Let's Put A Health Insurance Program in Place that Voters Will Want to "Mend Not End"

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One of the few certainties about health reforms to be enacted soon is that they won't repeal the law of unintended consequences.  As President Obama has suggested, there will be need for further tweaks to compensate for surprises.

           

The important thing is to put the program in place and to do so in a way that maximizes the chances voters will say "mend it, don't end it" when the problems surface.

           

For a start, we can have a high degree of confidence that most of the cost and revenue figures being thrown around now are wrong - and some of them will be wildly wrong. Estimates by the Congressional Budget Office and Office of Management Budget are good-faith efforts to predict the future.

           

The reliability of such estimates decline as the time frame grows - anything over five years is pretty squishy - and precedents grow rarer - an important caveat about any strategy for reining in medical costs.   Estimators can come up with reasonably reliable guesses of what a one-cent gas tax hike would yield next year.   But asking what a new and improved health system will cost a decade hence is really pushing the envelope.

           

In the health area, bad estimates have been the norm.  The initial cost of Medicare was grossly underestimated.  More than a few analysts suspect initial passage would have been in doubt had Congress known what the actual costs would be. 

           

But once the program was in place, there was no turning back.

           

More recently cost estimates for the Part D drug benefit were wildly off in the other direction.  Had Congress had more reliable data, it could have created a more expansive program with the allocated dollars.

           

The important thing is not to make a mistake that elicits an "end it, don't mend it" response and there's no evidence so far to believe we're moving in that dangerous direction.  We've been there before, also, and it wasn't fun.

           

In 1988 Congress enthusiastically passed Medicare drug and catastrophic coverage that was embraced by President Reagan. In 1989, Congress overwhelmingly voted to repeal this program, delaying the drug benefit for nearly 20 years, and President Bush signed that.

           

Opinions differ on precisely what happened.  I find conspiracy theories an attractive explanation, but people were willing to listen.  That's at least partly because Congress took the rare step of delaying benefits until revenues were on hand to fund them. 

           

It seemed fiscally responsible at the time, but resulted in a situation where people were paying without getting any immediate benefit in return, a dangerous situation in our instant gratification culture.

           

The dessert-first plan now under consideration reverts to the more typical pattern of providing new benefits in the short run, and (hopefully) paying for them in the long run with efficiencies that no one fully understands yet.  The revenue transfusion needed to bridge these two eras is why there's so much focus now on estimates.

           

This strategy will probably inoculate us against a replay of the Medicare catastrophic debacle but also raises the odds that mid-course corrections will be needed later

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