Steve Parente: How to Cut Federal Health Care Spending
He calls it a “grand bargain”:
- End the tax preference for employer paid insurance and replace it with a much smaller individual tax credit.
- Transition Medicare to defined contribution program for those under age 54.
- Block grant Medicaid.
- Adjust several aspects of the Obama’s health reform law (end taxes imposed on device makers, insure that HSAs will be viable, etc.).
Good ideas.
I like Parente’s work. These are all good ideas. If I were adding to his wish list I might be tempted to forbid first-dollar insurance policies unless the first-dollar benefits were paid for through a personal health account like an HSA. Admitting that third-party payment is what’s causing much of our problems and forcing people to handle the dollars that pay for the care most people will receiving in a given year would go a long way to increasing transparency and reducing administrative costs.
One correction: I would use all of the money from the elimination of the employer exemption and create as large as possible refundable tax credit, but make it the same for everyone, regardless of income.
What about raising the Medicare eligibility age?
Where are repeal ObamaCare and end the individual mandate?
How will one “ensure that HSAs will be viable” when ObamaCare thoroughly controls the products that insurers can offer? Or when ObamaCare, with its implicit assumptin that the federal government should control how health care will be delivered and financed, exists at all?
I never have understood why people get a tax exemption for employer-provided health insurance but not for paying their own health insurance when self-employed. Parente’s ideas make good sense.