Balancing the Budget–Health Reform

Central to the argument of my book Balancing the Budget is a Progressive Priority is the belief that what our country most needs to attain a long range sustainable budget is a political truce on health reform (ch. 7):

What our nation most needs is a bipartisan health reform strategy that will allow us to address the interconnected problems of the health care system: cost, coverage and quality. There is no perfect health care system and no perfect plan. However, without a deal that allows both political parties to claim some credit as well as to have some responsibility in seeking to slow health care cost inflation, we have very little chance of success.

It is well understood that health care costs are the primary long term driver of our fiscal imbalance (award for clarity of presentation), and so a viable health reform strategy is a necessary, but not a sufficient condition of ever having a balanced budget again. I lay out six next steps that I see as a bipartisan (everyone likely loves and hates something on this list) way forward to allow us to address the related issues of cost, coverage and quality.

  • Replace the individual mandate with federally-guaranteed, universal catastrophic insurance coverage and sell private “gap” insurance in state-based exchanges
  • End/modify the tax preference of employer paid health insurance
  • End the Medicaid program by transitioning responsibility for dual eligible Medicaid costs to Medicare, while moving non-elderly low income persons into subsidized private gap insurance
  • Enable Medicare to become an active health care purchaser
  • Enact comprehensive medical malpractice reform
  • Adopt an overall cap on federal health care spending backed up with a tax-based fail-safe

I will expand upon some of these ideas and answer questions on them over the next few weeks.

We need both short term efforts to boost our economy and a plan to achieve a balanced budget in the long term; a central aspect of the latter will require more on health reform. The Affordable Care Act is the only reform vehicle we have. Both sides need a health reform deal politically, at least in part to take away the uncertainty of what the Supreme Court may rule on the individual mandate during an election year. The country needs a shift away from health reform being a political football to something that all “sides” have a stake in making work. The above policies are not perfect, but we don’t need perfect. We just need to get started. We will never be done with health reform.

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