Friday, November 12, 2010

More on Simpson Bowles and Health Care

Don Taylor thinks the deficit reduction plan does have real measures to control the growth in health care spending, which he details here. The main mechanism is a tweak of tax policy, limiting the amount of employer-paid health care that is tax deductible:
reforming the tax exclusion of employer paid health insurance is the policy option with the best hope of slowing health care cost inflation in the private portion of the system.
I view this as a bizarre way to approach the problem. Who will decide what is covered and what is not under plans if they have to be cut to fit under the cap? Likewise the draft report endorses setting an arbitrary cap on the growth of medicare spending, without specifying how the people who run medicare are supposed to achieve this. In other words, the plan's authors are asking somebody else to deliver the news about limits in care. Those limits, I guess, are going to be decided stealthily by obscure health boards and insurance compainies (death panels!) without any explicit public authorization or discussion. Trying to squeeze costs in this way will only intensify the battle among patients, providers, and insurers over who will pay which costs, while outraging the public. A recipe for disaster, in other words.

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