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.

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