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. Capretta’s 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, October 15, 2013

Jumpstarting Entitlement Reform 

Replace Obamacare's Flawed Medicare ACOs with a Better Model

If the White House and Congress want to make a serious effort at entitlement reform, they should begin by bringing more consumer choice to Medicare, which could be done by replacing Obamacare's Medicare accountable care organizations (ACOs) with a model that provides more consumer choice, as I explain in a new column at e21.

There are far better ways to encourage the spread of high-quality integrated care networks in Medicare.  The fastest, surest way would be to create a level competitive playing field with Medicare’s dominant FFS insurance system. This is the premise of the “premium support” model of Medicare reform. Under premium support, private insurance options—the MA plans of today, plus whatever new models may emerge—would compete directly with the government-administered FFS option on a regional basis, and the beneficiaries would select their coverage from the competing plans. Importantly, the government’s contribution to coverage would not increase with higher priced insurance.  That means the beneficiaries would have to pay more for expensive plans.  The result would be strong incentives for enrollment in options that offer high value at reasonable cost -- exactly what well-run integrated systems of care could offer.

You can read the rest of the column here, and for more on Medicare ACOs,  you can watch this AEI video where I explain what they are and why they won't work as defenders of the Affordable Care Act expect them to.

posted by James C. Capretta | 2:14 pm
Tags: accountable care organizations, Medicare reform
File As: Health Care

Wednesday, October 9, 2013

Beware the Pivot to a ‘Grand Bargain’ 

In the ongoing debate over the government shutdown and the upcoming negotiations over the debt ceiling, Republicans should continue to focus on extracting concessions on Obamacare, rather than “pivoting” to a more general debate over the budget. As I argue in a column at National Review Online, the implementation of Obamacare is going to continue to face serious problems that will make opposition to Obamacare the right choice both politically and as a matter of policy.

No doubt the speaker and his allies are looking for an end-game strategy on the CR and debt-limit fights that has a chance of producing a modest victory for the GOP. That’s understandable. But, at this point, they are better off sticking with the fight they already started over Obamacare than with pursuing broader budget talks that could easily backfire.

Ironically, the odds have improved in recent days for extracting concessions on Obamacare from the White House and Senate Democrats. This has nothing at all to do with the shutdown and its political effects and everything to do with the slow-motion fiasco that is the Obamacare rollout. The continued dysfunction at the healthcare.gov website is confirmation that the law was not ready to be implemented. And the problems are not limited to the inability of curious citizens to see the insurance options. It is also apparent that the systems are not properly transmitting the required data to the insurance companies to successfully enroll people in coverage. If these problems persist, there could be thousands of people come January 1 who think they have signed up for insurance but have not yet successfully done so.

You can read the rest of the column here. And for those interested in hearing more about the problems with the implementation of the Affordable Care Act, my former colleague from the Office of Management and Budget, Keith Fontenot and I discussed the law's implementation on C-SPAN's Washington Journal on Saturday, October 5th.

posted by James C. Capretta | 11:10 am
Tags: Obamacare, shutdown
File As: Health Care

Thursday, October 3, 2013

CBO’s Long-Term Budget Projections 

The Outlook Is Even Worse Than It Looks

Last month, the Congressional Budget Office released its annual update to its long-term budget projections, and as I explain in a post on the Health Affairs blog, the unsustainable debt and deficits forecasted by the CBO are due to the familiar causes of growing entitlement spending, especially in health care.

The cause of the soaring deficits and debt is familiar:  rapid increases in entitlement spending (on top of the five decade run-up that has already occurred), driven by the aging of the population, rapidly rising health care costs, and spending associated with expanded health entitlements under the Patient Protection and Affordable Care Act (PPACA).  CBO expects that 54 percent of the federal spending increase on the major entitlements over the next twenty-five years will be attributable to the aging of the U.S. population.

Twenty-eight percent of the increase will be due to “excess cost growth” in health care – meaning cost escalation per capita in excess of GDP growth per capita.  The rest of the spending increase is due to the expansion of Medicaid and the new premium credits enacted in the PPACA.  When looking at just the health care entitlements, 40 percent of the federal spending increase is due to excess cost growth, 35 percent from population aging, and 26 percent from the PPACA program expansions.

You can read the rest of the post here.

posted by James C. Capretta | 12:41 pm
Tags: entitlements, debt, deficit
File As: Health Care

Wednesday, October 2, 2013

Win the Argument 

How the GOP Can Get the Upper Hand

In a column at The Weekly Standard, I argue that Republicans should use the budget debates over the government shutdown as a chance to argue for a delay of the Affordable Care Act's individual mandate.

The political and substantive case for a delay in the individual mandate is compelling.  On a political level, what politician wants to defend giving a one-year break to corporate America but not to the little guy?  That’s exactly the position Democrats are now in, and the GOP can swing public opinion their way by making this the central theme of their public case.  In the coming days and weeks, there will be no shortage of opportunities for GOP members and Senators to go on TV, and they should use every chance they get to pound the message home with voters that the Democrats are the ones protecting businesses but not workers.

Substantively, the case is just as strong.  The administration has delayed enforcement of the employer mandate for a year, which means some workers will not get an offer of coverage at their place of work.  Because the individual mandate is still in place, they will have to go into the exchanges to get insurance or pay the uninsured tax.  In two states, New Hampshire and West Virginia, there’s only one plan being offered in the exchanges.  In other states, there are very few choices.  Is it really fair to force American to buy insurance from one insurance carrier, or limit their choices to even two or three plans?  The administration says it will start enforcing the employer mandate in 2015, which means many workers who were forced into the exchanges in 2014 will be forced out of them in 2015 when they get offered employer plans.  Does disrupting insurance like this make any sense?  The GOP should make these points to show that a delay of the employer mandate necessitates a commensurate delay of the individual requirement.

You can read the rest of the article here.

posted by James C. Capretta | 10:53 am
Tags: Obamacare, individual mandate, delay
File As: Health Care

Friday, September 20, 2013

Some Progress on Premium Support 

Medicare premium support, the entitlement reform plan that has been part of budgets passed by the House Republicans in 2011, 2012, and 2013, was harshly criticized during the last election, with the president repeatedly, and falsely, claiming that the plan would “end Medicare as we know it.” But, as I explain in a column at National Review Online, a new report from the Congressional Budget Office shows that premium support would not undermine Medicare benefits, even though it would be effective at cutting costs.

The CBO’s new analysis concludes that, depending on the specifics of the reform, it would indeed be possible to build a program that moderates federal costs and eases premiums for beneficiaries. For instance, under a premium-support model that used the average of premium bids by region (weighted by the size of the insurer’s beneficiary enrollment) to determine the government’s contribution, federal spending would drop by 4 percent relative to current law and beneficiary premiums would fall by 6 percent.

The key change in the CBO’s assessment: They forecast that intense price competition would cause the private insurance plans to submit bids that are 4 percent below the bids they would submit under today’s Medicare Advantage program. That’s a big difference, given that Medicare’s total per capita costs are expected to approach $12,500 in 2020. This assumed reduction in costs from private insurers would mean an even wider cost gap than the one that already exists between today’s Medicare Advantage plans and the traditional fee-for-service (FFS) program. CBO’s assessment leaves no doubt that private plans, properly run, can deliver Medicare benefits at far lower cost than the existing fee-for-service plans in most regions of the country.

You can read the rest of the column here.

posted by James C. Capretta | 11:37 am
Tags: premium support, CBO
File As: Health Care

Thursday, September 19, 2013

More Good News as the Medicare Drug Benefit Approaches Ten Years 

Contrary to the expectations of its early critics, the Medicare prescription drug benefit has been very successful at using market forces and consumer preferences to keep the cost of drug coverage down over the past decade. In a column at e21 I argue that, instead of bringing more government regulation to the drug benefit program, as the Obama administration is planning, the market-based model of the program should be used as a model for how to reform the rest of Medicare.

new paper from Doug Holtz-Eakin and Robert Book of the American Action Forum documents the compelling record of the drug benefit. For starters, the primary objective of those who authored and pushed for the enactment of the program has been met, which is ensuring access to prescription drugs for America’s seniors. About 90 percent of the Medicare population is now enrolled in a drug plan of some sort. Most beneficiaries get their coverage through one of the private plans competing directly for enrollment within Medicare, but a sizeable portion of Medicare enrollees also get good coverage outside of Medicare through retiree benefit plans. The law facilitated the continuation of these plans.

And the beneficiaries like what they are getting. Surveys of beneficiaries since the program was implemented have consistently shown high consumer satisfaction with the drug benefit plans offered through the program. The most recent survey indicates that 92 percent of Medicare beneficiaries enrolled in a drug plan are satisfied with their coverage, with 58 percent indicating they are “very satisfied” with their current plan.

You can read the rest of the column here.

posted by James C. Capretta | 12:18 pm
Tags: Medicare
File As: Health Care

Thursday, September 19, 2013

Health Spending Projections from the CMS 

Yesterday, Health Affairs released the annual projections of national health expenditures (NHE) from the Office of the Actuary at the Center for Medicare and Medicaid Services (CMS). In conjunction with the release of the new projections, Health Affairs asked the lead CMS author, Gigi Cuckler, to provide an overview of the new forecast in a “Health Affairs Conversations” podcast. The journal also asked Princeton University economist Uwe Reinhardt and I to provide some commentary about the CMS projections following Ms. Cuckler’s remarks.

An important takeaway from these new projections is that the CMS Office of the Actuary finds no evidence to link the 2010 health care law to the recent slowdown in health care cost escalation. Indeed, the authors of the projections make it clear that the slowdown is not out of line with the historical link between health spending growth and economic conditions.

Furthermore, to the extent anything fundamental has changed in health care over the last decade, the most likely source of the shift is the steady movement toward higher deductible and consumer-driven health insurance. The authors of the projections note this trend as an important development in employer-sponsored health care.

The entire podcast (about fifty minutes) is available here.

posted by James C. Capretta | 11:35 am
Tags: CMS, projected costs

Monday, September 16, 2013

The Play Should be Delay 

While there is widespread recognition among conservatives that the Affordable Care Act should be their chief target in the fiscal debates between now and the end of the year, there is some disagreement about whether Republicans in the House should seek to delay or defund the health care law. In a piece in The Weekly Standard, Jeffrey Anderson and I argue that, for both political and substantive reasons, delaying rather than defunding Obamacare is a wiser strategy.

A push for a full-year delay of other major provisions is thus seen not as an unusual and politicized concept but rather as a reasonable response to the reality on the ground. A recent Kaiser poll asked whether Obamacare’s opponents “should continue trying to change or stop it, so it has less impact on taxpayers, employers, and health care providers,” or “should accept that it is now the law of the land and stop trying to block the law’s implementation.” By a 20-point margin—53 to 33 percent—respondents said that Obamacare’s opponents should keep trying to impede its implementation. In other words, Americans don’t think Republicans should just sit by and watch Obamacare go into effect.

The notion of defunding Obamacare gets a very different public reaction. While essentially every poll taken over the past three-and-a-half years has shown that Americans want to see Obamacare repealed, they don’t want to see it defunded. Rather, polls show that Americans oppose defunding Obamacare by large margins—ranging from about 20 to 30 percentage points. Over the past two-and-a-half years, Kaiser has taken eight polls on defunding. On average, those 8 polls have shown 29-point opposition to defunding—61 to 32 percent.  A CBS News poll that showed 18-point opposition to Obamacare (51 to 33 percent) showed 20-point opposition to defunding it (55 to 35 percent).

You can read the rest of the article at the Weekly Standard’s website here.

posted by James C. Capretta | 2:37 pm
Tags: Obamacare
File As: Health Care

Monday, August 26, 2013

Reforming Medicare Integrated Care 

One of the core provisions for “bending the cost curve down” contained in the Patient Protection and Affordable Care Act (PPACA) are the Medicare accountable care organizations (ACO), which are intended to serve as integrated health plans that will be able to deliver health care more efficiently than the current Medicare fee for service model. But, as I argue in a new AEI research paper, these ACOs do not allow for genuine consumer choice, and because they continue to rely on the fee for service payment model, they are unlikely to deliver on the health care savings that they are supposed to provide.

Private-sector efforts to build high-performing health systems around the country are making real progress in some cases and should be given the room they need to succeed. But this is not the same as saying the ACO program under the PPACA is a success or that it will be successful down the road, which is very unlikely to be the case.

Fortunately, the shortcomings of the ACO model in the PPACA need not be the end of the story. It remains important to encourage the development of more integrated and cost-effective care within Medicare. And that goal can be achieved by replacing the flawed ACO model of the PPACA with a more workable approach based on incentivizing the formation of high-quality plans and on allowing the beneficiaries to share in the cost savings such plans would produce.

The rest of the paper can be read online here.

posted by James C. Capretta | 9:53 am
Tags: Medicare, accountable care organizations, managed care
File As: Health Care

Monday, August 5, 2013

The Soft Underbelly of Obama­care 

One of the challenges facing opponents of Obamacare has been that there is so much wrong with the law, it can be difficult to choose a single target to focus on. But as Yuval Levin and I explain in an article in The Weekly Standard, the individual mandate, one of law’s most important provisions is also one of its most problematic and unpopular.

The law’s champions have always considered the individual mandate to be the indispensable provision. It is what allows them to make the only boast they really care to make, which is that the law—in their estimation—will deliver on the long-sought goal of “universal coverage” (which now appears to mean covering all but 30 million people in our country). And it is what allows them to attempt to transform the purchase of government-sanctioned health insurance from just another consumer choice into a social obligation, if not a legal decree.

Of course, the mandate has already ceased to be the obligation that Obamacare’s architects wanted it to be. In his landmark ruling in NFIB v. Sebelius last summer, Chief Justice John Roberts found that Congress did not have the authority under the commerce clause to make the purchase of health insurance obligatory. The only way the “personal responsibility” requirement was found constitutional was as a tax on the uninsured: Citizens can either purchase insurance or pay that tax. Both options are perfectly permissible under the law. Indeed, the Roberts decision suggests that Congress could never raise the tax very much because that would tip the balance away from providing a genuine choice to imposing a de facto obligation to buy coverage.

The rest of the piece can be read online here.

posted by James C. Capretta | 10:23 am
Tags: Obamacare, individual mandate, Yuval Levin
File As: Health Care

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