The Senate Finance Committee's bill, which will be quite close to the merged Senate bill, allows you to tell three credible stories on cost control that the House bill simply doesn't.
The first comes from the excise tax on high-cost health insurance plans. The idea here is simple enough: you're taxing any growth in health-care premiums that's faster than the rate of growth in GDP plus one percentage point, which is going to make people a lot less accepting of premium increases and unchecked growth. This is, in the simplest sense of the term, a cost control. In theory, it controls costs by taxing one of the drivers of cost growth into submission. It is, by far, the policy economists are most united on, and the one that works in the most straightforward and blunt way.
The second comes from the newly formed Medicare Commission, which is a lot stronger than people realize. The idea isn't simply that a panel of experts gets to dream up interesting reforms to try out in Medicare. It's that they are charged with making sure that Medicare hits certain growth targets, and their package of reforms has to achieve that goal. Those reforms are then sent to Congress, where Senate debate is limited to 30 hours, and amendments must be both budget neutral and "germane." This report, in other words, is exempt from the filibuster. So far as anything is ever easy to pass, this is easy to pass. If Congress cannot manage action even within this streamlined process, then it simply cannot cut health-care costs at all, and our federal government will go bankrupt.
The third is the delivery-system reforms. The House bill has these too, though they're a bit weaker. They key alchemy, however, is the interplay of the delivery-system reforms and the MedPAC commission. The Senate builds in a lot of pathways by which an idea that starts in Medicare through the commission and proves successful can be brought to pilot and then brought to scale across the health-care system. Medicare serves as the laboratory, but other institutions created in the bill serve as the factory.
All three of those stories make sense, and any of them, on their own, would represent the most significant effort at cost control in a generation, if not ever.
Tuesday, November 17, 2009
Cost-control: House vs. Senate
The House bill has been taking some criticism lately because it expands coverage without doing very much to cut costs. Ezra Klein explains the ways in which the Senate Finance Committee's bill compensates for that weakness:
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"The first comes from the excise tax on high-cost health insurance plans."
ReplyDeleteTo my friends on the left: would/should President Obama be willing to sign a bill that included this tax?
I ask only because when John McCain made the same proposal part of his campaign platform, Obama relentlessly attacked him for it. He called it "radical." He said it would be "the largest middle-class tax increase in history," despite other parts of McCain's plan that gave families refundable tax credits to help them purchase insurance.
All of this came over the objections of Jason Furman, his own campaign's economic policy director, who had previously advocated a policy that was almost identical to McCain's.
Since Obama was surely sincere in his concern for the middle class, and since he was surely not simply engaging in hypocritcal populist demagoguery to win votes, AND since it is unlikely that his stance has shifted so radically in such a short amount of time on such a major issue, should Congress be concerned about a veto if the final bill contains this tax?
B.
It's deja vu all over again. We've covered this ground before. I've already said - several times - that Obama was wrong to demagogue the health insurance tax proposed by McCain, just like he was wrong to demagogue Hillary's insurance mandate. A reasonable tax increase on expensive insurance plans has a place in health insurance reform; the big problem with McCain's plan, as I recall, was that, overall, the plan would not reduce costs and that the tax credits were not very generous. As I wrote at the time, if the tax increases were part of a larger, more progressive package, they would be much more politically palatable. Because this tax increase is part of such a reform package, Obama is highly unlikely to veto it on those grounds.
ReplyDeleteFinally, even though B likes to pretend that it is the case, his "liberal friends" have never claimed that Barack Obama walked on water or that he - as a candidate or as a politician - didn't engage in some dirty politicking. Meanwhile, he has rarely (if ever) acknowledged the lies and misrepresentations of Senator McCain and his running mate, Sarah Palin.
c.,
ReplyDeleteJust for the record, I put the Obama and McCain campaigns on approximately the same level in terms of "lies and misrepresentations." If I failed to point them out often enough, I apologize - perhaps it seemed like preaching to the choir given the liberal slant of the other posters here.
And while I'm at it, I wish to formally renounce my enthusiasm for Sarah Palin last fall. I do not think highly of her and never have. I tried to remain enthusiastic out of respect for Sen. McCain, who I think would have been a superb president.
B.