January 8, 2019


To Keep Medicare for All at Bay, Offer a Better Alternative (James C. Capretta, 1/07/19, RealClearPolicy)

But do opponents of government-run health care have a competing vision for improving the health system? Because, over the long run, it may not be enough just to be against government-run health care if the public perceives the alternative as inadequate, and, currently, there is widespread agreement that the status quo is inadequate. The provision of medical care remains far too costly. Waste is rampant. Administrative costs are high. The system is fragmented and uncoordinated, the paperwork is maddening, and the quality of care provided to patients is uneven. The persistence of these problems over many years is a major reason why the U.S. has been on a steady march toward greater government control of the health system, even without a full embrace of a nationalized plan. [...]

Market-driven health care requires different reforms. First, the tax preference for employer-provided health care needs to be limited, to give both employers and workers stronger incentives to seek out lower cost and higher value insurance and medical care. It is estimated that the current open-ended tax break increases the cost of employer coverage by 35 percent. The ACA's Cadillac tax is an imperfect answer to this problem, but it is better than nothing. Unfortunately, Republicans have been leading the effort to repeal the tax without replacing it with a better alternative. If the GOP is serious about a market-driven health system (and that's a big "if"), it must change course and embrace some version of a limit on the tax break for job-based coverage. That's the surest way to bring new cost discipline to the system, which will mean lower costs for patients.

A second critical change is transformation of Medicare into a premium support program. Beneficiaries would select their insurance coverage from competing plans, including the traditional, government-run fee-for-service option. Beneficiaries choosing more expensive options would pay for the higher premiums with their own money. Those selecting less costly options would keep 100 percent of the savings. This design would ensure the insurance plans would compete vigorously with each other to keep their premiums as low as possible. The Congressional Budget Office (CBO) has estimated that a certain specification of this reform would lower costs both for the Medicare program and for the beneficiaries.

Beyond these major adjustments, the role of Health Savings Accounts (HSAs) needs to be updated, to allow them to become more effective instruments of consumer-driven health care. Among other things, HSA enrollees should be allowed to use their accounts to pay for  primary care using a monthly fee model instead of fee-for-service. Further, there needs to be an effort to make the suppliers of common medical interventions compete with other on the prices they charge by allowing all HSA enrollees to pay posted prices for these services.

The important thing about a universal HSA/catastrophic regime is that it would return us to growing the Ownership Society and Anglospheric elections are won by Third Way parties.

Posted by at January 8, 2019 4:04 AM