Avik Roy’s health reform proposal

Avik Roy released a health reform proposal today, published by the Manhattan Institute (full pdf). I am not going to go all post-modern literary critic on this (only deconstruct), in part because a lot of it lines up nicely with things I have been writing about/calling for over the past few years. For example, I called for replacing the individual mandate and federalizing the dual eligibles and buying low income persons into exchanges in December of 2010! (these are “cousins” of what Avik proposes). My more fully fleshed out “next step health reform” version came in my book in 2011. Again, it is not hard to imagine a deal between what Avik and I wrote.

Perhaps most importantly is the tone, that acknowledges that policy deals are available. However, politics have been standing in the way. 

As Avik puts it:

One of the fundamental flaws in the conservative approach to health care policy is that few—if any—Republican leaders have articulated a vision of what a market-oriented health care system would look like. Hence, Republican proposals on health reform have often been tactical and political—in opposition to whatever Democrats were pitching—instead of strategic and serious.

The biggest question facing Avik’s proposal is not in policy terms or what supporters of the ACA will think, but whether any elected Republicans will be willing and able to shift gears and begin trying to move health reform ahead instead of simply looking for what helps in the next election. My hope (and cautious expectation) is that the answer is yes, after the 2014 election.

Two things I especially want to encourage in reform discussions that overlap with what Avik has proposed and that I have previously proposed as part of a North Carolina-specific reform/waiver approach within the ACA (p. 6-7):

  • Imagine a Medicaid waiver in which the cost of the dual eligible beneficiaries (those covered by Medicare and Medicaid) are federalized to reduce the perverse incentives inherent with two payers of care; state cost savings could be used to expand insurance coverage

  • Pilot a premium support approach to the setting of premiums for Medicare advantage plans in North Carolina, two to three years after we begin a State-run insurance exchange with the Medicaid waiver/BHP expansion I suggest

There is lots of health policy to be banged out in those two points that I have suggested, but the need for LTC reform is a crucial issue that I have written much about. About the current political stalemate in which exchanges are the panacea in the Medicare program, and the worst thing ever in the ACA–and vice versa, is silly.  

I will have more detailed comments later, but I commend Avik for offering this plan, and think there is a plenty to like in the proposal itself, as we look for the next step in health reform.

About Don Taylor
Professor of Public Policy (with appointments in Business, Nursing, Community and Family Medicine, and the Duke Clinical Research Institute), and Chair of the Academic Council at Duke University https://academiccouncil.duke.edu/ . I am one of the founding faculty of the Margolis Center for Health Policy. My research focuses on improving care for persons who are dying, and I am co-PI of a CMMI award in Community Based Palliative Care. I teach both undergrads and grad students at Duke. On twitter @donaldhtaylorjr

10 Responses to Avik Roy’s health reform proposal

  1. wafranklin says:

    Manhattan Institute – like the put of hell in terms of what might pass for public policy. Why would you affiliate with these right wing libertarian morons, one of whom I know personally, and do not respect at all.

    • Don Taylor says:

      both sides need a deal. It is in progressives best interest for their to be a policy based Republican party, and I think this proposal could be a nudge that way on health reform.

  2. Aaron Mitchell says:

    Please correct me if this sounds off the mark…
    But having read (the executive summary of) Roy’s proposal and now your response to it, I find the hope I feel in the ability of serious thinkers on both sides of the ideological divide to come to some form of agreement on this issue, and also the frustration I feel with the INability of politcal actors on on both sides to do the same, both to be strengthened.

    Which makes me want to spend my career in the ivory tower. Which I’m not sure is a good thing!

    • Don Taylor says:

      I think elected Republicans are more to blame for the impasse than the Dems….the ACA was already many compromises. Rs have not shown any willingness to commit to details for anything as Avik says. I suspect that will change….it is true that in policy terms there are many deals available, and if we could get a political deal to take some of the heat out of everything we could muddle it through.

  3. Bob Hertz says:

    Two quick reactions to the Roy proposal:

    a. he keeps going back to state based exchanges. I suppose this is in part from ideological purity, i.e. the state’s rights dogma that has infected American conservatism for many years.

    What about the states which decide not to do anything about health care reform? Obama could not budge them, and I do not see how the Roy plan could budge them either.

    b. The Roy plan would have subsidies go down, but in a couple of places he states that the lower premiums from new health plans would make this bearable.

    Seems a little like a “magic asterisk” to me.

    Bob Hertz, The Health Care Crusade

    • Don Taylor says:

      I suspect he is more correct on the first….a great deal of the opposition (esp in the South) is specifically related to President Obama. The details of subsidies, etc will be an ongoing tension b/w cost to the federal govt (fiscal sustainability) and what subsidies can buy (political sustainability).

    • Most of his lower premium payments are being driven by vastly thinner benefits. His “Bronze” plan is 40% acturial value vs. current 60% AV, essential health benefits are eliminated (so no no-cost share preventative care, no need to cover maternity, no need to cover mental or behavioral health, no need to cover specialty drugs etc)

      Under Roy’s world, a policy at $22 a month that pays out $100/day for hospitalization would make someone count as covered. In today’s world, that is a wisp of an illusion of coverage. Sure, it is cheap, but it is cheap because it covers no expenses.

      • Don Taylor says:

        you make good points. There is a tension between the cost of a law to the fed govt and what a lower cost will mean for people. I think Avik truly thinks the cross subsidy of older by younger is bad. His plan would lessen this, but of course the most reliable Republican voters are age 55+ and those in the 55-64 age range are likely to forget some of their ideological upset if they are made lots worse off. My point is that Avik at least has a framework that invites Republican politicians to look for changes in the ACA and not simply say repeal which of course won’t happen. The details will be brutal, as they always are

  4. Bob Hertz says:

    Richard’s comments are well put. For years there have been cheap plans in the insurance market that covered very little during a major illness. Read any blog about medical debt, and you will find many stories from people who had cheap insurance but were overwhelmed by the actual bills.
    The goal of the ACA was to regulate insurance policies, and to gradually outlaw skimpy coverage.
    This has of course provoked resistance, in fact a lot of resistance in 2013 when people were more or less forced to give up their skimpy plans. (and got rather little in subsidies to ease the pain, if their family income had nudged over the subsidy cliffs.)

    There is another way to solve this. I advocate the expansion of Medicare so that it acts as the payer of last resort for anyone, of any age, above a high deductible.

    In other words, let people buy a cheap insurance policy with a total of $5000 in benefits.
    For the 2-4% of those policy holders who do get a serious illness each year, let Medicare pay the costs over $5000 on the Medicare fee schedule.

    The government would pay no attention as to how a family handled the first $5000. (as the government pays no attention as to how families pay for funerals.)

    Of course this would require an actual tax increase. But no more of an increase, I suspect, than will be required (or should be required) to pay for the ACA subsidies.

  5. Pingback: More on working towards a deal | freeforall

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