Ball of Confusion
David Brooks wants to save your employer coverage by eliminating your employer coverage. In an article called A Choice, Not a Whine, David Brooks wants us to see that there is a plausible Republican alternative to Obamacare. He begins, of course, by softening up the opposition. "The case against Obamacare is pretty straightforward." he says. Obamacare centralizes power (by which he means centralized Federal power, not centralized state power). There will be lots of new Federal offices; no one knows how many, but there will be lots. Obamacare has led to 4,103 pages of regulations, which is supposed to sound like a very large number, even for a national overhaul of the entire healthcare system. He is also worried that "The law also creates the sort of complex structures that inevitably produce unintended consequences. The most commonly discussed perverse result is that millions of Americans will lose their current health insurance."Good lord, did I hear that right? Is he saying that millions will become uninsured under Obamacare?
He goes on. "A report by the House Ways and Means Committee found that 71 of the Fortune 100 companies had an incentive to drop coverage... a Congressional Budget Office study this year estimated that 20 million could lose coverage under the law."It's hard to tell, but he is not actually saying that people would lose their coverage and join the ranks of the uninsured. What is is saying is that 20 million people could lose their coverage at work and instead begin to get their coverage on the state exchanges. The "incentive" for the 71 Fortune 100 companies is that it might be cheaper for them to pay their workers directly to buy their own insurance. (To be honest, that 71 sounds low; everyone knows that business wants to get out of the health benefits business. I'd expect that aside from the insurance companies themselves the number would be closer to 100.)But 71 big companies. 20 million workers. Big scary numbers. Do the Republicans have a plan to stop this? But of course.Brooks cites an essay to be found in National Affairs called How to Replace Obamacare by James C Capretta and Robert E. Moffit. According to Brooks, Capretta and Moffit "lay out the basic Republican principles."The first principle kicks off with a cliche - "patients should have skin in the game... they should bear a real share of the cost." (And here I thought that with years of reduced benefits, higherco-pays, deductibles, and coinsurance consumers were already feeling some dermal soreness.) How would the Republicans make people have more skin in the game? By eliminating the current tax exemption that businesses (alone) get for providing health benefits. Instead, the consumer would get a tax credit to use to buy their own insurance on the market. Having each person shop for their own insurance would force people to buy high quality, low premium plans. Why business is supposedly not shopping this way themselves is laid out in the Capretta and Moffit article. Since business gets a tax exemption on employee benefits, it has an incentive to keep them as rich as possible.Unfortunately, business doesn't know that it's supposed to be doing this. Instead it has been cutting benefits and transferring costs to their employees for years. Now, however, Brooks wants business out altogether. It wouldn't be 20 million people losing their employer coverage. It would eventually be everyone.To be fair to Capretta and Moffit, they believe that this transfer of risks and benefits should be legged into starting with employers of 200 workers or fewer. The really large employer groups, seeing what a good deal this is (and the workers too, delighted at having potentially more skin in the game; in fact, their entire pelts) would eventually come aboard too. Obamacare problem solved.Brooks is full of other great ideas too. Defined contributions for Medicare which would amount to each enrollee getting a fixed amount they would spend on (presumably) private insurance plans to get a minimum level of benefits that they could then supplement out of their own pockets. And a rule that says "any new spending would be offset with cuts so that healthcare costs do not continue to devour more and more of the federal budget." This would put a zero sum cap on federal medical spending so that if, say, 77 million baby boomers came into the system, or Medicaid was eliminated for a voucher system, benefits would be reduced for everyone in order to compensate.Sounds like a choice to me.