White House v. White House

The health-care contradictions multiply.

The left is staging a revolt over ObamaCare, at least for 48 or 72 hours, but more revealing is the way this revolt is scrambling the White House's case for a bill that everyone save Big Pharma and AARP now seems to hate. The ad hoc arguments its spokesmen use to put out one political fire invariably contradict those they're using to put out another, so allow us to adjudicate.
Among labor's complaints is a 40% excise tax on high-cost insurance plans, given that union-negotiated benefits are more generous than average. So Jason Furman, the deputy economic director, took to the White House blog on Wednesday to declare that this so-called Cadillac tax "will affect only a small portion of the very highest cost health plans—a total of 3% of premiums in 2013." He added that "The vast majority of health plans fall below the thresholds set in the Senate plan and would be completely unaffected by the provision."
But wait: White House budget director Peter Orszag has been emphasizing the excise tax as critically important in the cost-control stone soup that he's been trying to sell. He cited this in his response to one of our editorials on Monday, and as he put it earlier this month, "You're creating an incentive for plans for employers to design their plans in such a way that they're under that threshold. . . . You're creating an incentive to slow the growth rate in private health costs."
So a tax that applies to 3% of premiums is going to reshape the entire health-care market? These guys can't even get their blog posts straight.
Our view is that they're both wrong, as it were. The Cadillac tax is not indexed for inflation, so it will gradually snare ever-more workers as a revenue grab. But contrary to Mr. Orszag's assertions, it doesn't fundamentally change the structural incentives created by the U.S. subsidies for employer- and government-provided coverage that have sent health costs soaring.
Mr. Furman used to advocate policies that really would make a difference, by "helping consumers become more cost conscious about their health-care choices," as he put it in a 2007 Brookings paper. He estimated that increasing cost-sharing could lower total health spending from 13% to 30%.
The Administration went in a far more political direction, which is why the White House brain trust, which seems to have been placed in a blind trust, is finding it so hard to make a coherent case. But maybe the handful of Democratic Senators worried about ending their careers by voting for ObamaCare should embrace the contradiction: The best way to support "health-care reform" is by voting against it.