About the Author

James C. Capretta

James C. Capretta

New Atlantis Contributing Editor James C. Capretta is an expert on health care and entitlement policy, with years of experience in both the executive and legislative branches of government. E-mail: jcapretta@aei.org.


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James C. Caprettaís Latest New Atlantis Articles

 Health Care with a Conscience” (Fall 2008) 

 Health Care 2008: A Political Primer” (Spring 2008) 

 The Clipboard of the Future” (Winter 2008)

 

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Text Patterns - by Alan JacobsFuturisms - Critiquing the project to reengineer humanity

Monday, June 3, 2013

Obamacare and the New Medicare Trusteesí Report 

The Medicare Trustees released their annual report on the state of the Medicare trust fund last Friday, and, not surprisingly, Obamacare supporters are already pointing to the report’s findings as evidence that the law is working. Such claims are nonsense, as I argue in a short post on National Review Online.

For starters, Medicare’s unfunded liability remains staggering — a full $43 trillion over the infinite horizon. That’s nearly $7 trillion more than the 2010 report.

Moreover, as was the case in every report from 2010 onward, Medicare’s actuaries have again told us that the real state of Medicare’s financial outlook is far worse than the official projections indicate. That’s because the cuts to Medicare contained in Obamacare are so irrational and blunt that they will almost certainly be reversed. Most especially, the actuaries expect the so-called “productivity improvement factor” will be reversed because of the damage it will do to access to care for seniors. That would be the provision in Obamacare that reduces the inflation update for most non-physician providers of services, especially hospitals. The cuts begin this year and continue every year, in perpetuity. If they are allowed to stand, they will push reimbursement rates for hospitals to levels that are so low they’ll fall below what Medicaid pays by the end of this decade. Medicaid’s rates, meanwhile, are so far below what private insurance pays that the network of hospitals willing to take large numbers of Medicaid patients is quite constrained. The actuaries expect that, by 2030, the cuts would push revenue for 25 percent of the nation’s hospitals below their total costs, leading many of them to withdraw from the Medicare program entirely.

You can read the rest of the post here.

posted by James C. Capretta | 12:06 pm
Tags: Medicare Trustees, Obamacare
File As: Health Care

Tuesday, May 21, 2013

Itís Not ďUniversal CoverageĒ 

Securing universal health insurance enrollment has been a major goal of American liberals for decades, and Obamacare aims to use the individual mandate to ensure that all Americans obtain health insurance. But as I explain in a column at National Review Online, even with the individual mandate Obamacare will fail to provide “universal coverage” for Americans, and will end up becoming just another expensive entitlement program.

In its latest assessment of the law, released in conjunction with new budget projections, the CBO indicates that the number of uninsured residents in the United States will never fall below 31 million — three million more uninsured people than was estimated for the non-mandate plan President Obama rejected — and that the insured will never be as much as 90 percent of the population.

And even that estimate is highly optimistic. It assumes that 70 percent of the population eligible for the Medicaid expansion will eventually enroll in the program. As of today, however, only 24 states have governors and legislatures that would likely agree to move ahead with expansion, and that number could easily fall as more state policymakers come to the realization that Medicaid is far too often failing its current enrollees. It makes little sense in that context to dramatically expand a program that credible independent observers believe needs significant reform.

You can read the rest of the column here.

posted by James C. Capretta | 3:09 pm
Tags: Obamacare, universal coverage
File As: Health Care

Friday, May 3, 2013

Winning the Obamacare Fight 

In a column published today at National Review Online I point out some steps that Congressional Republicans can take to not only push back against the worst aspects of Obamacare, but also to win the public argument over the future of American health care.

For the moment, the future of Obamacare isn’t a question of legislative tactics. It’s a question of political strategy — how to build a wave of public support behind a credible program to repeal Obamacare and replace it with something far better, and how to get that sentiment to prevail at the polls in 2014 and 2016. The excesses and deficiencies of Obamacare will go a long way toward convincing the public that there must be a better way. But the congressional GOP can and should also take steps to build its case and gain the upper hand in the argument. The bill to close down the prevention fund and apply some of the savings to a high-risk pool is one small step in that direction.

You can read the rest of the piece here.

posted by James C. Capretta | 12:13 pm
Tags: Obamacare, high-risk pools
File As: Health Care

Tuesday, April 23, 2013

More on Medicare Reform 

Yesterday, I was pleased to participate in a panel discussion sponsored by the Brookings Institution, entitled “Reforming Medicare: Fiscal Challenges and Policy Solutions.” The event was moderated by Bill Galston of Brookings and included — in addition to my remarks — presentations from Bob Reischauer of the Urban Institute, Chris Jennings of the Bipartisan Policy Center, Joe Antos of AEI, and Dr. Rhonda Randall of United Health Group.

The event was covered live by C-SPAN and can be viewed in its entirety here.

posted by James C. Capretta | 11:11 am
Tags: Medicare reform
File As: Health Care

Friday, April 19, 2013

Cost Estimates for an Obamacare Replacement Plan 

This week, the American Action Forum (AAF) released a white paper I co-authored with AAF’s President Doug Holtz-Eakin. The paper provides new insurance coverage and cost estimates for the Obamacare replacement plan I developed in collaboration with many other health policy analysts over the past two years. (The replacement plan was described in two published articles: the first, co-authored by Robert Moffit of the Heritage Foundation, appeared in the spring 2012 edition of National Affairs; the second, published as a white paper by the American Enterprise Institute, provided some additional details about the reform plan.)

The AAF cost estimates are encouraging. They show that a replacement plan built on a decentralized, market-based reform program can broaden insurance coverage dramatically without the massive federal power grab and mandates of Obamacare. This is an important development. It demonstrates that, contrary to the talking points of the 2010 law’s apologists, there are viable, practical alternatives to Obamacare that have the potential for broad appeal with the American people.

The emergence of AAF’s modeling capacity — the Health Economic Policy Simulation System (HEPSS) — is also an important advance. It means that a new source of credible analytical information is now available to the policy community, and more information about the cost and coverage consequences of various reform plans can only help to improve the caliber of the public debate. Moreover, the estimates produced by HEPSS will almost certainly differ from those produced by the Congressional Budget Office, the Urban Institute, and others because the HEPSS model uses different sources of data in some respects (including more extensive data on the use of high deductible health plans by employers) and because every model requires the use of some assumptions, and there’s no reason to expect the HEPSS assumptions to exactly match those used by CBO and others.

Obamacare is now being implemented, but that does not mean the debate over the future of American health care policy is over. Quite the contrary. Obamacare has far too many fundamental flaws for this debate to be over. At some point, the public will be receptive to hearing about alternatives to the current law, and opponents need to be ready with a fully developed answer. The paper released today is far from the final word, but it is another step in the right direction.

posted by James C. Capretta | 4:30 pm
Tags: Obamacare
File As: Health Care

Wednesday, April 17, 2013

Three New Papers on Medicare Reform 

Yesterday, I was pleased to participate in a public event at the American Enterprise Institute, focusing on the content of three papers released by AEI this week (generously sponsored by the Robert Wood Johnson Foundation). The first paper, which I wrote, is entitled “The Role of Medicare Fee-for-Service in Inefficient Health Care Delivery.” I argue in it that Medicare fee-for-service is the most important reason that American health care is inefficient, fragmented, disorganized, and costly. It will not be possible to bring about real reform without significant changes in Medicare’s basic financial incentives.

The second paper, written by Robert Coulam of Simmons College and Roger Feldman and Bryan Dowd of the University of Minnesota, examines the benefits of moving toward a competitive bidding approach for the entirety of the Medicare benefit package. Private health plans would submit bids indicating the premium they would require to provide Medicare’s statutory benefits, and those bids would be used, along with the costs of providing Medicare FFS in a region, to determine a fixed government contribution. The authors estimate that this approach would reduce Medicare’s costs by $339 billion over a decade.

The third paper, written by Joe Antos, makes the case for reforming Medicare with a premium support model, including competitive bidding. The paper cites existing models, including the Medicare prescription drug benefit, and other evidence to make the case that harnessing the power of consumer choice and marketplace competition is the only reliable way to discipline costs without harming quality.

The AEI event, which was moderated by Bob Helms, can be viewed in its entirety here. Paul Ginsburg of the Center for Studying Health System Change provided helpful comments.

posted by James C. Capretta | 2:12 pm
Tags: Medicare reform, AEI
File As: Health Care

Monday, April 15, 2013

Medicaid Overhaul Must Focus on Long-Term Care 

Over at Roll Call I have a column about what Congressional Republicans rightly seeking Medicaid reform can do to deal with the challenge of managing the long-term care component of the program.

Today, states try to manage long-term-care costs and quality through regulations and supply controls, but these efforts are never a match for the cost pressures that build when services are “free” to the users — and when rising use of services increases the incomes of those providing the services.

The solution is to enlist the support of those enrolled in the program in a cost discipline effort. The starting point is to calibrate financial assistance for long-term-care services and supports to the level of disability and financial needs of a Medicaid applicant. The most severely disabled applicants — as determined by an independent evaluator — with the lowest level of personal resources should get the maximum “allotment,” set at the level necessary to cover the range of support services needed to stay in the community. Other applicants with lesser disabilities or more personal financial resources would get a percentage of the maximum allotment commensurate with their circumstances.

You can read the rest of the piece here.

posted by James C. Capretta | 6:11 pm
Tags: Medicaid reform, long-term care
File As: Health Care

Friday, April 12, 2013

A Budget to Reject 

Over at National Review Online I have a column on why the Republican Party should not accept the president’s 2014 budget plan.

The president has repeated over and over again the slogan that a budget plan needs to be “balanced,” by which he means the spending cuts must be matched with comparable tax hikes. His own budget fails this test miserably. The only deficit reduction in it comes from a net $1.1 trillion tax hike over ten years (on top of the $0.6 trillion tax hike in the fiscal-cliff deal and $1 trillion in Obamacare). There are zero net spending cuts in the budget. Zero. When the “doc fix” for Medicare physician fees and a smaller change in Pell Grant funding are removed, as they should be, from the administration’s current-law baseline and placed instead with the other policy choices the budget reflects, the budget results in a net $10 billion spending increase over the coming decade.

Read the rest of the piece here.

posted by James C. Capretta | 10:43 am
Tags: 2014 budget
File As: Politics, U.S.

Thursday, April 11, 2013

The President's Budget Is No Move Toward the Center 

Over at the US News Debate Club blog I have a post arguing that the administration’s 2014 budget proposal is not the compromise that the president and his supporters are trying to sell it as.

To sum it up, the president's 2014 budget would result in massive tax and debt increases over the next decade, with no serious entitlement reform. The ten-year tax hike is $1 trillion, on top of the $0.6 trillion enacted in January and $1 trillion in Obamacare. But even with massive new taxes, the debt would still rise to $19 trillion in 2023, up from $5.8 trillion at the end of 2008. That's not the basis for striking any kind of deal with the GOP.

Read the rest of the post (and don’t forget to up-vote it!) here.

posted by James C. Capretta | 12:40 pm
Tags: 2014 budget, entitlement reform
File As: Politics, U.S.

Monday, April 8, 2013

Federal Grant Funding is Key to Medicaid Reform in Texas 

Arlene Wohlgemuth and I have an op-ed in this weekend’s edition of the Houston Chronicle on why federal block grants are the right way forward for Medicaid reform in Texas.

On both the acute and long-term care side of Medicaid, the program suffers from the same problems as the broader health system. Third-party insurance - in this case public insurance, poorly managed by the federal and state governments - creates distance between those providing care and those receiving it.

With the freedom that a block grant would afford, the state could use Medicaid funds to offer a version of "premium support," and subsidize the purchase of private insurance for non-disabled, non-elderly enrollees, who could choose an insurance plan from a competitive field. It is through this kind of competition that costs can be held in check.

You can read the rest of the piece online here, and those interested can look at our more detailed proposal on Medicaid reform in Texas here.

posted by James C. Capretta | 3:25 pm
Tags: Medicaid reform
File As: Health Care

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