| Today's Managing Health Care Costs Number is $3 trillion |
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| Source The Urban Institute has used its microsimulation model to estimate the impact of the BCRA on un-insurance rates. |
The Senate continues to work on the Better Care Reconciliation Act -- and some commentators think that the chances of this bill passing are receding. The bill remains a travesty - removing health care access from tens of millions, to fund tax cuts tilted strongly to the superrich. Some commentators have ideas about how to reform the Republican's health care reform.
Many of these ideas are well-meaning, but could worsen health care access and cost. Here's my critique of two proposals of how the Republicans should proceed.
Ross Douthat suggested that the Republicans "go small" and limit the health care bill to canceling the individual mandate and capping federal Medicaid expenditures. His proposal has four prongs
- Replace the individual mandate with a continuous coverage requirement, so that those who didn't purchase health insurance would be "locked out" during a waiting period. If they had a medical emergency during the lockout period, tough luck. Douthat points out this would cost only $38 billion in foregone federal revenue, but doesn't address the increased cost of insurance when the healthiest opt out.
- Repeal various taxes, and allow higher contributions to health care savings accounts. This would make the pharmaceutical industry, the health insurance industry, and the medical device industry happy. The HSA accounts tend to benefit the well-off disproportionately, but at least this prong doesn't impair the existing market
- Maintain stabilization funds provided to states to help provide coverage to the sickest patients - a genuinely good idea
- Fund all of the above by imposing limits on Federal Medicaid contribution. Since the need for Medicaid goes up with recessions, and almost every state has to balance its budget, this would mean there would be contraction rather than expansion of Medicaid during the next recession.
Peter Suderman thinks the Republicans should start from scratch - and put forward big, bold principles
- Stop saying that their goal is universal coverage (since their bills clearly move away from this anyway). I appreciate the intellectual honesty here.
- Support unified, rather than the current fragmented, health care finance system. In Suderman's formulation, the problem is a combination of the $250 billion annual tax break on employer sponsored health insurance and the existence of government funded systems like Medicare and Medicaid.
He doesn't say directly he would eliminate Medicare and Medicaid - but it's hard to see how moving to more private insurance would "unify" health care finance! He complains that Medicaid "sidelines" the poor in "a system that many doctors won’t participate in because of low reimbursement rates." Tell that to the parents of the 45% of babies in the US whose deliveries are paid for by Medicaid, or the 60+% of nursing home residents! We need lower reimbursement rates if we want to lower the overall cost of health care. The real fragmentation in health care finance is on the private, market-oriented side of health care. - Promote supply side reforms that lead to the availability of lower cost health care. He associates the huge increase in health care costs with Medicare - and advocates eliminating government rules and regulations that diminish innovation. He's right in one sense. We could increase health care affordability by eliminating rules which enforce "guild" systems where only a physician (or a nurse or a dentist) is allowed to perform a service that could be effectively provided by a lower cost professional or semi-professional often with the assistance of technology. But instead he advocates removing restrictions on doctor-owned hospitals - which clearly increase total costs.
Health care costs about $3 trillion in the US, and we should seek ideas from both sides of the aisle. But we should reject proposals that diminish coverage, or that would increase costs or drive the healthier out of the current insurance markets. The current system has many faults. But we can definitely make it worse.
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