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    Sunday, April 12, 2009

    Health Care - More Discussion

    I promised more analysis of Ramesh Ponnuru's recent WSJ article suggesting universal health care coverage is probably not the best goal for healthcare reform.

    Among his arguments, Ponnuru points out that more Americans are concerned about cost and portability, vice coverage. In other words, we care about the impact on us, not on everyone.

    Ponnuru posits that two reforms will both address the cost and portability issue head on, and have the secondary effect of leading to more insured, those being:
    1. Break the bond between health coverage and employer-provided benefits. This was the centerpiece of McCain's plan, and I know people who have fantastic health benefits hate to hear this - it is the single biggest problem with our health care system. In McCain's plan, essentially the tax break that goes to employers today for providing coverage, would go to the covered, in the form of a tax credit to use on health care spending. In McCain's plan, extending this to all taxpayers would immediately increase coverage. It would make some - at the high end of the benefit scale - pay more. It was designed to be a wash on the majority of employed people.
    2. Allow consumers to cross state lines to buy health care plans - this would have the impact of allowing consumers to purchase cheaper policies from providers in states with fewer mandates and lower costs for the administrators. Sure, these consumers would get less generous plans, but they'd get cheaper plans, as well.
    With both these reforms intact, and direct government subsidies (those tax credits), you'd immediately benefit from lower costs for most plans, and more people covered. It might not lead to universal coverage, but it would significantly increase the number of people covered. As we know from system analysis theory (and practice), the marginal costs to squeeze that last bit of efficiency from any system, far exceeds the benefits gained. Health care, as a system, is no different.

    It is still law in this country that no one can be denied life saving health care. That won't change, and we'll still see the cost of the uninsured spread across those with insurance, but the percentage of your bill that goes towards that will go down, as more are actually insured. I think this is perhaps the best we can do, without a radical makeover of our entire system, which, will be in the European manner, and lead to rationing, reduced services, and less availability of health care.



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