Monday, June 26, 2017

The CBO on the Senate Health Plan

I have followed this year's health care debate with some care, because I think 1) American health care is a mess, 2) Obamacare is somewhat helpful but no kind of solution, and 3) I agree with some libertarians in finding the whole insurance model a bizarre way to pay for anything, guaranteed to add fantastically to the cost.

So I've been wondering if Republicans would come up with anything helpful. Not expecting that they would, mind you, just curious.

I think the answer is supplied by the Congressional Budget Office in their analysis of the Senate plan. The Senate plan rescinds Obama's Medicaid expansion and substitutes tax credits that are supposed to help the working poor buy private insurance instead. The CBO finds that the private insurance likely to be offered on the Senate's terms will be so expensive and so useless (deductibles up to $6,000/year) that "few low-income people would purchase any plan." Plus the law repeals Obamacare's ban on pre-existing condition bans, so these folks won't be able to get insurance if they do get sick, so they're screwed all around.

As a theoretical construct, it makes sense to me that the way to limit health care costs is to have people pay more of the cost out of their own pockets; a model in which the patient pays none of the bill and doctors get paid more the more care they provides seems like a golden road to spiraling costs. The problem is that American health care is so expensive that without massive government help, a third of the country simply can't afford it. Therefore the Senate's cuts mean millions more will go without.

I suppose a real libertarian would say that while this hurts in the short term, it is what we need because it will lead to the proliferation of cheap "minute clinics" and the like that poor people could actually afford. There is something to this; within my lifetime most hospital patients slept in wards rather than private rooms, which cost a lot more. But I can't see it working; cheap health care would require a revolution, not just in health care, but in our whole social expectation that doctors will be well-paid experts. We would have to eliminate all the limits on who can practice medicine, and do away with medical malpractice claims, and probably a hundred other things. And I still don't think we could do it.

The only way to provide health care to poor Americans is massive government subsidies. The Republicans have had their chance now to show that this isn't true, and they have not come up with any solution. Cutting the subsidies means less care, no matter how you try to hide it.


Unknown said...

How would you (or a libertarian) combine people paying out of their own pockets with doctors being paid based on how much care they provide? I suppose you could have doctors be the salaried employees of corporations who take in money from customers--but that's rather similar to the university model, and university costs have been spiraling too. Plus, the corporation would earn more, the more care it provided. So that system would simply displace who is earning more for more care.

Unknown said...

Err, what I meant was, how would you combine people paying out of their own pockets with doctors NOT being paid based on how much care they provide?

John said...

Something like the old HMO model I guess; you pay a certain amount per month for all the care you need.