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Marketplace Morning Report
Commentary

Health reform bill is no New Deal

Marketplace Staff Mar 24, 2010
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TEXT OF COMMENTARY

Kai Ryssdal: President Obama goes back into health care campaign mode tomorrow. He’s going to make a trip out to Iowa to try to increase public support for the changes he signed into law yesterday.

Commentator Robert Reich was a strong supporter of the president’s attempt to overhaul the health care system. He just thinks we need to be realistic about what we got. And what we didn’t.


ROBERT REICH: Don’t believe anyone who tells you the president’s new health care legislation marks a swing of the pendulum back toward Great Society and New Deal programs like Medicare and Social Security.

The basic idea behind Medicare and Social Security was for government to be the insurer. Citizens make payments to the government, and government gives out benefits.

If the new legislation built on this idea, it would have made Medicare available to everyone, or at least provided a public insurance option.

But the guiding principle of the new health care legislation draws from a different philosophy. First championed by Republican presidents Dwight Eisenhower and Richard Nixon — government as regulator of a private insurance market.

Eisenhower took the first step in the 1950s by locking in the tax break for employer-provided health insurance. Nixon then pushed for a system of prepaid competing health plans, which ultimately became HMOs. Nixon also wanted to require all employers to cover their employees.

President Obama has implemented these ideas and taken them a step further by requiring all Americans to carry health insurance, and giving subsidies to those who need it.

This does mark a swing of the pendulum, but really only back to before the 1980s — when President Reagan asserted that government was the problem rather than the solution, and the nation embarked upon almost four decades of deregulation and privatization.

The American public still distrusts government, but in recent years it has also become wary of health insurers that seem more interested in making money than insuring good care, as well as giant Wall Street investment banks willing to risk the entire economy on their own lucrative bets, and mortgage lenders and credit-card companies that don’t always tell us what we need to know.

This week’s vote in Washington does not signal a return to the New Deal or the Great Society, but it does suggest an end to the opposite extreme: an era when we trusted that an unfettered market would always do what’s right.

RYSSDAL: Robert Reich teaches public policy at the University of California, Berkeley.

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