Tuesday, October 16, 2007

Committee for Economic Development (CED) to Release Its Health Plan This Week--The Questions to Ask Them

David Broder gave us a preview of the Committee for Economic Development's (CED) upcoming health care reform plan. With the likes of Alain Enthoven and "a high powered business group" involved, we all need to pay attention.

Key points the report will make according to David's column:
  • Business can no longer afford afford to pay for health care.
  • Five years ago the group laid out a strategy for business to curb health care costs and it hasn't worked.
  • "The U.S. employer-based health insurance system is failing."
  • "Band Aid" approaches from Gingrich's emphasis on high-tech computers to medical practices, to the emphasis on consumer-driven care, to "Medicare for All," won't work. [Amen to all of that.]
The report will call for a reinvigoration of the market based on a structure of individual health insurance purchasing that would include:
  • A regional purchasing exchange through which individuals would buy a policy from a number of competitors.
  • Each year there would be an open season free of pre-existing condition provisions and medical underwriting--and presumably a late-enrollment penalty.
  • The exchange would manage a risk adjustment system for the insurers so each would get a fair slice of the market--thereby eliminating the need for underwriting.
  • Every family would receive a fixed-dollar credit sufficient to pay for a basic, low cost health plan. They could pay for more benefits with after-tax dollars.
  • To pay for it, the current employer-based tax exemption would end (along with a requirement for employer-based insurance) and those savings, plus some form of other broad-based tax, would pay for the program.
These are all good ideas.

Republican presidential candidates have all pointed toward the reinvigoration of the individual health insurance market as a better alternative to the employer-based system. The problem with all of those proposals (see the candidate reviews in the topic column at right) is that they don't modernize the individual market so that age rating, pre-existing conditions, and medical underwriting are dealt with. It would appear this group has a way to get that done efficiently and the Republicans should pay attention to it.

When the proposal comes out, I suggest we pay attention to a number of things:
  • 1. The details of the regional exchanges. To work, the exchanges need to result in something that really gives everyone access--no matter their age or health status.
  • 2. Giving everyone the same low-cost policy concerns me a bit. Would the poor have the same health insurance policy as the rich and, while the rich could buy up, would a poor family be able to afford the same care?
  • 3. The funding. As I have posted many times, an individual mandate is not necessary if the cost of a program is affordable for consumers. Do they really accomplish affordability at first--and ten years later is the program still affordable.
  • 4. The big one I will be looking for is cost containment. To make the program affordable in future years, the group will need to "gore some political oxen." The only way I know of to stabilize costs is to pay the key players less than they would have gotten in future years. The Democratic and Republican presidential candidates all give lip service to this issue by just giving us a list of the same things that are mostly underway in the system now with insufficient effect.
The big question: How will this plan will be affordable ten years after it is launched?

I look forward to hearing more about this.
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