Wednesday, December 15, 2010

Offense is harder than defense

Dave Leonhardt with a nice piece placing opposition to health reform in historical context. One take home from this long history is that you might as well try something radical because any new health or social policy will be called radical even if it is not. The Republican alternative to the Clinton Plan became the end of the Republic 15 years later. It will be fascinating to see what the House Republicans do on health reform in the new Congress beyond passing a repeal bill that has no consequence. Will that be it, or will they move to pass an alternative vision?

One thing I learned from my experience coaching my 10 year old's little league football team this past Fall is how much harder offense is than defense. On defense, one player can make a great play and the entire team looks great. On offense, 10 players can make a great play and one player messes up, the play fails and the team looks terrible. In the House of Representatives, the Republicans are getting ready to shift from defense to offense. Do they even have a health reform offense?

I don't believe that they do have an offense on health reform. That does not mean they don't have ideas, but they are mostly expert in using them to argue against things. I would love to see Paul Ryan's budget committee mark a bill along the lines of his roadmap proposal. I suspect he cannot pass it through his own committee, much less the entire House, but who knows? The default of our health care system with no changes is future fiscal disaster for our country, so we have got to do something. Offense is a whole lot harder than defense...I think the House Republicans owe it to the country to lay out their vision for health reform, and to go on offense.


  1. The big republican idea, removing the tax exclusion and providing people with refundable credits (which distributionally is quite progressive) was very cynically made into a campaign attack by the Obama campaign. Republicans have laid out a vision for health reform, the problem is that it can't compete politically with free eyeglasses and $0 deductibles. Free goods and other people's money usually win.

  2. The Republicans need to mark a bill, have it scored and make the case.

  3. The GOP plan, as best I can tell, is to expand coverage by lowering price. And the way they do that is by allowing insurance companies to re-locate to low regulatory states and sell nationwide. It's basically the model followed by the credit card industry when the Supreme Court prohibited state regulation of out-of-state credit cards.

    The problem of this approach can be readily grasped when one examines the interest rate on one's credit card, and discovers that despite state laws against usurious interest rate, your credit card company is free to charge 20-40% APR.

    Freeing health insurance companies from regulation would lower costs somewhat, but it would do so by green-lighting all sorts of abuses, denials of coverage, capricious cancellations of policies etc. that would be beyond the reach of one's state regulatory authorities. In addition, insurance companies would be free to deny coverage to the neediest (and most expensive) clients and would be free to deny coverage based on pre-existing conditions and such.

    In most scenarios one finds that 10 to 20 percent of the group account for 90% of the costs. The GOP plan cuts costs by allowing insurance companies to drop these people, or exclude their costly ailments from coverage. The GOP plan, basically cuts costs by treating chronic sufferers and the infirm as sacrificial lambs.

  4. Other across state lines approach would be for the fed govt to define insurance benefits so that you would be shopping apples to apples. In this case, the idea still won't work well because of the premium differences then will be based on the cost of receiving care where an insurance company has contracts. If I call BCBS Arkansas and say will you sell me a policy, they will likely say sure, so long as you come to Arkansas where we have negotiated rates to use care.

  5. is that neceassarily the case. For instance, if you are a federal employee there are several nationwide plans that you can purchase. My guess is that those insurers are patching together their state networks to provide national coverage and where they don't have that they are getting some sort of reciprocity from another carrier. Conjecture I know. The other way you can envision a plan that would be truly nationwide is if it were an indemnity plan, that said, i don't think any insurer would do one without a higher deductible. That said, unlike you, i don't think you have to set the deductible as high as 10k to get someone to enter the market.

  6. I think there is a fed employee/mail carrier plan that covers just about every county via BCBS. It isn't the end of the world to open up across state lines, it is just far from a panacea, and there are many choices to be made if you want to do this. For example, do you define insurance benefits nationally and then say go at it or do you say states do whatever and go at it. Presumably companies can underwrite and also just decide not to sell in certain places? Also reciprocity and competition don't exactly go together. In any event, the House Repubs should pass a bill laying out how they would do it, see what CBO and others say and go from there.

  7. "In any event, the House Repubs should pass a bill laying out how they would do it, see what CBO and others say and go from there."

    I think this is the rub of the matter. I wish it weren't so but the reality is the republicans would prefer a bad and unpopular policy to remain so they can campaign against it. If republicans are serious about reform then they would champion the Patients Choice Act but as far as I can tell seriou ssupport for that does not extend beyond a handful of republican legislators (none of whom are nmaed mitch mcconnell, john boehner, or eric cantor).