Monday, September 7, 2009

Demand v. supply side changes

Jon Gruber, from MIT, makes a clear argument that a cap of the tax exclusion of employer paid insurance premiums ALONG WITH insurance market reforms has the best chance of expanding non-elderly insurance coverage while adding cost reducing pressure. Doing just one or the other is an incomplete fix.

It seems to me that a cap of the tax exclusion of employer paid premiums has to be a part of any compromise will make patients/consumers more aware of the true costs of their insurance choices and likely their care choices as well, and it amounts to redirecting money already in the health care portion of the economy. I would think the income tax surcharge in the House bills has just about zero chance of passing the senate, and I think that is good.

This still doesn't really address cost inflation in Medicare, which I think can only be done via an Independent Commission looking at payment rates and coverage decisions.

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