Ryan v. ACA Can Help Provide Needed Clarity

There are two major problems with the health care system:

  • Cost. The health system is unsustainable, and health spending by the federal government, namely Medicare is the primary driver of the future budget deficit.
  • Coverage (uninsured). There are 50 some-odd million persons without insurance, and many more who are exposed to spells of no coverage due to the insurance/employment linkage.

The big idea of the Affordable Care Act (ACA) is to cobble together a coverage approach that moves us toward universal coverage (say 95% cover in a decade) while putting forth a variety of policies that attempt to slow the rate of health care cost inflation, both in Medicare and the private system.  It is an imperfect law, that represented what could get 218 votes in the House, 60 in the Senate and be signed by the President. Any replacement, or modification, will have to do the same.

Representative Ryan has put forth a budget, with some key health policy provisions, which is to his credit. It focuses immediate attention on the Medicaid program by fixing the federal expenditure via block granting, and proposes to transition Medicare toward a risk-adjusted defined-contribution voucher, beginning in a decade. His budget does nothing to address (seek to reduce) the number of uninsured persons in this country.  He calls for repeal of the ACA and takes the position that we cannot afford premium support and Medicaid expansions to increase health insurance coverage rates.  He does hold out hope that if costs slow, health insurance will become more affordable, but a sentiment is not a plan.  Len Nichols has written convincingly why seeking to slow costs without insurance expansions is not likely to be a successful cost containment strategy, either technically or politically.  However, a renewed health care reform discussion is an opportunity for much needed clarity. By producing a plan that can continue the health reform discussion, Rep. Ryan deserves credit.

The big question?

Will we seek to move ahead with the ACA which both expands coverage while trying to address costs in all parts of the health system (with the inevitable tweaks and changes to the law down the road), or will we instead to focus our policy attention on reducing the cost to the federal government of Medicaid (immediately) and Medicare (down the road) while doing nothing to expand health insurance coverage?  Our country really needs to decide, accept the consequences of the approach we prefer, and move ahead.

Who knows, maybe if the choice is clearly framed in this manner, a compromise on how to expand coverage  could be reached before the next election.  We have no hope of addressing costs so long as health care reform is a political football. We need a political deal on coverage so that we can move ahead aggressively to address costs. Addressing health care costs is a necessary, but not a sufficient condition to ever having a long term balanced budget.

Update: fixed a few things, and added a bit of clarification.

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