Here's my take on the Obama healthcare "downpayment"
1. I don't like tax increases. However capping the deductibility of health care expenses at some point does make sense. So does taxing benefits beyond a certain dollar value or income level (inflation adjusted). Obama got that half right.
2. Requiring HMOs to bid using the Medicare actuary's estimate was something President Bush proposed in 2003. Most people don't remember that. Now Obama is proposing the same thing in lieu of the bonus. Will seniors pay more or less? Will they be better off? Hard to predict.
3. No price controls on part D which rewards use of market forces and preventive technologies. Cuts to medical imaging and home health which will likely not stand or will be adjusted.
4. The administration proposes a bundled hospital payment that includes 30 days for post discharge care. Can we say DRG-based capitation? Nothing new here...just another reimbursement code to exploit.
The Obama team did as little as prescriptively possible to come up with $700 billion for universal health care. More -- about a trillion more (at least) will be needed and even then not everyone will be enrolled. And of course enrollment does not equal better health or outcomes. Where will the rest of the money come from? A tax on employers in lieu of providing coverage.
So for the most part the health care reforms are nothing new and the cost is very high. Still, the down payment does little to move us towards "government run" health care. If free market types want to come up with a way to provide people with a choice of health plans that eliminates penalties for pre-existing conditions and a range of insurance products that are affordable that does not involve government control over medical decisions, now is the time. It can't be HSAs alone, which are still a confusing and difficult benefit to provide. It has to protect people from financial catastrophe, reward healthy behavior, reward better outcomes, encourage more personal responsibility. And the proposal has to be bold and big.
Nothing else will compete or do.
1. I don't like tax increases. However capping the deductibility of health care expenses at some point does make sense. So does taxing benefits beyond a certain dollar value or income level (inflation adjusted). Obama got that half right.
2. Requiring HMOs to bid using the Medicare actuary's estimate was something President Bush proposed in 2003. Most people don't remember that. Now Obama is proposing the same thing in lieu of the bonus. Will seniors pay more or less? Will they be better off? Hard to predict.
3. No price controls on part D which rewards use of market forces and preventive technologies. Cuts to medical imaging and home health which will likely not stand or will be adjusted.
4. The administration proposes a bundled hospital payment that includes 30 days for post discharge care. Can we say DRG-based capitation? Nothing new here...just another reimbursement code to exploit.
The Obama team did as little as prescriptively possible to come up with $700 billion for universal health care. More -- about a trillion more (at least) will be needed and even then not everyone will be enrolled. And of course enrollment does not equal better health or outcomes. Where will the rest of the money come from? A tax on employers in lieu of providing coverage.
So for the most part the health care reforms are nothing new and the cost is very high. Still, the down payment does little to move us towards "government run" health care. If free market types want to come up with a way to provide people with a choice of health plans that eliminates penalties for pre-existing conditions and a range of insurance products that are affordable that does not involve government control over medical decisions, now is the time. It can't be HSAs alone, which are still a confusing and difficult benefit to provide. It has to protect people from financial catastrophe, reward healthy behavior, reward better outcomes, encourage more personal responsibility. And the proposal has to be bold and big.
Nothing else will compete or do.
