With the Senate’s passage of its version of health care reform, I’d like to compare it against what I described earlier this year as my ideal reform. That reform included four elements:
- Community Rating
- Guaranteed Issue
- Ex Post Risk Adjustment
- An Individual Mandate (with Medicaid for a fee as the backup option)
I think the first two elements are well represented in the Senate bill, and, importantly, they apply to all health insurance plans. I have a personal preference for more latitude for insurers in charging different premiums to those of different ages, particularly in the individual market. I am just averse to any program that further takes from the young to give to the old, given how much we already do through existing old-age entitlement programs.
The ex post risk adjustment and reinsurance in the Senate bill seems to be quite extensive, but I wish they went beyond the individual and small group markets and included all health insurance plans.
On a related note, I am not a fan of the excise tax on so-called “Cadillac” health plans. I would need to be convinced that the reason why the premiums are so high is unrelated to the health characteristics of the insured group. What if the premiums are so high because the insured group is old or has large families? Simply including all plans in the ex post risk adjustment and reinsurance aspects of the bill is the right way to even out premium costs in the face of differences in the insured group. And if people want to spend more on their own health insurance, through high-quality services or (to my thinking) inefficiently low deductibles and co-pays, why stop them?
The individual mandate in the bill, summarized here by The New York Times, seems a bit weak to me. If you were determined to avoid having coverage, you now do have to pay a penalty in most cases, but those penalties are still well below what others would be paying for coverage. I think the individual mandate ought to be combined with Medicaid-for-all.
Specifically, I’d like to see everyone enrolled in Medicaid via the tax return as the default, unless they can prove that they had alternative coverage. They could then be charged an income-related premium for Medicaid on the tax return. I think this gets us to universal coverage more directly — there is no need to separately impose penalties for those who violate the individual mandate and no need to provide a complicated system of incentives for those of modest means to be able to afford coverage through traditional markets.
I don’t miss the public option or Medicare-for-a-fee. There is no evidence that the federal government can operate a public option without borrowing large sums of money from future taxpayers. So I see no reason, given what I’ve outlined above, to expand that model of coverage.