Friday, November 08, 2013

The ACA as a framework for (further) conservative healthcare reform

Austin Frakt does AEI's James Capretta the honor of seriously considering* elements of Capretta's attempt (with Douglas Holtz-Eakin) to fill in the long-empty "replace" blank in Republicans' purported "repeal and replace" program for the Affordable Care Act. After spotlighting various lacunae as well as potentially workable elements in Capretta's "decentralized, market-diven alternative to the PPACA," Frakt comes to a core point, implicitly questioning whether conservative healthcare wonks are acting in good faith:
6...Democrats are well aware of the limitations and problems with the Affordable Care Act. Some are so troubling that the administration is considering some interesting proposals that would require Congress to act. Point being, there is leverage for some negotiation on some aspects of the law. And, crucially, some of the things Capretta has proposed fit within the structure of the ACA, such as allowing Medicaid enrollees to buy exchange plans (see Arkansas), capping the employer-sponsored insurance tax subsidy (see the Cadillac tax), or making exchange plans more catastrophic. But that brings me to …

7. Exchanges are key. There is no conservative proposal that doesn’t rely on exchanges. Where is the full-out, bipartisan support for their implementation? It’s hard to perceive it through the din of “repeal."

8. Repeal is for campaigns, not for governing. There will be no repeal, a point Capretta almost concedes and one I accept as obvious. The law is not going to fully fail, even if it is not a smashing success. More to the point, repeal is not the best way to achieve conservative reform. Any reform would have to offer a navigable glide path from what is to what will be. You don’t get there through repeal. You don’t fight disruption with more disruption! You achieve reform through gradual transition, which is not to say there won’t be any disruption, but to say that it must be delivered in digestible doses.
Frakt's plea is reminiscent of a core complaint voiced by Ezra Klein in a marathon one-on-one roundtable discussion with relentless ACA critic Avik Roy:
So this is the other side of the balloon here, right, because I think if somebody read your writings, right, they would say you hate this goddamn bill. Like you’re not one of the people who’s a repeal dead-ender on this, so to speak, but you’re very negative on it. You think it’s a bad bill. You would have liked to see it repealed. I mean I think it’s more that you’ve accommodated to the reality of it as opposed to you support it.

And then you talk here and it’s like well, the Bronze plan is kind of almost where I want it to be. It’s 5%, 10%, and maybe I’d like to see a slightly different approach to age rating, but that would obviously bring some other issues you’d have to deal with in terms of how do 55-year olds get insurance, maybe you subsidize them more. I don’t know what you do there. But it doesn’t sound that far. And this goes to something that I’ve always found is sort of fascinating about this bill.

Back in the day when we’d talk about the Swiss system, if we were talking about how do you take a first step towards it, something like this bill, like what Mitt Romney, a candidate you advised (although not when he was running for governor) did in Massachusetts, or what Senate Republicans proposed in the 90s, would have seemed like a good step. And I get having issues with this bill and wanting to sort of set the dials in different places from where it is. Frankly, I have a bunch of those issues myself, and in some ways I’d probably go a little bit lower on the actuarial value as well.

When I talk to you here, the vehemence of it seems a little bit surprising, and the focus only on the folks who will pay more. It actually seems like you have a significant zone of agreement.
Ultimately, Klein cast an even sharper spotlight on Roy's free market nostrums and selective idealizing of the Singapore Healthcare system by forcing him to admit that the common denominator in national health systems that control costs more successfully than the U.S. (i.e., all of them) is not free-market principles but government control over the costs of medical treatments and drugs. But I digress.

The point here is that whatever conservative ideas have any merit only have the potential to improve American healthcare within the framework of the ACA -- itself a "conservative idea" based, for better or worse, on a free market architecture conceived and first implemented by conservatives and Republicans (and which they dream, or profess to dream, of importing into Medicare, and in fact have already incrementally done so via Medicare Advantage).  If their interest is improving the American healthcare system rather than merely scoring political points, the ACA is a hospitable framework.  The last word belongs to Frakt:
Since the ACA is the law and the Capretta proposal is a few white papers, perennial gridlock and status quo bias are not working in conservatives’ favor.

That could change. But I doubt it will change by convincing even moderate Democrats to repeal the law. The right approach, in my view, is to recognize that ACA proponents want to amend the law. Conservatives interested in governing ought to work with them on that as a means of finding vehicles to change the law in ways that might be appealing both to Republicans and moderate Democrats.

Meanwhile, save “repeal” for the campaign. It may be how you’ll get elected (in some districts), but it’s no way to govern.

*Frakt considers Capretta's plan in the context of Ross Douthat's suggestion that the plan might point a path to health reform less "disruptive" than the ACA. The Frakt-Klein complaint spotlighted above applies also to Douthat (naturally, since he's retailing Capretta's plan), who argues that a relatively low cap on the employer healthcare deduction would be more inherently just and less disruptive than the ACA's restructuring of the individual market, because it's  "more humane to expose the already-subsidized to more of the real costs associated with their expensive insurance than it is to tell the persistently-unsubsidized that their most affordable insurance options are being outlawed, and that they are now required by law to pay more for more coverage." This complaint glides over the fact that the ACA does include a cap on the employer deduction (though Douthat is honest enough to acknowledge it) and will only cause new affordability problems for a small sliver of the population, a flaw that should be fixable. Again, the conservative preferences cry out for an attempt at incremental reform: lower the cap, and perhaps (for example) expand the catastrophic plan option that the ACA extends to adults under age 30 to anyone who wants it -- or anyone who is exposed to higher monthly costs by the cancellation of their current plan.

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