2012 election

Health Policy After The Election

I have a post on the Health Affairs blog today about what the results of the election will mean for the policy debates over American health care.

No one should underestimate the difficulty of bridging the deep divide between the parties on health care, which is mainly a disagreement over how best to slow the pace of rising costs.  One side favors empowering the federal government to impose more cost controls, while the other side wants to put consumers in functioning marketplaces in the driver’s seat.  In deliberations over restraining projected federal budget deficits, these different visions are sure to collide.

This does not mean that bipartisan agreement is beyond reach.  It isn’t.  Indeed, if ever there were a moment for bipartisan accord, this is certainly it.  There are big problems that must be confronted — problems that are difficult if not impossible for one party to ever fix by itself.  The president, with re-election behind him, will have every reason to make 2013 a highly productive legislative year because his power will only diminish with time.  And House Republicans want to demonstrate to voters that they are as interested in governing as in checking the excesses of the administration.  So it would not at all be surprising to see both sides show more flexibility in the coming year than they have shown in the past.

The rest of the column is online at the Health Affairs blog.

posted by James C. Capretta | 6:40 pm
Tags: 2012 election
File As: Health Care

The Turnaround Washington Needs

Michael D. Scott and I co-authored a column in e21 today on how important it will be for the next administration to face up to the challenge of fixing our federal government’s broken finances, and why Mitt Romney is the man for the job.

Job one for the next president must be to fix the U.S. government’s broken financial model. If a private business had such cash losses and accruing liabilities, the turnaround team would seek immediately to cut costs and renegotiate the contracts creating the problems. The same must be done with our general budget, Social Security, Medicare, Medicaid, and federal employee commitments. Current retirees and those near retirement can be protected. But benefit promises to future entrants must grow no faster than the revenue collected to pay for them. One option could include moving from today’s defined benefit commitments to defined contribution obligations, much like the shift from formula-driven pension payments to 401k’s in the private sector. This is especially important in Medicare, as defined contributions can foster the market discipline necessary to slow the pace of rising health care costs.

Beyond the entitlement programs, the federal government is in desperate need of a top-to-bottom review and reform. Unproductive programs must be shut down. Activities more appropriately handled by the states or by the private sector should be transferred or terminated. Duplicative federal activities must be consolidated. And federal agencies must be forced to deliver better value at less cost, just as every business must do to stay competitive.

The U.S. government is the most systemically important and inter-connected entity in the world; its financial solvency is critical for our citizens, businesses, and other governments. Because of its outsized importance to the global economy, the federal government cannot afford to sow seeds of doubt about its ongoing financial viability.

You can read the rest of our column here.

posted by James C. Capretta | 11:07 am
Tags: 2012 election

Debating Pre-Existing Conditions

I have a column today at National Review Online about how Romney's health care plan will help people with pre-existing conditions find insurance.

Under current law, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) ensures that workers can easily move from one employer plan to another without fear that their new coverage will exclude a pre-existing condition or that their new plan will increase premiums based on their elevated health risks. However, HIPAA does not provide solid protection for people who move from employer coverage to an individually owned insurance plan. In theory, HIPAA required states to set up options for those people with continuous insurance coverage and a pre-existing condition who want to move into the individual market from group insurance. In practice, those options do not prohibit insurers from charging much higher premiums based on the elevated risks of the enrollees; and, in any event, the law requires people who might enroll in such plans to first exhaust their COBRA rights with their previous employer plan. (COBRA is a program through which former employees pay premiums into their former employer’s health plan for up to 18 months after being separated from the firm.) The upshot is that HIPAA’s protections simply do not work in the individual-insurance market, and that is a big, not a small, problem.

Romney’s plan would fix this and extend to the entire health system, including the individual market, the HIPAA protections that work well today in the group market. This would allow millions of people to move seamlessly from group to individual coverage, and back again, so long as they stay continuously insured. That alone will dramatically reduce gaps in coverage that are so frequent today.

You can read the rest of the column here.

posted by James C. Capretta | 10:36 am
Tags: pre-existing conditions, 2012 election
File As: Health Care

The Candidates' Positions on Medicare Advantage

I have a post at The Hill’s Congress blog explaining what the Obama administration’s cuts to Medicare Advantage will mean for seniors, and why Governor Romney’s proposal will build on the success of Medicare Advantage rather than undermine it.  

The president targeted Medicare Advantage for big cuts in the 2010 health care law to partially pay for the large entitlement spending also provided in the law. Over the next ten years, these cuts will reach $308 billion, according to the Congressional Budget Office. That these cuts will affect Medicare beneficiaries is indisputable. According to the most recent Medicare Trustees’ Report, enrollment in Medicare Advantage will peak in 2013 at 13.7 million people and then fall to 9.7 million in 2017. Four million seniors will thus get pushed out of the Medicare Advantage plan they prefer as a direct consequence of the Obamacare cuts.

You can read the rest of the post here.

posted by James C. Capretta | 12:50 pm
Tags: Medicare Advantage, 2012 election
File As: Health Care

The Medicare Distortions

I have a column up at National Review Online about the dishonest attacks over Medicare on the Romney-Ryan campaign by the Obama campaign and its apologists.  

To begin with, those attacking Ryan have resorted to silly name-calling (“VoucherCare,” “CouponCare”) in an attempt to discredit the idea of Medicare premium support. But premium support — which, by the way, has a long bipartisan history, including support from Democratic senator Ron Wyden — cannot be considered a “voucher” program any more than the prescription-drug benefit in Medicare is a voucher program. Under the drug benefit, the federal government accepts bids from private insurers wishing to offer coverage to the beneficiaries. The government’s contribution toward coverage is based on the weighted average of those bids. Every beneficiary in a given market area is entitled to the same level of governmental support. The government provides an organized format to assist the beneficiaries in their choice of plans. And once a beneficiary decides on a plan, the government’s contribution is sent directly to the insurer. No voucher is ever issued. That’s exactly how a Wyden-Ryan premium-support plan would work in the rest of Medicare.

You can read the rest of the article here.

posted by James C. Capretta | 11:25 am
Tags: 2012 election, Medicare
File As: Health Care

What to Say about Health Care

I have a column in the latest issue of National Review (payment required to view online) on how the Romney-Ryan campaign can offer Americans a compelling alternative to Obama’s health care plan.

It has also helped the Romney campaign tremendously that Ryan is carrying much of the load. He knows these issues cold, because he is a prominent budget expert, and health care in general, and Medicare specifically, are central to the nation’s long-term budgetary troubles. Ryan’s adeptness in debating the topic was on full display at the February 2010 White House “summit” on health care, during which Ryan dismantled the phony deficit-reduction claims the president and congressional Democrats were making about Obamacare.

The challenge for the Romney-Ryan ticket is to channel the political momentum generated by this early Medicare counterattack into a larger conversation about broad visions for health care. Although Obamacare remains unpopular, it will be difficult to uproot it without articulating a compelling replacement strategy that can solve the problems in the health-care sector without Obamacare’s massive expense and heavy-handed government coercion. Here again, Ryan will be indispensable, because he has become one of the party’s most articulate and persuasive advocates of a patient-driven health-care system.

You can find the rest of the article here.

posted by James C. Capretta | 2:02 pm
Tags: 2012 election
File As: Health Care

Why health care is the essential issue for 2012

Over at The Weekly Standard, I have a new article up with National Affairs editor Yuval Levin on the importance of health care reform to the 2012 election:

The outlines of ... reform have been clear for some time. What’s needed is a functioning marketplace in health care, with cost-conscious consumers seeking and finding more value for their money. To get there, the government must stop subsidizing excess in all of the major health care settings ​— ​Medicare, Medicaid, and employer-sponsored plans. Instead, the government should provide fixed levels of financial support toward insurance and care that patients can control. The government would oversee the marketplace, but resources would be allocated based on consumer choices and preferences.

This reform would bring costs under control and head off the impending fiscal crisis. But it’s not simply a fiscal reform. It would also transform American health care for the better. Health care and insurance providers would have to become far more efficient and productive to avoid losing market share to competitors, and they would be forced to focus on the needs and desires of patients, not government payers.

For Republicans committed to maintaining a vibrant and free society, there is no choice but to make genuine health care reform the centerpiece of their domestic agenda. If the health care debate is lost, then the fight for limited government is lost as well.

That means that the effort to repeal and replace Obamacare and to fix our health care entitlements must be well underway by 2013. And that, in turn, means that a Republican president must be elected in 2012 having run on a platform of real health care reform. For those who aspire to be that Republican president, the time to develop that platform is now.

Read the full article here.

posted by James C. Capretta | 12:40 pm
Tags: health care reform, 2012 election
File As: Health Care

The President Canít Run on Obamacare

On Obamacare’s first anniversary, let’s give the president his due: It wouldn’t be in law today without his persistent push for its passage.

Not that his policy arguments carried the day or were persuasive. They weren’t. No, in the end, Obamacare was passed because the president had so tied his political fate to it that it became quite literally impossible for most members of his party in Congress to oppose it. And so it passed.

Other presidents have staked their presidencies on early legislative initiatives too, and then used their success in securing their enactment to aid their reelection. President Reagan certainly comes to mind in that regard, with his 1981 tax cut featuring prominently in his 1984 campaign. And Bill Clinton made his tax-hike and deficit-reduction plan of 1993 the centerpiece of his economic message in 1996.

The problem for President Obama, however, is that, unlike the Reagan tax cut, Obamacare will do almost nothing worth running on before 2012. The main selling point for the law — the supposed “universal coverage” proponents erroneously say the law will deliver — doesn’t kick in until at least 2014. That’s when the “big bang” of Obamacare comes into play: the individual and employer mandates; the new entitlement expansions; and the one-size-fits-all insurance plans.

Between now and then, there’s a lot of regulation to be issued, but there won’t be any real action on the ground where Americans get their health care (other than some tax increases and Medicare cuts the administration will never mention anyway). And so the law’s apologists are left with nothing to talk about except the supposed “early benefits” of Obamacare, like coverage of 26-year-olds on their parents’ plans and the new high-risk pools for those with pre-existing conditions.

But these provisions are minor matters in the scheme of things. They certainly did not require a 2,700-page bill to address. And so few Americans have benefited from them that they hardly register at all in the public consciousness. Only about 12,000 people have signed up for the poorly constructed risk pools, and no one expects the other insurance regulations to help more than a tiny percentage of the population. For most Americans, these “early benefits” are simply non-events. If the president were to feature them as large achievements of his presidency in 2012, it would strike most voters as the trumpeting of the trivial.

With so little to work with, and intense opposition among those pushing for repeal, the president is unlikely to feature Obamacare at all in his 2012 campaign, and certainly not in the way Reagan touted his 1981 tax cut in 1984. President Obama will no doubt defend the new health law from every attack, even as he tries to deflate the repeal push with minor concessions. But, having exhausted his first term securing passage of Obamacare, the president will have to find some other rationale to justify requesting a second term.

posted by James C. Capretta | 2:21 pm
Tags: 2012 election, President Obama, Obamcare, risk pools, taxes
File As: Health Care