August 18, 2009

Trick Question

I know it's a little confusing. But here's the thing. There is no Administration proposal for health care reform. Instead, what we've got are a set of principles and ideas that the President floated -- first as a candidate and later in somewhat more detail about a month after he took office. From there, he sort of kicked off the ideas to Congress, and he has waited to see what has emerged. In fact, there are a myriad of different pending proposals and the Administration has been throwing its political support behind a particular constellation of different ideas.

As we see in the news yesterday and today, it appears to have lost the idea of a publicly-funded competitor to private insurance, which would seem to have been the centerpiece idea behind the more progressive models of health care reform.

So everyone who answered the poll here that they had read the Administration's proposal or a summary of it, um, you didn't. Here's what the Administration has to say for itself on health care reform. It's not that the smart people working in the White House haven't done a lot of writing and research -- it's that they haven't written any legislation themselves resulting from it. Rather, they've been articulating principles and ideas. Coming up with specifics has been something the President has left to Congress.

Don't feel bad. I was confused about this too. I talked it over with a friend who is as big a public policy and politics wonk as me. I didn't really believe him. I had to do some research of my own, and even then I couldn't quite believe that the President would be so short on specifics as to have no actual plan, no actual legislation, that he was backing.

Now, if you're really interested in the policy wonkery, there are plenty of resources out there. The best one I've seen so far has been from the Kaiser Family Foundation -- bearing in mind that Kaiser has a dog in this fight, there nevertheless appears to be a relatively neutral assessment of the various proposals.

Unsurprisingly, the less ambitious ones are the ones that seem to appeal to me the most, with my top priority being economic feasibility -- we are not undertaxed as a nation, and we cannot afford a net increase in the federal deficit. Looking at what KFF summarizes the proposals in terms of whether they make even a semblance of economic sense, there are three options out on the table that pass this threshold:

First, a proposal by Congressman Tom Price (R-GA), H.R. 3400, would keep insurance costs down through tort reform, cutting spending to hospitals that accept too many uninsured patients, and conjuring money out of thin air, um, I mean, eliminating fraud, waste, corruption, and abuse (something which apparently occured to absolutely no one before Congressman Price). I'm very skeptical that tort reform will do anything other than boost profits to insurance companies. Tort reform will not relieve the psychic distress doctors feel at the threat of malpractice suits, nor should it (in terms of economic incentives, if your doctor does not fear you suing him for malpractice, why should he render good care to you?); tort reform will not lower the typical doctor's malpractice insurance premiums and therefore will not reduce the bottom-line cost of health care; but, it will likely diminish the quality of the health care that is delivered. So this doesn't seem like much of a solution at all. Worse, no one in Congress seems to have taken much action on this beyond assigning it a bill number and referring it to committee.

Second, spearheaded by Congressman Paul Ryan (R-WI), a group of Republicans in both houses have jointly offered a proposal which looks like an attempt at actual reform: they would impose certain cost-containment provisions, convert certain Medicaid defined benefits to defined contributions (shifting a larger portion of the cost of rendering ER care under Medicaid to hospitals), and eliminate the tax exclusion for employer-sponsored insurance (which would increase employer costs as to taxes but not premiums), indexing qualified health insurance tax credits en bloc proportionate to other kinds of entitlement reform. Sounds good, but there is little chance that entitlement reform resulting in a net decrease in payouts will go anywhere in a heavily-Democratic Congress during a recession. I do have to hand it to these guys, though; they're willing to compromise their instincts to cut taxes and their desire push the deficit down in order to respond to a need to reform health care policy as a quality-of-life issue, which is a greater degree of intellectual and ideological flexibility than a lot of Republicans have shown recently. While it's DOA politically, Ryan's proposal at least represents something that seems like an intelligent Republican counter-proposal to the much more expensive Democratic ones being floated around out there.

About the only economically sensible idea out there with any chance at all of passage is the proposal by Senators Ron Wyden (D-OR) and Bob Bennett (R-UT). Wyden-Bennett, otherwise known as S. 391, gets its funding from allowing individual premiums to rise and increasing employer assessments. Like the Ryan proposal, more costs of emergent care would be shifted to individual hospitals, and cost controls would be imposed at both the state and federal levels for both Medicaid and Medicare. Effectively, this spreads the costs of health care reform to individual insurers (your premiums will go up), employers (who will get less of a tax benefit to providing health insurance to their employees and who will be subject to a mandated contribution to premiums) and individual hospitals (who will have to absorb higher costs on ER care for non-paying patients). All that sounds like it sucks, but why is it that Wyden-Bennett is the most promising of the various proposals?

First of all, there is no tax increase or increased deficit spending associated with it. Secondly, shifting the costs roughly parallels what the market would do on its own. Third, it would result in most Americans having at least minimal health coverage. Fourth, because it would require a new product to be offered by private insurers, it actually scales back that Medicare, Medicaid, and a few other programs pay for, enabling what is left over to stay viable for the indefinite future.

Now, this is not universal coverage -- it's wider-than-present coverage but only at a very minimal level. Nor is it free; there is cost-shifting going on and you, the health care consumer, will be required to have at least the minimal insurance coverage. But, you can also buy more coverage than the minimal plan if you wish and continue with your current set-up. Chances are, you'll be paying a little bit more. I think this makes the most sense of the proposals on the table, though, precisely because these changes are not dramatic. If you already have coverage through your employer that both you and your employer jointly pay for, you will likely not notice much of anything changing for you.

Wyden-Bennett is incremental reform. It represents an effort to work within the existing structure and nothing gets torn down. It is, in other words, realistic, the closest thing to affordable that's floating around in Congress at the moment, and politically salable. It's about the best thing going in this complex and unexciting arena.

Now, before you go and back Wyden-Bennett, or any other reform package, or before you say "no reform at all," read the lead article in this month's Atlantic. If you're afraid of "socialized medicine," well, I've got news for you -- our medical industry is already socialized to a very shocking degree. If you think there is a health care shortage, well, I've got news for you -- well, you're right, but the reason for the present level of scarcity will not be readily apparent to those looking to the government for a solution. Guaranteed you won't see it. And finally, in the debate over health care reform, we may want to take a step back and consider our semiotics: "health care" is not synonymous with health.Stumble Upon Toolbar

1 comment:

jjjulie said...

I referred to your linked Atlantic article on the RET discussion board. I enjoyed, thoroughly, the "trick" you played, unwittingly or not.