Question: How did the ideas in “Healthcare for America” go from theory to policy?
Jacob Hacker: Well, it's been a bracing experience in some ways, because every academic dreams in their spare time, or at least a lot of academics dream in their spare time, that they're going to have a big influence on national policy debates. But I think our vision of what that would be like is sort of similar to our own experiences in the academic world, that somehow going into a Washington policy debate is like having a seminar where you're talking about your ideas and other people are respectively disagreeing or agreeing. It's been really exciting to be involved in the debate, but it's very tough. There is a lot of criticism of some of the ideas that I put out, and I feel enormously gratified that I've had influence. At the same time, I've definitely learned that being involved in big policy debates is not for the faint of heart. I think the main thing is that I got involved in this debate because I feel as if the system we have today is failing too many Americans and that we have to act to reform American healthcare. It was clear that we weren't going to be doing something on either of the ideological poles.
We weren't going to move toward some radical free-market solution that had everyone getting tax breaks—tax credits to buy healthcare insurance outside of employment. And on the other hand, we weren't going to move towards a universal single payer system where the government was insuring everyone. We really had to work within the confines of the system we have, but building on the existing system is not easy and in particular there is a really big problem at the heart of our existing system that most of the reform ideas that were on the table when I started getting involved in this debate weren't addressing.
That is, private insurance companies simply do not have an interest in containing cost and providing health security. They are in the business of making money and paying for healthcare. Many insurance companies are also in this business because they want to keep shareholder values up and earn profits. To me, it was the need to have some kind of counterweight to the private insurance companies even as we built on the present system that led me to argue for having a competing government public insurance plan that would be offering some discipline in the market, so that the private companies would feel the heat of having a strong competitor and would be pressed to improve their performance. Even though I understood that this public insurance plan would be just one part of the market, that private insurance plans would still have primary role. But the idea would be that they wouldn't have this kind of exclusive lock on the health security of Americans.
Question: Have your ideas about healthcare changed since “Healthcare for America”?
Jacob Hacker: So when I wrote Healthcare for America in 2007, I was building on a proposal I developed back in 2001 called Medicare Plus, and in that transformation from Medicare Plus to Healthcare for America was one of the journeys I took as I developed the idea. It became clear to me that although I wanted to make sure that people understood that we were building on the Medicare program and offering an alternative to private insurance plans, one of the reasons I emphasize in Healthcare for America that this was a separate program for Medicare—and I have in my work since then—was that I really wanted to argue, and I still argue, that this is just one component of a crucial set of reforms that needs to happen.
Those reforms have three basic elements. First, that you have shared risk. That people are in a common insurance pool, or they're in insurance plans that are regulated to make sure that they have protection against having unexpected medical costs and the insurance that's there when you actually need it most. That, unfortunately, is not always the case today. So the idea is that if you don't have coverage through your employer, you should be able to get coverage through some kind of new system—a “national insurance exchange,” it's sometimes called. And one of the choices you should have within that exchange, and I've always argued, is a public health insurance plan modeled after Medicare.
The other two elements are really important too, and we tend to lose sight of them in the debate because we've been talking so much about the public health insurance plan. As crucial as it is, there are also two other elements that we need to pay attention to. First, is we need to have shared responsibility. We have to have employers contributing to the system. That means that if they're not providing health insurance directly to their employees, they need to help pay for the cost of that coverage. I'm afraid that there is movement away from that in some of the existing bills on Capitol Hill. The House legislation that was just passed has a strong element of shared responsibility, but the Senate Finance Committee bill that was considered and passed through the committee earlier this year doesn't and needs to have that change made before Senate passes a bill.
The third element is individual responsibility. I always have argued that there should be a requirement on individuals to have coverage if, and this is a really crucial if, if there are affordable insurance options available. And one of the most interesting things, and I don't think I recognized this before, is the degree to which that individual requirement and the public health insurance option go hand-and-hand politically. When you ask people would you agree to be required to have health insurance. Americans are pretty weary about only about 40 percent of Americans are supportive of an individual mandate in surveys. But then if you say, "Look, people who are required to have health insurance will have the choice of a new public health insurance plan that will make sure they have affordable options." Then people are much more supportive of that individual requirement.
So to me that's an element that I just didn't recognize when I was developing this proposal, is how interwoven those three big aspects of my reform proposal are: shared risk, shared responsibility, and individual responsibility.
Recorded on November 9, 2009
Interviewed by Austin Allen