Bradley Herring, Ph.D.Bradley Herring, Ph.D.Johns Hopkins UniversityJohns Hopkins University

email: bherring@jhsph.edu email: bherring@jhsph.edu

May 2, 2009May 2, 2009

Alliance for Health Reform & Kaiser Family Foundation’s Alliance for Health Reform & Kaiser Family Foundation’s Commission on Medicaid and the Uninsured:Commission on Medicaid and the Uninsured:

“Covering the Uninsured: Options for Reform”“Covering the Uninsured: Options for Reform”

Potential Complications with the Potential Complications with the Different Approaches to Health ReformDifferent Approaches to Health Reform

Members of Divided We Fail -- a coalition led by AARP that includes the Business Roundtable, the National Federation of Independent Businesses and the Service Employees International Union and seeks to promote health care reform -- have become “divided over key elements of how to fix health care” as they “get down to the specifics,” the AP/Boston Globe reports.

According to the AP/Globe, although members “agree that something should be done to revamp health care in the United States” and have reached a “consensus on a vague set of general principles that include making coverage more accessible, affordable and efficient,” they “differ over important details, including what roles the government and private businesses should play.”

Kaiser Daily Health Policy Report posted February 17, 2009

Potential ComplicationsPotential Complications

• Ideology: – Private markets vs. government

• Special Interests: – Insurers, physicians, hospitals, drug companies, business

• Redistribution of Income: – How much? How complex?

• Consider These Four Options:– Single payer, McCain, Obama/Baucus, Wyden-Bennett

Single Payer: HR 676 Single Payer: HR 676

• The Underlying Appeal: – Elegant– Universal– Large reduction in administrative costs

• Potential Complications: – Who says no? – Taxes: employer/employee payroll taxes of 4.75% each;

repeal Bush tax cuts; additional 5% tax on top 5% of income and 10% tax on top 1% of income; 0.25% stock transaction

– Lower reimbursements to medical providers

McCain / Republican VisionMcCain / Republican Vision(Tax Reform, Individual Markets, Cross-State Purchasing)(Tax Reform, Individual Markets, Cross-State Purchasing)

• The Underlying Appeal: – Tax reform “can” improve efficiency and equity– Achieve a competitive market for health insurance

• Potential Complications: – Reductions in pooling across health status– High risk pools either expensive or underfunded– Reductions in consumer protections– High administrative costs in individual markets

(Candidate) Obama / Baucus(Candidate) Obama / Baucus

• The Underlying Appeal: – Built on the current system – least upheaval

• Potential Complications: – Built on the current system – fragmented – Who really pays under an employer mandate?– Does it have an individual mandate? Is it enforceable? – “Crowd out” with expanded Medicaid/SCHIP– Controversy surrounding the public plan option– Is this bipartisan enough to actually pass?

Wyden, Bennett, et al.’sWyden, Bennett, et al.’s“Healthy Americans Act”“Healthy Americans Act”

• The Underlying Appeal: – Bipartisan support– Grand compromise: markets w/ regulation, ample subsidies– CBO/JCT: breaks even after a few years

• Potential Complications: – Willingness of high-income people to redistribute?– Vulnerable Medicaid population folded into private plans– Defining the basic benefit package– Hardly anyone’s favorite: third place behind status quo?