

In an excellent column, Ramesh explains why now might be the right time for a reboot of the right’s health reform message:

“This is the 21st century,” Ryan tells me. “People do not have the same jobs for their entire careers. The tax benefit should be attached to the worker, not to the job.”

 

Senator John McCain, an Arizona Republican, made a similar proposal during the 2008 campaign, and the Obama campaign attacked it relentlessly as a new tax on employer-provided coverage. (Within two years, Obama had enacted his own new tax on employer-provided coverage as part of his health-care overhaul.) The McCain experience does not faze Ryan. “He did a very, very poor job of defending the idea,” he says. “This is not taking away a tax benefit, it is improving a tax benefit for people.” People making low incomes, he points out, would get a larger tax benefit under his proposal than they do now.

Asked to explain his colleagues’ reluctance to embrace this reform, Ryan says, “I think people are just politically risk averse. As you know, I am just more of a policy risk-taker.”

It may be that voters, too, are more risk averse than Ryan.

It’s hard not to appreciate the deadpan voice here. Ramesh has voiced concern about what he sometimes sees as Ryan’s political recklessness in the past, particularly with regards to his proposed Medicare overhaul, and it’s a fair point. Yet Ramesh also offers thoughts on how to avoid the political pitfalls of a one-fell-swoop reform of the tax treatment of health insurance:

 

If Ryan’s idea ever became subject to intense national debate, which it would before becoming law, the fear that it would disrupt people’s existing arrangements would come to the forefront.

This is not an insoluble problem, and indeed Ryan’s speech hints at the answer. “We need to transition,” he said, to a more “market-oriented” system. The transition should be handled gradually. We could replace the current open-ended tax break with a tax credit, as Ryan proposes. But for now, we could let only those people who don’t have access to employer coverage use their credit to buy insurance on their own.

And so Ramesh concludes that Ryan is on the right track. Read the column.