THCB

A Health Care Setup Both Sides Could Live With

Before long the Supreme Court is expected to rule on the health care reform law, a decision that will have tremendous policy ramifications and could reshape the presidential election.

But even if the court overturns the Affordable Care Act, as some observers predict, that won’t change the reality that our country’s health care system is seriously broken. In short, regardless of what the court says, people will still be getting sick, costs will keep rising and too many people will be uninsured. And our federal budget will never be sustainable if we can’t bring health care costs under control.

The Democratic Party and progressives invested a huge amount of political capital in getting Congress to pass the ACA in 2010. The act was not perfect, but it did provide a start to the many years of work needed to create a sustainable health care system. In speeches, Republicans and conservatives acknowledge that our health care system is unsustainable and have spoken of a need to “replace”; however, in the two years since the ACA passed, they have failed to be clear about what they actually favor.

As we look to what we’re actually going to do about the problem, what’s clear is that progressives and conservatives both need to move beyond their familiar positions to find a new kind of deal. This seems politically impossible before November, but politicians on both sides would do themselves – and the country – a big favor if they quietly started devising a solution that everyone can live with, even if neither side gets everything it wants.

For progressives, universal coverage has always been the Holy Grail and dream deferred, not just of health policy, but of all social policy. I don’t think conservatives have a health policy interest that is so clear and heartfelt as universal coverage is for progressives, but if I had to take a stab, I think it is their belief that people don’t have enough “skin in the game” and are therefore wasteful of other people’s money.

Each side holds its view with near religious fervor and thinks the other side’s position makes little sense.

Accepting such differences is vitally important, because reaching a deal will mean abiding with one another to reach a compromise. Once that is accomplished, the key first step of the deal (reform will require many steps) should do the following: Provide universal coverage for catastrophic health care costs that could truly wipe out a family, like suffering cancer or being in a car crash, but make the deductible so high – perhaps $10,000 for an individual and $15,000 for a family – it would protect against people taking financial advantage of the system.

It would be implemented through Medicare, a large risk pool that could keep the per-person cost of such coverage as low as possible. People could then purchase private insurance to cover the large deductible (no mandate), or employers could provide such gap insurance.

Recently, I was in a convenience store, and there was a jar on the counter seeking donations toward the $250,000 hospital bill of a young man injured in an accident. Under my proposal, you could still have such a jar, but the maximum amount it would be seeking would be $10,000.

Both sides are likely to respond to this idea with “yeah, buts”; still, it’s an approach that would give everyone the core of what they want.

A health reform compromise like this begins, first and foremost, by acknowledging and accommodating the “big idea” for both sides. It’s the essential first step for everyone to move forward.

Will we be able to have this debate immediately after the court issues its ruling? Probably not. First we’ll need to endure days or weeks of predictable rhetoric from politicians with predictable positions.

But the day after the ruling, and the day after that, people will still be getting sick and our system will still be broken. We ought to be thinking now about how we might actually start to fix the problem in a way both sides might live with after the November election.

Donald H. Taylor Jr. is associate professor of public policy at Duke University and author of “Balancing the Budget is a Progressive Priority,” published last month. He blogs at donaldhtaylorjr.com and www.samefacts.com, and you can follow him on twitter @donaldhtaylorjr. This post first appeared at the News and Observer.

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5 replies »

  1. A person essentially help to make seriously articles I’d state. This is the very first time I frequented your website page and to this point? I amazed with the analysis you made to create this actual submit extraordinary. Magnificent job!

  2. The time for compromise was back in 2008 – as Ms. Clinton, President Obama and Sen. McCain were all still running for president. All three were in the senate. They could have cut a bipartisan deal – and who would have stood in their way as they ran for present and leadership in their respective parties?

    Anyway, the variant of this that I suggested to each of those campaigns (hand delivered to staffers) in 2008 never got 10 seconds of consideration because each candidate had their own idea.

    Here it is in a nutshell:

    1. Borrowing from former Senate Leader Bill Frist (R-TN), John Kerry (D-MA) and Jack Reed (D-RI), introduce a catastrophic reinsurance program, perhaps with an attachment point of $50,000 per person, per year, which would be extended to all Americans, regardless of age and other coverage. The reinsurance would use Medicare reimbursement rates (including DRGs, RBRVS and balance billing limits), and would be privately administered – as is Medicare Part A, B and D today. Physicians and hospitals and other service providers would not be able to drop the patient just because they hit the reinsurance program with the limits on reimbursements.
    2. There would be an individual mandate – structured as a tax where the individual would receive credit for periods where they had coverage that had cost sharing no greater than the HSA-qualifying HDHP under IRC 223, with a maximum benefit of $50,000 individual (to integrate with step #1). That would be a plan with an individual deductible of no more than $6,050, followed by 100% coverage up to $50,000. Without this baseline coverage, the individual would also be taxed to fund their reinsurance costs. Of course, we would income-adjust the tax so as to exclude those eligible for Medicaid, and perhaps reduce the tax for those at income levels modestly above Medicaid thresholds (400% of FPL anyone)?
    3. There would be no employer mandate. However, employer plans would retain their tax preference only if they paid the full cost of the reinsurance coverage in step #1 for their employees. Obviously workers would prefer to source coverage through their employer – where worker and employer costs are tax preferred. Again, that would be dramatically less than the exposure employers have today, or the reinsurance costs they are already paying.

    You would start in perhaps Tennessee where there is already a version of mini-med brought to us by Governor Bredesen (CoverTN). Or, perhaps pick a state that would like to create a competitive advantage for employers (through access to the low cost reinsurance) – maybe my state of Ohio.

    I have a more detailed summary, but, you get the picture.

  3. Our “healthcare system” is not seriously dysfunctional. The agenda of those who would provide “coverage”, (not “care”) for all, requires more money and more control over people than presently exists. There is no need for either, hence your difficulty.

  4. As long as people are allowed to smoke, not watch what they eat or drink, and engage in what are just stupid and reckless behaviors like riding without seatbelts, cycles without helmets, or being weekend athletes without any regard to limits per age, why are we willing to pay for such poor choices?

    choice does not abdicate responsibility nor accountability. How many morons want to defend this is just reinforcing why we have too many stupid and reckless people in our culture who redefine the word “handout” to epic proportions!

  5. I’ve been championing this one for years but have never seen someone run with it – thank you. I’d like to know what it might actually cost the country or how realistic it would be to get both sides on board. To me it is the best of both worlds. On one hand it protects all from the devastation of an accident or terminal illness, yet very much keeps everyone with ‘skin in the game’ so as to encourage responsible use of health care resources and management of one’s own health.

    I know there must be downsides – having a single payer for everything over $10k is surely one of them. Would love to hear some health debate below.

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