Wednesday, January 20, 2010

Hit the "Reset" Button

I didn't blog in great detail about the Senate's version of the health-care bill. A short summary is that I thought it was superior to the House version in principle but that it collapsed into a morass of special interest deals and unintended consequences that made it one of the worst pieces of legislation I've seen since I worked in the U.S. Senate in the 1970s. The unexpected election of Scott Brown in the Massachusetts U.S. race seems to afford a window for Congress to go back to the drawing board and produce a truly bi-partisan and measured piece of legislation.

So, what would I actually recommend (after all of these posts commenting on what other people have proposed)? I thought about this last night, and I think, if I were the new health-care-reform czar (presumably the President will want to listen to some new advisors after the Massachusetts election) here is what I would propose:

1 ) Get Republicans on board with two things that they think are important:

a ) Use the Interstate Commerce power of Congress to stop states from restricting interstate sales of medical insurance. Specifically, deny the states the power to insist on expensive bundles of mandates. Fire up a market for no-frills insurance, what in my parents' day was called "major medical" insurance. Let the medical insurance companies compete on price and quality like GEICO and Progresssive and Allstate do on automobile insurance.

b ) Include tort reform to restrain the costs of medical malpractice insurance.

2 ) Keep the "Cadillac tax" idea from the Senate bill, but make sure that the cut-offs are indexed for inflation.

3 ) Estimate the revenue gained from # 2) above. Call this revenue $M. Get together a top-rated collection of health economists, and tell them that they have $M to work with, and ask them to design a system with the following three possible uses of that money to find the most effective and least disruptive ways to expand current medical insurance access:

a ) Return the money to the states so that they can increase the Medicaid eligibility limits. In other words, don't impose unfunded mandates on the states such as the ones that led to the infamous "Nebraska exception". If we want states to expand Medicaid, provide them with the money to do so.

b ) Offer a refundable tax credit for individual purchases of medical insurance.

c ) Use the money to require the interstate competitors (see # 1 above) to participate in a "high-risk" pool for people with prohibitive pre-existing conditions. (This is similar to how many states deal with "high risk" drivers.) This might include a new mandated "no-pre-exisiting-condition-exclusion" benefit for anyone who is covered by any sort of insurance policy as a child, and who agrees to stay in some policy as he/she becomes an adult.

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