Solved! It covers everyone. It cuts costs. It can get through Congress. Why Universal Healthcare Vouchers is the next big idea.

• Author: Emanuel, Ezekiel

Some day, historians will look back in amazement on the present moment in Washington. How, they will wonder, did a president and his party manage to invest so much of the nation's attention and resources on "reforming" a program, Social Security, which was not in crisis and would not be for decades (if then), while ignoring a larger, much more pressing problem: fixing our inefficient and inequitable health-care system?

You've heard the statistics. Health-care costs are rising at three times the rate of inflation, and have been for the past five years. CEOs of major corporations are screaming that these costs are creating major problems for U.S. corporations and their workers. Employers are raising employee's copays, trimming other benefits, or cutting off health insurance altogether. Wages are stagnant or falling, especially for less skilled workers because the hike in health-insurance premiums eats up a larger share of the total compensation. As a result, the ranks of the uninsured are growing--by 100,000 Americans each month. Some companies, like Wal-Mart, are said to encourage their lower-wage workers to sign up for Medicaid, the government health program for the poor, jointly administered by the federal government and the states; California alone spends nearly $32 million in tax dollars to pay for the health care of Wal-Mart employees. Not surprisingly, Medicaid's budgets are soaring, with governors slashing benefits and dropping hundreds of thousands from the rolls, further adding to the ranks of the uninsured. Meanwhile, Medicare is shaping up to be a tidal wave of red ink. By 2008, the country will spend more insuring retirees than on defense. By 2020, Medicare will gobble up 5 percent of the GDP.

Someday soon, probably in the next few years, this growing problem will reach such proportions that Washington won't be able to ignore it. And that could be where the real trouble starts, for the GOP leadership has already signaled how they're likely to respond: with "reforms" that, like the Republican Social Security reforms, promise to make the situation for many Americans worse, not better.

After years of denying there were problems with the American health-care system, leading Republicans now agree that the problems are so severe that a piecemeal approach can't work. House Ways and Means Chairman Bill Thomas (R-Calif.) and Senate Republican Leader (and presidential aspirant) Bill Frist (R-Tenn.) have each called for "a comprehensive game plan" to replace the current, employer-provided health-care system. What they propose in its place, however, is a system that puts a greater share of health-care costs onto the backs of individuals, who would pay for care with a tax-free "health savings account." The proposal would do little to extend coverage to more Americans and would leave sicker Americans with little help.

Scarred by the political rout that followed the Clinton health-care reform effort, most Democrats have been reluctant to offer more than incremental reforms. Many of those who still believe in comprehensive change remain enamored with a Canadian-style government-administered, single-payer system. Both of these positions no longer make sense. The exploding costs of health care and the lack of any immediate cost-cutting alternative have created a political environment that is far more open to reform than it was in 1994. Yet single-payer is no more politically feasible today than it was when President Clinton rejected it as a model for reform. Sure, a compelling case can be made that the Canadian or French system serves those countries' citizens better than the American system does ours. But an equally compelling case can be made that we'd be better off with an extra dollar-per-gallon tax on gasoline. These are, in the end, liberal sugarplum visions. If progressives want to use this moment to achieve universal health care, they will need to put forward a proposal that makes the most of what's good about the current system and reflects America's basic values.

What would such a system look like? To begin with, any comprehensive health-care reform should meet seven elemental tests.

First, it should cover every American, no exceptions.

Second, it should pay for covering those who are currently uninsured by cutting waste, not by increasing the total amount our country spends on health care.

Third, it should hold down the rate of increase of future health-care costs.

Fourth, it should give Americans more choice of health plans, not less.

Fifth, it should make our economy more productive, not less.

Sixth, it should reduce, not expand, government bureaucracy.

Finally, to get anywhere, a comprehensive reform plan must be politically viable by offering advantages to more (and more powerful) interest groups than those it upsets, while cohering with American values so that it can draw a broad base of support.

This vision is not a wonky figment of the imagination. It is possible to recast our health-care system in a way that is fair, progressive, efficient, and realistic. We have designed such a system, which we call Universal Healthcare Vouchers (UHVs). As the name implies, our plan achieves goals long sought by both sides of the political divide: the progressive dream of universal coverage and the conservative values of free choice and efficiency. Most importantly, it puts the brakes on the ruinous increases in the cost of health care that threaten to engulf our economy.

AUHV manual

Here's how it works.

Every household in America will receive a voucher entitling its members to enroll in a private health plan of their choice. All plans will be required by law to guarantee the basic features of what most Americans now receive from their insurers: doctors' visits, hospitalization, pharmaceuticals, and catastrophic coverage. These insurance policies will not cover everything. Viagra and...