That's the analysis of the situation by New York Times columnist Ross Douthat, who in a column published in the Star Tribune, does a good job of giving an overview of the situation. He says:
Three major problems plague American health care. The cost of premiums is eating up an ever larger share of take-home pay. The cost of our public health care programs is eating up an ever larger share of the federal budget. And millions of people who need insurance are priced out of the market.
Now that Max Baucus’s version of health care legislation has been blessed, at least provisionally, by the hands of Senator Olympia Snowe of Maine, it’s increasingly likely that Congress will pass reforms that address the third problem, while making the first two problems somewhat worse.
What will the Baucus type bill do?
He points out what the reform won't do.
If a Baucus-esque bill passes into law, we should expect a significant decline in the number of Americans without health insurance. But for Americans who have employer-based insurance — still the lion’s share of the working-age population — premiums could climb more swiftly than ever.
That’s exactly what’s happened under Massachusetts’s recent reform, the best state-level parallel to what Congress is attempting. The Baucus bill includes measures that might partially counteract this trend — delivery system reforms, for instance, and an excise tax on the highest-premium plans. But their effects are speculative; the Bay State’s swiftly rising premiums are facts on the ground.
Meanwhile, our long-term fiscal trajectory will remain as unsustainable as ever. Baucus’s legislation is revenue-neutral only under rosy political assumptions, and it adds another entitlement to an already-groaning system.
But any lawmakers voting “yes” should have no illusions about what they’re voting for. This version of reform probably won’t make health care more affordable for most Americans, or place the system on firmer footing for the long run. Despite all the talk about a once-in-a-generation opportunity, our political class will have barely finished congratulating itself before rising costs will force everyone back to the negotiating table to consider more radical approaches.He also touches what many view as the liberals endgame and how a public option moves us closer to -- federal government takeover of health care through a single payer plan.
We know what one such approach would look like. It’s the eventual endgame that liberals pushing a “public option” are aiming for: a federal takeover of the health-insurance sector, paid for by rising tax rates, in which the government guarantees universal access while using its monopoly power to hold down costs.
Douthat has an alternative which he thinks will address the concerns of both those on the right and the left.
I don't think his suggestion won't gain much support from President Obama and Democrat leaders in Congress who see this as their opportunity to push through what they want.
But there’s another path, equally radical, that’s more in keeping with the traditional American approach to government, taxation and free enterprise. This approach would give up on the costly goal of insuring everyone for everything, forever. Instead, it would seek to insure Americans only against costs that exceed a certain percentage of their income, while expecting them to pay for everyday medical expenditures out of their own pockets.
Such a system would provide universal catastrophic health insurance, in other words, while creating a free market for non-catastrophic care. In the process, it would marry a central conservative insight — that we’ll never control spending so long as Americans are insulated from the true price of their medical care — to the admirable liberal premise that nobody should go bankrupt paying for life-saving treatment.
The details would vary depending on your political predilections. Under the more free-market approach, championed by Harvard’s Martin Feldstein, the government would provide vouchers for the purchase of private catastrophic plans. Under a more liberal version, like the one sketched out by Berkeley’s Brad DeLong, the government itself would act as the insurer. And liberals and conservatives would no doubt disagree about where to set the income threshold, and what additional interventions to support.