A road map to healthcare reform

The economic stimulus package just passed by the House contains much to jump-start our economy in the next few years. And congressional moves to expand Medicare eligibility and healthcare for children (through SCHIP) are commendable. But these steps still leave largely unaddressed the most fundamental long-term threat to economic security that President Barack Obama vowed to tackle during the campaign: our crumbling framework of medical financing.

Now is the time to fix it. The window of opportunity for comprehensive action is open wider than at any time for decades. But without quick action, it will close, and America's businesses, workers, and families will continue to suffer at the hands of a healthcare nonsystem that costs far too much, leaves far too many at economic risk, and does far too little to improve our nation's health.

The task is monumental, but it is not insurmountable. In fact, our current economic crisis makes it not just more pressing, but also more possible. The task is more pressing because the problems in job-based health benefits will only grow worse as the recession deepens: Businesses will continue to drop coverage and shift costs onto workers, and more and more Americans will lose their homes and their life savings because they lack insurance or their insurance doesn't shield them against runaway health costs.

Reform is more possible because the hastened erosion of our system is galvanizing Americans and their leaders, and also because we must spend aggressively now to keep our economy afloat, reducing the roadblocks to the up-front investments needed to get to universal insurance. But the long history of past defeats should remind us that successful reform is never assured. A clear road map is needed to navigate the perilous political and policy terrain ahead, and it should contain four big signposts:

1. Use the budget. There is but one high-speed train that leaves the Capitol Hill station each year: the budget. The budget cannot be filibustered by an obstructionist Senate minority of 41. It is how George W. Bush obtained his massive tax cuts for the rich in 2001 and 2003. And it is how the foundation for reform must be laid in 2009. Not everything can be done in the budget, of course, but the key features of reform – new subsidies to help lower- and middle-income Americans obtain coverage, and changes in existing tax policies and health programs – can and should.

2. Move it or lose it. The history of major presidential initiatives shows that Obama cannot afford to wait until 2010, as some suggest, to achieve healthcare reform. To take advantage of his "honeymoon"-heightened influence and the public desire for change that emerged during the campaign, he should undertake the heavy lifting this year – the sooner, the better. President Clinton delayed releasing health legislation until late 1993, almost a year after entering office. His plan went down in flames for many reasons, but it didn't help that members of Congress had stopped worrying about the 1991 recession and started worrying about the 1994 midterm elections.

3. Make Congress own it. Mr. Clinton's other big political mistake was to craft his 1,342-page bill within the White House and executive agencies, rather than move quickly to spearhead congressional action. That left members of Congress free to grandstand and stall, and made Clinton's plan a huge bulls-eye for his conservative critics. Mr. Obama should not make the same mistake. He should supply the vision; Democrats in Congress should write the legislation.

4. Keep it simple. Finally, that vision should be simple and unthreatening. Clinton's plan had too many moving parts and too many red flags: regional purchasing cooperatives spread across the country, efforts to encourage people to enroll in tightly managed HMOs, caps on private premiums if they grew too fast. Obama resisted this temptation during the campaign, and he should resist it now.

The reforms that Obama called for during the campaign had three key elements: (1) lowering the cost of health insurance for workers who have it, so employers continue to provide good job-based benefits, (2) creating a new national insurance pool that allows those without such benefits to buy coverage as good as that received by members of Congress, and (3) the creation of a new public plan modeled after Medicare that would be offered within this pool to provide a secure guarantee of coverage for those who now lack it and to drive down costs while improving quality. Those are still the right elements, and Obama should push for them quickly.

The great unanswered question is whether a public disillusioned about politics can be brought to kindle some faith in their leaders and their government. Nearly two-thirds of Americans say they believe in government action to universalize health insurance, even if it means an increase in taxes. And most (85 percent in a Pew Research Center poll last month) say they want reform to be a "top" or "important" priority. Similar sentiments helped bring healthcare to the top of the agenda in the early 1990s, and reformers are on the verge of having their moment in the sun again. If they heed the lessons of the past, they have a real opportunity to finally seize the moment.

• Jacob S. Hacker is codirector of the Center for Health, Economic, and Family Security at the University of California, Berkeley, and a fellow at the New America Foundation. He recently edited "Health at Risk: America's Ailing Health System – and How to Heal It."