A quick health reform deal
October 31, 2013 15 Comments
So I am obsessed with looking for health reform deals, so here is a quick one that could provide Republicans with some political gains and help the ACA in policy terms which should be the biggest short, medium and long term policy goal for the Democrats which would pay political dividends as well. It could also get Republicans rolling on laying out and fixing specific problems with the ACA, saving them from having to “start over” after a repeal that is not likely to ever come…..and eventually the ACA could become the entire nation’s health reform law.
- For 2014, make some amount of the premium paid by individuals buying coverage in the exchanges who are above 400% of poverty (and thus get no tax credit) tax deductible. This will then give everyone with insurance some federal subsidy (Medicare and Medicaid directly, those with employer sponsored health insurance lots via the tax exclusion of the amount paid by an employer, those receiving exchange subsidies directly, based on their income, and then those buying who are above 400% of poverty getting some benefit from the deduction). Long run we need to reduce tax preferenced spending, so maybe the “pay for” could be bringing forward the cadillac tax or more directly capping the tax exclusion….and slowly turning down the very high tax subsidy of cadillac ESI and searching for the “goldilocks” level of subsidy at some point in the future. A slow “boil the frog a little at the time” approach is likely the only way out of what Paul Starr calls “the policy trap” of many liking their insurance and the subsidy they get, and what Ramesh Ponnuru is worrying about here.
- For 2015, replace the individual mandate with the auto-enroll provisions envisioned by Rep. Paul Ryan’s Patients’ Choice Act. Strong auto-enroll policies enacted while allowing an opt out (presumably with some consequences, correct Libertarians?) could actually pool risk better than the weak individual mandate we now have. We will also have to develop a default insurance option to make auto-enroll work.
Work with me people.