Monday, November 30, 2009

CBO report on effect on premiums

Is just out today and this will be important. Quick read is that the 160 Million in large group and small group market today will see very small decreases in premiums (1.5% and 0.5%) in 2016. For individual purchase market, the short version is that two things will happen: (1) premiums will be higher for (2) substantially better insurance....with better defined by covering more services and having higher actuarial value....which means amount of costs that insured pay out of pocket. Roughly, 10% higher premiums for better coverage (need to get straight how much better). Then people will get income based subsidy (around 6 in 10 folks buying in this market will get some subsidy).

So, CBO says premiums down (a little( for the 160 Million with employer based cover today. For the uninsured, their ranks will be reduced, and the total premium paid will be higher than that paid by the 14 Million now covered in the individual market....but the insurance will be more expansive. And many will get premium support.

This will be spun every which a way.....I also need to read it more carefully and will later comment more.

Update: NY Times early take. Ezra Klein weighs in.

Sunday, November 29, 2009

You say you are for reform but wanna cut costs?

There are quite a few Senators who have been saying things like I am for reform, but the current Senate bill doesn't do enough to slow costs. I agree. Here is a good overview of some practical ways to improve the bill. The Senate is going to start talking about this, the Senators like Snowe, Lincoln, Carper, Lieberman, Landrieu, Hagan, Corker, Bennett, Collins, Nelson (of Nebraska) need to step up and say how they would improve it since they all say they want reform it is just that the current bill doesn't do enough to control costs. They aren't helpless.

And the more liberal Senators who say the full scale public option would slow the rate of growth are correct.....but its not going to happen. Folks like Durbin, Schumer, Feingold, Burris, Sanders, Dodd, Harkin, Wyden need to step up to what is doable.

Left/progressives meet the centrists. It is time to get 'er done....or put another way, to put up or shut up.

Monday, November 23, 2009

What Next?

Unless there are really big developments (which is doubtful) on the reform front, I am going to take a bit of a breath over the next few days and won't be blogging and won't be writing in the News and Observer this Friday. Here are a few thoughts on what I think are the likely direction of things in the Senate with the bill.

1. Public Option will come out. And the weak public option is not worth having in the first place, I don't think. A strong triggered public option would like be more effective at 'holding insurance companies honest' than the one now written.

2. I think med malpractice comes in. For a certain segment of the population who want reform and who want to see the President succeed and who think the Republicans are just blocking for political gain....they still have uncertainties and things don't pass the BS test for them. Reflexively, they think med mal reform is important and bringing it in will appeal to them, the doctors of the nation, the moderates in the Senate and the Blue Dogs in the House. And the CBO says that a list of changes will reduce deficit by $54 Billion over 10 years....with ~$40 Billion of this being for declines in defensive medicine. And this will be important for any future cost control efforts because without med mal/tort reform, the docs will always say 'what about malpractice?' to any changes. I wrote about it last summer.

3. I assume some abortion compromise will be worked out. Those on both sides are very noisy.

4. An Independent Medicare commission is likely to stay in but be focused on payment reforms (shift from fee for service in Medicare toward other approaches). The questions related to things like changing eligibility age will be excluded from such a commission but will be wrapped up in some sort of Deficit reduction commission that is likely to come about next year....not as part of health reform but more generally next year as Dems seek to move ahead with a Deficit commission to prep for 2010 elections (and it is needed).

5. There will be attempts via health reform debate to cancel the remaining $200 billion in stimulus money and/or support of moderates will get hooked in with that issue.

6. Not sure what will happen on financing. I wonder if the addition of the payroll tax to Senate was result of a 'pre conference conference' with the Senate seems no way on income tax hike, while House was no way on insurance tax. Payroll tax plus pared back insurance tax the compromise? This is also where the med mal may be the only way to bring along some of the moderates.

Also, if something passes the Senate, perhaps the President will say 'this is my bill' and ask the House to treat it essentially as a conference bill, bring it to the floor with a rule that doesn't allow amendments? It is hard enough to get something through Senate about twice?

In the end, I think the key is what the members of Congress and their consitutuents understand the status quo of doing nothing to represent. How bad do they understand the status quo to be? I think pretty bad. As worry about deficits rise, there seems to be some who think we can't afford to do this now. In reality, it is the opposite. Because of what Medicare and Medicaid will do to the deficit inevitably with no change over the next 30 years, we cannot afford not to move ahead with something different. Advocates will have to be better at making this case for reform if it is to pass. The best visual for this reality is the graph that loads with this page.

As the headline of CBOs health care page says, "The federal budget is on an unsustainable path, primarily because of the rising cost of health care and the aging of the U.S. population." This refers to what happends if we do nothing. If we take a step now, we have a reasonable chance of improving this outcome.

Interesting interview with Humana CEO

from the WSJ. Best line of the interview "The recession hasn't touched health care the way it has other parts of the economy--which is also part of the debate, that fact that it is so big and keeps getting bigger. It's almost unstoppable even in a recession."

Most interesting insight is that he says they knew the payment increases in MedicareAdvantage in 2005 were unsustainable and so he is saying they knew as they got into that business, they also knew they would be getting out. Essentially this was the Bush administration widly over-paying private insurance companies for Medicare Advantage because they preferred 'private' to 'govt' even if they had to overpay to get there. Here is what I wrote recently about Medicare Advantage.

Saturday, November 21, 2009

Motion to proceed passes

60-39.....not sure who didn't vote. Debate will begin on Nov. 30. The over/under for passage or final death in Senate is 11:10pm Dec. 23.


Interesting article from the Economist on options to reduce the deficit. Hint: cutting food stamps won't get it done.

Lincoln says yes

Blanche Lincoln (D-AR) just gave her speech on Senate floor announcing she will vote for cloture on the motion to proceed tonight. That is 60. Vote is tonight ~8pm.

Smart Overview of cost slowing aspects of senate bill

is written by Ron Brownstein in The Atlantic's Politics blog edited by Marc Ambinder.

Friday, November 20, 2009

health insurance tax raises wages

Ezra Klein links to and discusses latest from Jon Gruber describing how the Senate tax on health insurance increases wages. The point of the tax on health insurance is for people to avoid it by choosing lower levels of health insurance. They have incentive to do this because no longer are all premiums paid by employers tax free income...and if the marginal amounts of premiums (above $23k for familes, 8.5k for individuals) are taxable there will be incentive to have less insurance and more wages. This reduces the amount of insurance, lowering health care costs while increasing taxable wages. Gruber estimates net wages rise by $234 Billion from 2013-2019, or about $700 per year per worker.

Senator Burr

Senator Richard Burr (R-NC), my senior senator put out the following statement yesterday about the Senate bill. Pretty standard Republican stuff this year, government takeover, saying the bill will explode the deficit when in fact the non-partisan CBO has said it will reduce the deficit by $130 Billion over 2010-19, and by $650 Billion from 2020-2029. As I say, this has been typical of Republicans this year--block and oppose anything--which is of course their right. But, it is very disappointing coming from Senator Burr, given that he has provided a bill of his own to the debate, The Patients' Choice Act (he is a co-sponsor of the bill).

I thought it would be worthwhile to review the Patients' Choice Act in the context of what is in the current legislation and Senator Burr's statements. I wrote about the Patients' Choice Act in the News and Observer on July 24, 2009. Here are other blog posts about the Act. Several big picture points.

*The Patients' Choice Act calls for repealing the tax exclusion of employer paid health insurance. The excise tax on high cost health insurance plans that is a part of the Senate finance bill is a de facto limiting of this tax exclusion. As Senator Burr and others (rightly) argue, ending the tax exclusion would help slow health care cost inflation. The tax on high cost health insurance plans is after the same idea. The tax proposed in the Reid bill is a much smaller tax increase than the repeal of the tax exclusion proposed by the Patients' Choice Act.

*The Patients' Choice Act had autoenroll procedures whereby person's would be automatically signed up for the lowest cost insurance plan available in an exchange, or health insurance market to be set up at the state level. This is an example of a 'implicit individual mandate' but the Act knew that if you are going to make risk pools work, you have to get people into them.

*Whatever else the Reid bill is, it is certainly not a government takeover of health care. It mostly leaves the system as is for the 160 Million people with employer based insurance, and the 105 Million people with Medicare and Medicaid [expands Medicaid]. It then creates insurance markets to try and cover others. The tag line 'government takeover' is ridiculous and not based in fact.

*All of the bills being discussed this year (including the Patients' Choice Act) have had as a central feature the setting up of insurance markets that were designed to help consumers be better shoppers of health care. The Patients' Choice Act (PCA) was much, much weaker on insurance market reforms than the Senate bill, and concerns over affordability which are raised over the Senate bill, would have been acute with the PCA because the subsidy provided was far, far below the cost of current policies.

*Probably the worst aspect of the Patients' Choice Act was its de facto block granting of the Medicaid program, which would have been a huge shift of costs to the states.

*The Patients' Choice Act was the first bill this year to have a fairly strong independent group to apply cost effectiveness research to coverage decisions. It is now being called an Independent Medicare Advisory Commission. Here is a detailed blog post about this from this past summer. So, I certainly don't expect to hear Senator Burr riffing on these ideas in the Senate bill since they were in his bill first. Title VIII of the Patients' Choice Act (pages 206-215) have some very detailed language about commissions to set standards, apply cost-effectiveness research, and even to penalize physicians who don't follow guidelines.

*Fiscal responsibility. It is hard to know how responsible the Patients' Choice Act would have been because it has never been scored by the CBO so far as I know. I wrote in July that it should be scored soon....but it never was, again, so far as I know. Is this because the CBO was too busy and couldn't do it? I am not sure. It is an advantage to be able to say you have a bill but not have it scored.

Like I have said in the past, I give Senator Burr credit for introducing a plausible bill. Not my preferred approach, but he made a reasonable attempt. As a citizen of North Carolina, I would certainly prefer him to seek to improve the bill instead of simply oppose. If he thinks the status quo is better than the Senate bill, he should vote against it and make the case to the people of North Carolina that he was standing up for us. I certainly don't agree. However, I am willing to listen. I would like to hear him make the case without resorting to the rhetoric contained in his statement of yesterday.

If we can just add gay marriage...

to the debate, the health reform train will really be rolling! More on illegal immigrants and dislike of Rahm Emanuel by the Hispanic caucus.

Column today in News and Observer

is about getting straight what doing nothing means. Put another way, one definition of insanity is doing the same thing and hoping for a different outcome.

The Senate bill is a lot better than the House bill on addressing costs....could still be improved.

Thursday, November 19, 2009

US Preventive Services Task Force

There have been lots of dumb things said about the whole mammography recommendation of the US Preventive Services Task Force....the dumbest is that 'this shows bureaucrats are getting between patients and their doctor'....of course all the members of the task force are doctors and scientists and they don't work for the federal government. That is the point, they are independent experts. Here is the roster.

Here are the recommendations. Here is what the evidence grades mean.

Note that the recommendation is for average risk women, not women who have family history, known genetic predisposition, etc.

If it is going to be the case that asking the question of whether something works or not and is worth it or not in health care means that you are evil, etc. then the only thing I can think of saying next is that we are going to need a bigger printing press.

CBO Score of Senate Bill

is here. Most interesting notion is what CBO says about the effect on deficits in the second decade, or years 2020-2029....which they say what be quarter percent of GDP....which is $650 Billion over 10 years. Context is everything....

Financing of Senate Bill

The Senate bill's financing is better than that in the House, but it moved a bit from the Senate finance committee bill. The high cost health insurance tax trigger is $23,000 in annual total premiums plus additions to flex spending accounts for family policies, and $8,500 for individuals. This has net effect of -$154 Billion, down from -$201 Billion in finance committee bill....and the new Medicare payroll tax increase, from 1.45% of payroll to 1.95% of payroll on the amount ABOVE $200,000 for individuals, $250,000 for couples. So, income from $1-$250,000 will be subject to 1.45% (employer and employee) and from $250,001+ to 1.95%. This raises $54 Billion over 10. So, Reid increased point where insurance tax kicks in, had to find revenue/savings to offset and added the payroll tax increase to do so.

I would prefer to not have the payroll tax increase, because it won't serve to address cost inflation. But, it is better than income tax increase I think.....and the big picture of the financing in the Senate is much better.

Keep in mind the point of the tax on high cost insurance is for it TO BE AVOIDED. If people's premiums at high levels will be treated as taxable income, they will be more likely to seek less generous policies from their employer over time. This will transition income from nontaxable when it is delivered via insurance premiums, but it will increase taxable income if their pay rises, which of course increases tax receipts.

Wednesday, November 18, 2009

Senate Bill

The numbers are as follows, around $850 Billion in outlays over 10 years, reduction in the deficit of around $127 Billion over 10, increasing coverage of 31 Million (v. 36M in House), and getting to 94% of coverage for legal residents (v. 96% in House). Biggest cost difference is in the second 10 years, CBO estimating reduces deficit by $650 Billion in decade 2 (years 11-20), whereas for House bill they noted expected to be neutral.....shows difference in income tax increase v. other financing and also less subsidy level in senate bill plus the payroll tax increase to defray effect of the baby boomers.

Keep in mind when thinking of the outlays of the bill, we will spend $35 Trillion on health care over next 10 years if we do nothing, so $850 Billion over $35 Trillion is about 2%.

Here is a summary of the bill....looks like a high cost insurance tax stayed in but also an increase in the Medicare payroll tax for those of $250,000+ of 0.5 percent. Looks as though the lingo of this is extending solvency of Medicare. Full bill is here. The bill is written as a substitute because all tax raising bills must originate in the House, so there will be a motion to strip all language from House bill and insert this text as a start....standard stuff.

Senate merged bill later today

Ezra Klein reports that the Senate merged bill will be released later today....and that Sen. Reid is happy with the score. No details.

Tuesday, November 17, 2009

Epidemiology of abortion

WSJ has breakdown of how abortions are paid for.

Ball is in Elmendorf's court

CBO may be releasing their score of the merged Senate bills today. Then perhaps a motion to proceed as early as Friday.....supposedly their are only 57 sure votes to start debate. If so, they can't even start. If they get 60 to start, Republicans will likely insist on reading entire bill on floor, Dems will then go non-stop to do it and Republicans will have to keep at least 41 on the floor around the clock.....if less one Dem can stop the reading. Then they will get down to actual debate on Nov. 30. Welcome to the Senate!

Monday, November 16, 2009


Apparently, quite a few people had no idea that the federal government massively subsidizes private health insurance by not taxing the premiums that employers pay on behalf of their employees. And people who do health policy. I am not sure what to say next.

Friday, November 13, 2009

Office Hours

Here is the video of my 'online office hours' today, talking about health care reform.

abortion wars

Today's News and Observer column focuses on the entry of abortion into the health reform discussion. On balance, this reduces the chance of a reform bill passing because because of the emotion of this issue.

In the column I cite a Kaiser Family Foundation study concluding that 46% of employer based policies covered abortion. Here is a discussion of the differences between this study and one done by Guttmacher Institute that concludes that 87% of employer provided insurance covers abortion. That is a big difference. I am not sure which one is correct...

Also, I have gotten feedback today from both sides of the abortion debate: some saying I am soft selling the impact of Stupak because I want to erode a woman's right to choose, and others asking how I could think the health of the unborn is not important and that I only care about the rights of women and not babies. These comments come in response to the same column, which I would argue reveals just about nothing about what I might think about abortion one way or another. This is the main point of my column.....people think what they think and see what they see about this issue moreso than any other. It is not going to be resolved in health reform, and doesn't belong in the debate.

More on costs

This would be a good development....a commission to address the deficit as affected by Medicare and Social Security. Not clear if this would be in addition to an Independent Medicare Advisory Commission that has been considered more likely to fly in the Senate bill. Medicare actually a much bigger long term problem than Social Security because SS benefit increases are tagged to inflation, while health care inflation going up much faster than general inflation. An obvious step is increasing Medicare eligibility age by 2 months per year starting in 2014 until in reaches 67 by 2025, as I wrote with Frank Hill here.

Interview with Gruber

Good interview from Ezra Klein with Jon Gruber talking cost control and the art of the possible. I agree that you actually have to get the coverage straight to have a hope with cost control....I just wish we could muster more political will to do more on both at the same time.

Thursday, November 12, 2009

Senate considering payroll tax

Sen. Reid is apparently considering a payroll tax increase on persons making over $250,000....not clear if this is for Medicare....or to replace tax on hi cost health insurance....or is extra finance.

If it is replacing hi cost health insurance tax, that is bad news for cost control. If it is to put more into Medicare, I would rather means test Medicare benefits for higher income folks, I think. Obviously need to see the details.

The House bill does not have much that is promising in the in the way of slowing health care inflation. The Baucus bill has the high cost insurance tax which is a convuluted way of limiting the tax exclusion of employer paid insurance....but it is a start. If that goes out, then that is not so good.

Also, a realistic goal is to slow the rate of cost inflation. So, when people say 'will my premiums go up?' of course they will. They will skyrocket if we do nothing, as they have the last 10 years. If they go up less fast, that is success. I don't know of any nation ever that literally spent less one year than they had the year before other than the Soviet Union after in broke apart. Savings= slowing the rate of growth. Put another way, we will spend $35 Trillion on health care from 2010-19 if we do nothing. If we spent less than what is projected sans any reform, that is a success.

Wednesday, November 11, 2009

Self promotion alert

If you are reading this, you may not desire to hear more of what I have to say, but just in case, I will be doing 'online office hours' via webcast on Friday, Nov. 13 from Noon to 1pm. More info here.
Those interested can submit questions and I will do my best to can email questions to or send a tweet to #dukelive

More on abortion

from Politico. On the bright side, maybe it will make the other hard choices easier....

Tuesday, November 10, 2009

Worries about costs

The New York Times on worries that reform bills are mostly expanding coverage but not necessarily set up to slow down costs. The House bill, in particular is a problem in this area. One of the biggest problems is adding a new source of money (income tax increases) into a system that is now unsustainable due to costs. The Senate hi cost tax on health plans is a more responsible approach, but still far from ideal as I wrote recently here.

Here are three ideas that would introduce savings to the system. Senator Collins, like any of these? In the end, the biggest barrier to actually reducing costs is us--consumers.

Monday, November 9, 2009

More on abortion politics

At least one member of Congress understands what I wrote about last week regarding federal subsidy of abortion.

How close was it to going down in the House?

One answer is just 3 people switch. Ezra Klein provides interesting take here. Only 13 Dems voted for a procedural motion late in the game that would have killed the bill. Most of the others want a bill, just not this one. Key sticking areas for more conservative Dems, which are probably alot like many Dems in the Senate:

*income tax increase for those making $500k or $1Million for couples >>>>in the Senate finance committee there is a tax on high cost health insurance

*Public option >>>>Reid talking about public option, but this must surely be wabbling now....must hold Lieberman to even get debate started and says he will join filibuster at the end if any public option in. And the public option is weak in any event, certainly not worth killing the entire thing.

*employer mandate in House bill >>>>>>>>>there is not one in Senate

interesingly, the abortion restriction is fairly stringent, banning not only use of public money, but from any insurance sold via exchange including abortion even if paid for with individuals own money. This seems to be price to get enough Blue Dogs to vote yes and kick the ball down the field....but that may be too conservative in the Senate.

I think adding more on med malpractice in the Senate and then seeing if you can get started with public option in and dropping it if you can't. They already have the weak public option in the conference discussion, but it seems like it will have to go out. I guess you would rather fold on it at conference so it seems a big concession.....but it is not worth killing the bill over.

Sunday, November 8, 2009

Bill passes House 220 to 215

with 1 republican votes and 39 democratic no votes. Ann Cao from LA is the republican from LA who voted aye...never heard of her. Guess we will now. Just think, she votes no and the republicans win both specials last week and no other votes change and it goes down 218-217. On to the senate.
UPDATE: The she is a is more from Politico. Maybe he was tired of Sen. Snowe getting all the attention.

In NC Shuler, Kissel and Mcintyre are the Dems who vote no.

Many dems including blue dog leader Jim Cooper (D-TN) say they vote yes in knowledge bill moves back middle in the senate.

Saturday, November 7, 2009

218 votes wrapped up

so says Politico....and that House expects to pass bill later tonight. Key apparently was Catholic Bishops support of the bill after an amendment on abortion funding was accepted by Pelosi. The Pres was pressing the flesh this afternoon in the Capitol.

This is a smart comment on comments that Congress needs more debate of big issues.

Here is more on the amendment on abortion that was the final deal maker......

The House

has started debate as of mid Saturday my kid's soccer tourney so not exactly sure what is included in the rule they approved to guide debate.

Friday, November 6, 2009


The House is wobbling toward a vote....sometime. Rep. Weiner has agreed not to insist on a vote on his bill for straight single payer. And the vote is apparently not going to be tomorrow. The fractious issues seem to be public option, abortion, illegal immigrants (and how many different times and ways they state they can't get fed subsidies, and income tax increase).

Insurance Across State Lines Won't Work

So says me in today's Raleigh News and Observer. Here is the New Yorker article in which Atul Gawande made McAllen, Texas the most famous medical market in America. The folks at Dartmouth have been analyzing 'practice patterns' or variations in medical care for many years. Here is a link to their web site. Buy insurance across state lines is a great political tag just won't work.

Public Option OK?

Jacob Hacker and Diane Archer have an article in The New Republic arguing that the Public Option as written in the current bills might not be as weak as many note. I don't think I am convinced, but they have a reasonable argument.

Thursday, November 5, 2009

Good article on cost control

and the slide away from same in the ongoing health debate.

CBO score of Boehner Plan

CBO released score of the GOP health reform (Boehner plan). Key facts are these: in 2010, the uninsured rate is 17% of legal residents. After 10 years of the Boehner plan, the uninsured rate is 17% of legal residents. CBO does say 3 million folks insured over these 10 years who otherwise wouldn't be. And bill is estimated to reduce deficit by $68 Billion over 10 years.

House Democratic bill is estimated to reduce deficit by $102 Billion over 10 years and drop uninsured rate of legal residents to 4-5%.

This was not a wise move by Republicans to release this plan....they can't say with a straight face believe the deficit reduction of our bill as scored by the CBO, but not the deficit reduction for your bill as scored by the CBO.

This is the third time this fall that an external factor has fallen into the lap of the Dems/the President and helped reform.
1. The you lie incident during the presidents speech...rallying wavering Dems.
2. The AHIP report released just before Senate Finance Committee vote.
3. This plan released by the Republicans.

Abortion as the hold up....really?

Count me as flabbergasted on this one. Abortion as the stumble on a health reform bill in the House. Really?

I don't say that because I think abortion is not an important issue. I say because I have never met anyone who changed their mind about it (except for politicians who want to run for the Republican nomination for President....but I haven't actually met any of them).

The House is struggling to come up with legislative language to ensure that no federal money would go for abortion, that would line up with what the President said in his speech (no fed funds for abotion under health bill). Activists on both sides are trying to hitch their cause to something that is inevitable....but they are making it less so!

They need to work out a compromise here and move ahead. I would be fine with just saying public option won't pay for fact, I would just take it out because it is so weak it doesn't mean much, but that is another story.

Abortion is one of the most contentious societal issue we have....and we aren't going to work it out while we are doing health reform.

As an aside, consider the following facts when thinking about the quest for developing language that would ban the use of federal money from being used for abortion:

*If a single abortion has ever been performed and paid for by employer provided health insurance, then the tax exclusion of employer paid wages means that federal money subsidized this abortion.
*If a single abortion has been performed in a hospital constructed under the Hill-Burton hospital construction Act of 1949, then the federal government subsidized that. Hint: just about every hospital constructed between 1949 and the late 1970s benefitted from Hill-Burton.
*If a hospital or clinic organized as a 501-c-3 corporation (aka non profit) has provided an abortion, then that institution has benefitted from being non profit; they have benefits ranging from likely paying no local property taxes, to not paying state and federal income taxes, etc.
*A physician who performs an abortion and who trained in the United States benefitted from direct Graduate Medical Education subsidies from Medicare to the teaching hospital in which they did their residency and fellowship, and their salary while training was essentially paid by Medicare via indirect Medical Education (IME) payments whereby Medicare pays teaching hospitals more for all care they provide in order to support residency programs and the training of physicians.

etc, etc, etc, etc.

Tuesday, November 3, 2009

Republican Alternative Plan

Ezra Klein writes about this well in a very straightforward manner. Not a serious plan.

Sunday, November 1, 2009

Bob Creczyn in N and O

BCBS NC CEO Bob Greczyn has an op-ed in today's Raleigh News and Observer. I would like to highlight a quote with which I totally agree (para 3):

" premiums have to rise in concert with mounting health care costs and increasing demand for the things insurance pays for: hospital stays, drugs, medical devices, and diagnostic testing. [my note: and doctors] Reform that doesn't address these underlying cost drivers will drive costs up, not down."

By far the most effective, and simple policy prescription to address what he notes is repealing the tax exclusion for employer provided health insurance. When employers pay for the premiums of employees, this provides them with tax free income and has systematically lead (for half a century) for persons to have more insurance than they would choose if they purchased insurance with after tax dollars, and therefore understood how much their insurance cost. This is by far the most bipartisan notion that exists in health policy circles.

The link to the right by Jon Gruber outlines the issue. There have been a variety of proposals with this at their heart, including Sen. Burr's Patient's Choice Act, Sen. Wyden and Bennetts reform plan that had bipartisan support before President Obama got elected.

As I have written in the past, the biggest barrier to reducing the rate of health care spending growth is us. And while the high cost insurance tax in the Senate plan is not my ideal solution (see above), it is a de facto capping of the tax exclusion and far preferable to the House bill income tax increase. Here are three suggestions I made along with Frank Hill for how to improve the Senate bill.