Comments on NYT Health Overhaul Primer

The New York Times ran a nice primer on the details of health reform. Based on what I learned, I oppose the overhaul in its present form. Here are some points

The claim that the reform will not affect existing insurance is an out-and-out lie.
The House bill sets limits on deductibles and copays. The Senate bill allows plans outside the limits to be grandfathered in, with no new contracts made outside the limits. If either bill passes, if I want insurance against very expensive illnesses, I will need to buy insurance against trivial expenses too. This matters because it will bring insurance companies into the deals I make with my healthcare providers on small expenses. Bringing another party to table just complicates things and increases inefficiency.

Because of incentives and penalties for employers, about 3 million more people will go on employer-captive insurance plans.
We will have to see more details as the legislation congeals. In general, employer-captive limits people’s right to buy the insurance they want and are a bad thing.

An additional 10 million people would enroll in Medicaid.
This is very good. The point should be to provide healthcare to people who can’t afford it. Medicaid is program tasked to do just that. There are more than 10 million people without adequate healthcare. Hopefully they will be picked up by other elements of the package.

Overhaul will attempt to be deficit neutral.
This is very good. I don’t mind the surtax as long as it doesn’t cause marginal rates to exceed 45%.

The plan will massively cut Medicare.
After watching the battle with Gingrich in 1995 over this issue, it is ironic that the Democrats want to cut Medicare more than Republicans did in ‘95. I thought it was lame that Republicans called it “saving Medicare” instead of cutting Medicare. I am unclear as to whether these proposed cuts would be used to ensure Medicare’s long-term solvency or so that Medicare tax monies could be used for non-Medicare programs. Medicare’s long-term solvency is an important issue. Democrats should be honest with people, though, that cutting the budget 40% will result in at least some decrease in services.

I support only the part of this plan that makes more people eligible for Medicaid. The vast majority of people should handle their own expenses and pay reasonable taxes to help the needy. Yes, people might not do a perfect job of buying healthcare, but the government doesn’t always do a perfect job either. In life, just as in engineering, you have to accept some inefficiencies.