Friday, October 16, 2009

Affordability and financing

Report from Center on Budget and Policy Priorities. Table 1 in particular is a nice side-by-side of how the premium subsidies differ across Baucus, Senate HELP and House bills. Big differences are between 133%-200% of poverty, where Senate HELP has people paying 1% of income 3.7% between 133-150% and 4.5% between 151-200%. 200-250% it is 3.3% v. 7%. You can of course address the affordability concerns by adopting HELP premium standards....but you then have to pay for it. I have an idea. What if we cap the tax exclusion of employer paid premiums! This will address affordability and will inject a much stronger dose of control into the bill. Set the cap at the national average and reduce federal deficit by about $500 Billion over 10 years (v. $201 B over 10 with tax on high cost insurance).

This is the most bipartisan thing cooking with health policy types. This is a different approach, from an imminent conservative economist but has as a centerpiece eliminating the tax exlcusion. I actually think what he wrote is not really all that different from what I wrote in the NYTimes blog a while back. They both are premised on providing catastrophic cover for all, and getting people to purchase other insurance if they want to do so with after tax dollars.

Taking a big whack at the tax exclusion is the simplest way to reduce health matter what type of approach you fund with revenue.

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