Brooks Pushes Wyden-Bennett…Again (Updated)

In his column this morning David Brooks has put in a good word again for Wyden-Bennett:

Now that the first wave of legislation is bogging down, you want to take the seeds of cost control and you want to do more. You want to eliminate or cap the tax exemption on employee health benefits. This is a big way to crush one of the core drivers of health care inflation. You’re willing to give MedPAC-style technocrats a chance to take control of Medicare spending away from Congressional spendthrifts.

You want to loosen federal regulations so that states have more room to experiment — not tighten them, as the current legislation does, so that states have less. You want reforms throughout the system that will cut down on first-dollar reimbursement in exchange for catastrophic protection. You want to tie Medicare subsidies to income. You want to look at anything that will move us away from a fee-for-service model, the core perversion in the system.

You want to change incentives at both ends. The legislators who drew up the first bills want to change the provider’s incentives. But big cost savings can also come if consumers have choices and incentives to hunt for cheaper coverage. The Wyden-Bennett bill gives people a chance to choose the best option, instead of imprisoning people in existing coverage, as the current legislation does. The Medicare Part D reform has produced impressive reductions by allowing consumers to pocket prescription drug savings. Other proposals would give people tax credits and allow them to go to any trusted community group — like AARP or a union or a religious group — that wanted to compete to offer coverage.

Wyden-Bennett has many advantages:

  • It’s not the preferred approach of the Congressional leadership. Those who support the Congressional leadership account for about 20% of the country these days. Big changes require big support, they shouldn’t be shoved down the throats of the American people by a small minority.
  • It has bi-partisan support. See above.
  • It achieves universal coverage within the margin of error.
  • It has a “public option”, a sine qua non for many progressives, in a form that should be acceptable to most conservatives.
  • Unlike the approaches favored by the Congressional leadership, it has received high marks from the CBO and the Joint Commission on Taxation.
  • Everybody wins! It accomplishes both universal coverage and cost control.

Healthcare reform is too important to be left in the hands of partisan bickering to score partisan points.

Here’s a summary of Wyden-Bennett. I’ve already made my comments on it—I don’t think it addresses the supply side of the problem without which I’m skeptical that any cost savings will materialize regardless of whose plan is adopted.

Update

After noting that substantially less ambitious solutions would accomplish the stated objectives of the healthcare reform plans making their way through Congress:

For all the political fuss, the primary Democratic goal of covering the uninsured is not some insurmountable problem. About 25% or so are probably already eligible for public programs like Medicaid but haven’t enrolled. Another quarter fall in the top half of the income distribution and are either between jobs or could afford to buy coverage on their own. Those facing genuine hardships number far fewer than the 47 million figure tossed about, and the easiest way to help this group is to provide some kind of credit to those who buy private insurance outside the workplace.

the Wall Street Journal puts in a good word for Wyden-Bennett, too:

We should add that this kind of compromise is far from our policy ideal. We prefer Wisconsin Republican Paul Ryan’s plan to capitate Medicare payments and John McCain’s campaign plan (not to mention Senator Ron Wyden’s Democratic voice in the wilderness) to replace the current tax exclusion with more individual control over the purchase of medical services. But we’ll gladly settle for second best if we can avoid the terrible harm that the current House and Senate bills would do to the country.

The time may yet be ripe for approaches that don’t suffer from the problems of the Congressional leadership’s plans.

2 comments… add one
  • Brett Link

    Wyden-Bennett isn’t bad, although as the article you linked to points out, you’d need some guarantees that the subsidy system won’t degrade over time due to inflation, and that the plans can’t engage in adverse selection. I’d also probably add that you want to bring Medicare into the system eventually, since having a massive outstanding exception to the program won’t be good for its political health.

    I wonder if you could take a page from Housing Reform, though, and set up a voucher system. Basically, mandate that everyone have health insurance coverage, then issue everyone – everyone, of all income – a voucher worth a certain value that could be used to purchase health insurance that meets minimum standards (i.e. it covers a certain amount of services, etc). At the same time, have an auction of sorts among health insurance providers, and pick one insurance provider as the “default”, meaning that if you don’t explicitly sign up for a different provider, you’re with them. Outlaw adverse selection on the basis of preconditions, with some stiff penalties for violation.

    I’m guessing the vouchers would be issued on the state level, with the federal government agreeing to “match” a certain amount of state spending on the voucher as long as the state met a number of conditions (like setting the vouchers high enough in value so that it has a certain doctor acceptance rate, etc).

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