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.


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)


 More on James C. Capretta

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

Tuesday, December 13, 2011

Out and About 

Last month, I had the opportunity to speak at several meetings on the subject of the relationship of health care to the nation’s medium and long-term fiscal challenge. Two of those sessions were video recorded and are available for viewing on the Internet for those who might be interested.

The first of the recorded sessions, at the Paul Merage School of Business at the University of California at Irvine on November 4, can be viewed here. The slides I used for my presentation are available here.

The second recorded session, at a meeting of the Association of Washington Business (the Chamber of Commerce for Washington State), in Seattle on November 15, can be viewed here. The slides I used for this session in Seattle (very similar to the ones used at UCI) are available here.

posted by James C. Capretta | 1:27 pm
File As: Health Care

Thursday, December 8, 2011

The Case for Reforming Medicare with Premium Support 

Over at economics21, I have a new paper on how Medicare can be reformed with a concept known as “premium support”:

To see the value of premium support as a reform concept, it is necessary to understand how Medicare works today, and especially the role that Medicare plays in today’s inefficient arrangements for delivering health care services.... The primary problem is that health care in this country is highly fragmented and uncoordinated. In the main, physicians, hospitals, clinics, labs, and pharmacies are autonomous, financially independent units. They bill separately for the services they render to patients, with very little need to coordinate with anyone else in the system. The result is an incredible level of duplication and waste, overemphasis on procedure-based medicine, as well as burdensome paperwork, excessive bureaucracy, and a lack of accountability for the all-too-frequent cases of low quality care....

Premium support provides a ... vision for how to bring about “delivery system reform.” Instead of relying on the government’s capacity to re-engineer how doctors and hospitals are organized and provide care, premium support relies on a decentralized process of consumer choice and vigorous price and quality competition among the plans providing coverage as well as among those providing services directly to patients. The idea is to give the program’s participants strong financial incentives to gravitate toward arrangements that can deliver high quality care at the lowest possible premium.

You can read the full paper here.

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

Monday, November 21, 2011

Super Committee, Super Confusion 

The "super committee" looks poised for failure — which is a much better outcome than some of the deals that were being floated in the last few weeks. As I wrote on NRO last week:

Recent news stories have suggested that the GOP members have offered to raise taxes by $300 billion over the coming decade as part of a deal that would also include some reductions in entitlement spending. But once again, the entitlement changes will do nothing to change the basic, cost-inflating structures of Medicare, Medicaid, or Obamacare. Indeed, if the GOP were to strike such a deal, it would make it that much harder to do what really needs to be done, which is to replace the entire health-entitlement status quo with reformed programs that rely on cost-conscious consumers in a functioning marketplace.

Moreover, the deal that is apparently under consideration would also rely on Senate Finance Committee chairman Max Baucus to write the actual tax and entitlement legislation, along with his GOP counterpart in the House, Dave Camp. This is hardly a process that builds confidence, as Baucus was a primary architect of the massive government overreach that is Obamacare. Indeed, if the supercommittee’s contribution to deficit cutting is to cede power back to the regular committee process, one has to wonder, what was the point of having the committee at all?

You can read the whole piece here.

posted by James C. Capretta | 11:14 am
Tags: super committee, taxation, entitlement reform

Wednesday, November 2, 2011

Letting the Super Committee Fail? 

I have a new columm up at e21 on the prospects for success of the Joint Select Committee on Deficit Reduction:

The problem is not that the two sides can’t put on the table broad budget parameters that look good on paper (although Republicans will never agree to the kind of tax hike the Democrats are now calling for). The problem is that everything breaks down when the negotiations go from broad and general to the specific....

By all accounts, the super committee has made no progress in conquering these large obstacles to a “grand bargain” on the budget.

That being the case, some in Congress are pushing for a smaller, more incremental deal from the committee, to demonstrate to the markets and the ratings agencies that the American political system isn’t entirely broken. Fine, if it can be done. But under no circumstances should a deal which merely tinkers around the edges and does not fundamentally reform the tax code and entitlement programs be billed as anything but a temporary Band-Aid.

In truth, what is really holding back the super committee is that it does not have a mandate from voters to do what needs to be done. That’s going to take another election, in 2012.... 

You can read the full column here.

posted by James C. Capretta | 3:20 pm
Tags: super committee, budget
File As: Health Care

Monday, October 24, 2011

The End of CLASS 

I have a new article in The Weely Standard on the recently canned part of Obamacare called CLASS:

CLASS (for Community Living Assistance Services and Supports) is a voluntary long-term care insurance program that hitched a ride on Obamacare. The program was set up to charge participants premiums for at least five years before they became eligible for benefits​—​meaning that, as the program commenced, there would be several years of premium collection before any meaningful expenditure.

This turned out to be awfully convenient timing for the White House, as it created the perception of a $70 billion, 10-year CLASS surplus that was used to make Obama-care’s overall books look better.

Counting CLASS in the Obamacare totals was an abuse for two reasons. First, as Ryan pointed out, the same dollar can’t be spent twice. But that’s exactly what the White House wanted to do. They said CLASS’s $70 billion surplus could be used both to pay for Obamacare and to liquidate CLASS Act obligations after ten years.

That was bad enough. But the problem was even worse because CLASS itself was a ticking budgetary time bomb, and the administration knew it.

You can read the whole article here.

posted by James C. Capretta | 11:28 am
File As: Health Care

Thursday, October 20, 2011

World CLASS Contortions 

And so the CLASS Act whitewash begins.

Ever since the Obama administration announced last Friday — in the late afternoon — that it was “suspending” implementation of the CLASS (Community Living Services and Supports) Act, Obamacare’s apologists have been twisting themselves into knots to explain away this embarrassing episode as no big deal.

Leading the way has been Washington Post blogger Ezra Klein. In his account of CLASS’s demise, Klein suggests that the voluntary long-term-care-insurance program ended up in Obamacare pretty much by happenstance, and certainly through no fault of any living Democrat (he points the finger mainly at the late Sen. Ted Kennedy). Klein says the Obama White House was actually publicly cool to the program — and privately hostile. Indeed, according to Klein, the most important reason the program stayed in the final bill was Republican senator Judd Gregg’s amendment, offered in committee, which required the Secretary of HHS to certify that the program could be financed on a self-sustaining basis from participant premiums before it could be launched. Once that amendment was adopted, the budgetary arguments that had been raised against CLASS had been addressed, and then inertia and an unwillingness to undo Senator Kennedy’s final legislative initiative led to its eventual enactment.

Klein also suggests that last week’s White House decision to suspend CLASS implementation is not evidence of failure. Rather, it’s a sign of fiscal sobriety and an unyielding commitment to implementing only what works, and not what doesn’t.

Finally, with regard to the Congressional Budget Office, which estimated in March 2010 that CLASS would produce a $70 billion surplus over the first ten years of Obamacare, Klein again sees no reason for finding fault. Yes, CBO said there would be a short-term surplus from CLASS, but they said all along that there would be long-term deficits from the program too, which the administration has now confirmed. Therefore, Klein concludes, CBO was essentially right about CLASS all along, and the rest of its Obamacare estimate can be trusted to be accurate as well.

Based on Klein’s account of what transpired, one might be tempted to hold up the whole CLASS episode not as a failure, but as a perfect example of good liberal governance. Certainly the New York Times sees it that way. This week, the editors praised the administration for its “wise” but difficult decision to kill the program.

And yet, it’s hard to shake that nagging feeling that Klein and the New York Times haven’t quite gotten this story right. And why is that?

Perhaps it’s because there was never any shred of evidence that CLASS could ever be made sustainable. Not before enactment, and not since. Indeed, any fair reading of the analyses that were done on the concept prior to its passage would conclude that CLASS was hopeless. And it wasn’t a close call. The program was so far from being actuarially sound that it could never be fixed without fundamentally changing how it worked. It is simply not possible to pay a pay-as-you-go long-term-care benefit to the disabled unless millions upon millions of healthy Americans are forced to pay premiums somewhere in the range of $100 to $200 monthly — for a benefit none of them really wants. There was no way the Obama administration was ever going to propose this, because to do so would have been political suicide.

And so, instead, it chose to pretend that a solution might be out there, somewhere, despite all evidence to the contrary.

This was rather convenient for the White House because, as it happened, the $70 billion in supposed CLASS Act “surplus” was just what the doctor ordered for making the deceptive argument that Obamacare was good, not bad, for the federal budget. More than half of the deficit reduction claimed for the final bill came from those bogus CLASS savings. That turned out to be key in convincing the final wavering Democrats to vote yes on the legislation.

CLASS’s enactment was no accident of a chaotic and uncontrolled legislative process. It was a deliberate and cynical ploy to put a phony veneer of fiscal restraint on top of a massive tax-and-spend program. The administration and its allies certainly knew all along that a day of reckoning would come. But they didn’t care; they staked so much on the passage of Obamacare that they had a win-at-any-cost mentality. And now that they have admitted that tens of billions of dollars in deficit reduction that they promised will never materialize, they aren’t the least bit apologetic.

What remains most perplexing in this whole episode is why CBO played along with the CLASS charade. They had access to all of the same actuarial data as everyone else. Their own numbers showed the program was unstable beyond ten years. The Gregg amendment gave them the perfect excuse to conclude that CLASS would never be launched because it could never be viable without massive taxpayer subsidies. And yet they kept showing the $70 billion ten-year surplus in their estimate.

Among the many questions about this sorry episode that are worth pursuing, the role of CBO is surely one.

[Cross-posted at National Review Online.]

posted by James C. Capretta | 3:38 pm
Tags: CLASS Act
File As: Health Care

Tuesday, October 18, 2011

The Reconciliation Option 

Over at National Review Online, I have a new column up on a special budgetary procedure known as “reconciliation,” which was mentioned by Mitt Romney and Rick Santorum at last Tuesday’s Republican presidential debate as an option for repealing Obamacare:

If, in the 2012 election, Republicans are able to maintain control of the House, pick up the majority in the Senate (a real possibility) but not a 60-vote supermajority, and win the White House (looking more possible by the day), the GOP would be in position to set in motion a reconciliation bill to repeal and replace Obamacare — and they wouldn’t need any Democratic cooperation to make it happen. The fact that leading Republican presidential candidates have now said that reconciliation is an option is a big deal, as it makes it very clear to all concerned that there is a clear path to victory for Obamacare opponents.

Seeing the threat that the reconciliation option could pose, Obamacare’s apologists have responded by suggesting it would be the height of cynical partisanship for Republicans to undo Obamacare in this fashion, since reconciliation supposedly played only a minor role in the enactment of Obamacare. Obamacare’s defenders also claim that, in any event, the GOP may not be able to pull it off because some aspects of Obamacare are non-budgetary and therefore aren’t eligible for repeal in a reconciliation measure, which is supposed to deal exclusively with budgetary matters. Sen. Kent Conrad, the Democratic chairman of the Senate Budget Committee, took the argument further and said that using reconciliation for repeal would be inappropriate because reconciliation is supposed to be used fordeficit-cutting efforts — and Obamacare’s full repeal would increase the deficit, according to the Congressional Budget Office (CBO).

As usual, there’s a lot of smoke and misdirection in these arguments, and not much clarity....

You can read the whole column here.

posted by James C. Capretta | 1:01 pm
Tags: Obamacare, repeal and replace, reconciliation
File As: Health Care

Monday, September 26, 2011

No Entitlement Reform in the Presidentís New Proposal 

I have a new column up at e21 on the president’s latest budget proposal:

This plan wasn’t aimed at building bridges to the GOP or helping the Joint Committee come to an agreement. It was aimed at drawing sharp contrasts between the parties and positioning the president going into the 2012 presidential campaign. In that regard, it seems to have worked. The already very wide partisan divide now prevalent in Congress only widened further in the last week. In this highly charged environment, the odds that the Joint Committee will come to a grand tax-entitlement bargain are exceedingly low.

But perhaps that is just as well. Because it is also quite clear from the president’s latest health care proposals that serious entitlement reforms — the kind that would actually make a difference and would be worth striking a “grand bargain” to achieve — aren’t in the cards before the November 2012 election....

You can read the column in full here.

posted by James C. Capretta | 12:31 pm
Tags: entitlement reform, Joint Committee
File As: Health Care

Thursday, September 22, 2011

The Presidentís Bad Budget Moves 

I have a new column up at National Review Online on why the president’s actions on the budget are bad for himself and the country:

...inexplicably, the president has decided once again that he would rather preserve his political talking points for 2012 than achieve bipartisan legislation. There is no other way to interpret his highly partisan proposals on jobs and the budget. Once again, his speeches and legislative initiatives have earned hallelujahs from the liberal faithful, but they have doomed the prospects for bipartisan compromise. Indeed, it’s clear from the president’s threat to veto any deficit-cutting legislation that doesn’t raise taxes that he wants the supercommittee to fail. And the demise of the supercommittee would almost certainly mean there won’t be any jobs package either....

You can read the whole piece here.

posted by James C. Capretta | 11:33 am
Tags: President Obama, budget, jobs
File As: Health Care

Monday, September 19, 2011

Itís Not Just About the Individual Mandate 

I have a new Weekly Standard article on the need not to focus exclusively on the individual mandate in undoing Obamacare:

Obamacare’s individual mandate — requiring that all Americans purchase government-approved health insurance beginning in 2014 — has always been the law’s most vulnerable provision. It is incredibly unpopular, and not just among conservatives. Polls consistently show that a large majority of the electorate opposes it, including a good portion of registered Democrats....

[However], even if the Supreme Court were to strike down the mandate, much of the rest of the law would almost certainly remain in effect. That’s unacceptable. Obamacare without the mandate is nearly as bad as Obamacare with it.

In the end, the fate of Obamacare will almost certainly be decided in the political and legislative arena, not the courts, and the 2012 election is likely to be the decisive battle in that regard. Keeping this in mind, Republicans and conservatives should be doing all they can to make the 2012 election another referendum on the damage Obamacare will do to the American economy and health system....

You can read the whole article here.

posted by James C. Capretta | 2:04 pm
Tags: repeal, individual mandate, Supreme Court
File As: Health Care

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