Wednesday, January 19, 2011

Reform, Don't Repeal

Republicans are hot and heavy for repeal and this may be a political winner but it will have no impact on actual policy. Any repeal will not make it to the president's desk and if it did the president would surely veto such a measure. I think Republicans would be much better off spending their time and energy on making the health care reform bill better. If I were Speaker Boenher and Minority Leader McConnell my priorities would be the following:
1. Change the minimum benefit plan to allow for Real Insurance- presently the minimum benefit plan is quite generous and thus will be quite expensive. This will put many uninsured that are of modest means in a bind. Make the minimum qualified plan a naked HDHP with some low level of coinsurance after the deductible. First dollar coverage increases utilization and by extension causes medical price inflation.
2. Tax All Health Insurance Equally and Limit the Tax Subsidy- the Health Care Reform bill aims to do this beginning in 2018 on high cost plans ($27,500). This measure is too far out and too modest. Ideally the employer exclusion should be removed entirely and health insurance provided by an employer should be taxed as income. Alternatively, the value of the exclusion could be capped at the median health plan cost and not indexed while enabling those who buy healthcare on the individual market to purchase insurance with pre-tax dollars.
3. Get Employers Out of the Health Insurance Business- by taxing health insurance there will be less of an incentive for employers to provide insurance, but once they dump their coverage, where do their employees go? Presently the state based insurance exchanges will not be available to employees of large firms or firms that offer health coverage. Make the exchanges available to everyone. Now!
4. Get rid of CLASS- it is an unfunded entitlement that was used to game the CBO scoring process.
5. Pass the Brown-Wyden Waiver rule into law- Senators Scott Brown and Ron Wyden proposed that states could opt out of health care reform and use their medicaid dollars so long as they provided similarly comprehensive care. I think if a HDHP plan becomes qualifying care then this would be a sensible option.

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