The latest Republican attempt to repeal and replace the ACA looks a lot like what they were trying to do in May, June and July—and failed to do.
But actually, the framing of the current effort—the Graham-Cassidy bill—is much more deeply grounded in the perennial debate over where political power resides in the U.S.: the federal government or the states. Graham-Cassidy also more starkly reflects what many conservatives are trying to achieve in health care policy. And what they are trying to achieve is, to put it euphemistically, not nice.
On both counts, this renewed debate resonates politically beyond health care. It’s no coincidence that the two Senators behind this new push, Lindsey Graham and Bill Cassidy, are from southern states—South Carolina and Louisiana, respectively. Before the Civil War, during the Civil War, and up to the present day, southern conservatives like Graham and Cassidy—more passionately than their northern counterparts—have pushed to devolve power to the states and weaken the federal government.
Conservatives are in a full court press these days telling us the answer to America’s out-of-control health care costs—and our fiscal crisis—is to move Medicare, Medicaid, and the tax code subsidy for private insurance to a defined contribution system.
Instead of the federal government defining a benefit and then shouldering the cost of whatever that promise leads to (today’s defined benefit plan), many conservatives are suggesting that we gradually move to a system where the government only promises an annual payment (or tax credit) for health care in the form of a voucher and then the consumer uses it (arguably more efficiently) to buy one of many health plans competing for their business.
First, let me tell you that I think defined contribution health care is generally a good idea. For too long the federal tax system and Medicare policy has subsidized careless health care spending.
Many worry that defined contribution health care would lead to poor people getting second-class health care because they would not be able to afford more than the voucher allows them. That is a legitimate concern and while that outcome can be tempered it cannot likely be eliminated. But that also occurs today, as many seniors have nothing more than a combination of Medicare and Medicaid while the wealthier can afford much better supplemental insurance. And, it will occur in the future under the Affordability Act because the new federal health care subsidies are based on the more limited plans available.
But I will also tell you that it is naïve to think the way to control health care costs is to simply move to a more market-oriented defined health care system.Continue reading…