Both Sides Still Need a Deal

The Republican Party suffered a spectacular political defeat yesterday when they pulled their AHCA legislation from the House floor, after all the words they spilled the past 7 years. Speaker Ryan said the ACA is the law of the land, and President Trump said that Democrats will want a deal to improve the ACA within a year.

On December 16, 2010 I first blogged that “Both Sides Need a Deal” and laid out a set of big ideas that I claimed would emerge in a deal if the two sides negotiated in policy good faith. I even wrote a book that more fully laid out what a health reform deal would look like, and said it was the crux of a sustainable federal budget. Last Sunday, Ross Douthat, maybe sensing the outcome of yesterday, wrote that a catastrophic insurance program loosely based on Singapore would be the best way forward for Republicans. This column reminded Reihan Salam of my pitch from several years before.

Deal’s between Democrats and Republicans seem impossible politically, but the structure of our system of government makes them a feature, and not a bug. At some point we will have to return to that type of equilibrium. And both sides really do need a deal to achieve more of what they want. I want to re-emphasize 3 of the big ideas from my original proposal and add a fourth in the hopes of starting a conversation, perhaps only with myself.

• Replace the individual mandate with federally-guaranteed, universal catastrophic insurance coverage and sell private “gap” insurance in state-based exchanges, with income based subsidies
• End the Medicaid program as we know it by transitioning full responsibility for dual eligible Medicaid costs to Medicare, and moving non-elderly and disabled low income persons into subsidized private gap insurance
• Modify the tax preference of employer paid health insurance, and replace the cadillac tax with this provision
• Not in my original proposal, but we should provide some help in purchasing health insurance to persons in the individual market, but whose incomes are too high to qualify for tax credits under our current system; it will help the risk pool and high income persons get a subsidy via the tax treatment of Employer coverage

I am a policy guy, and the policy is crucial (I wrote in 2014 what some of the above ideas could look like for one state–North Carolina to try some of this via an ACA waiver). What I have proposed above is a bit more grand, but it seems that a big deal may paradoxically be easier to obtain than a small one, particularly around the issue of Medicaid. Precisely because there is a no “best way” to address health policy, the politics are particularly important if we are to ever develop a sustainable health care system. A quote from my 2012 book in Chapter 7 sums this up for me:

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.

I will do some follow up posts on the policy aspect of the imperfect ideas above. I am happy to engage in dialogue if anyone is interested.