In which Ezra Klein makes Avik Roy acknowledge why U.S. healthcare costs are so high

Avik Roy and Ezra Klein had a long --very long -- conversation about Roy's beefs with the Affordable Care Act. They covered "rate shock,"  minimum coverage standards, and Roy's dreams of a more fundamental system overhaul that would push everyone onto healthcare exchanges by privatizing Medicaid and Medicare and ending the employer tax deduction for health care benefit provision. 

Roy has been a relentless critic of the ACA. Having read some of his writings about it but by no means all, I was surprised to learn, as Klein probed his reaction to feature after feature, that he "do[esn't] have* a problem with standardizing benefits" and that "guaranteed issue [no refusals or cost bumps for preexisting conditions]is fine." His objections really boiled down to three: 1) he objects strenuously to "community rating," i.e., the ACA's limiting of the price differential between the youngest and oldest age cohorts to 3-to-1, as opposed to the roughly 6-to-1 ratio that Roy says the market would dictate.  2) He would like the exchanges to offer plans that cover even less than the lowest cost plans in the current design -- plans covering, say, 40% of a member's average yearly costs rather than the 60% that the exchange's lowest-run "bronze" plans are designed to cover. 3) As mentioned above, he would like more radical reform -- health exchanges for everyone.

As Klein eventually made Roy implicitly acknowledge, though, none of his favored solutions get at the root of the United States' disproportionate healthcare inflation.

Wydening the insurance exchange

Senator Ron Wyden has taken a slice out of the widely respected but off-the-table Wyden-Bennett health care reform bill, which would put all Americans in a national insurance exchange, to propose now that all Americans share the opportunity to opt into an insurance exchange:

I believe there is a way to work with the present employer-based system to guarantee that all Americans have choices, and I am proposing it in an amendment to the latest Senate health care bill. My amendment, called Free Choice, would let everyone choose his health insurance plan.

It would impose only one requirement on employers — that they offer their employees a choice of at least two insurance plans, one of them a low-cost, high-value plan. Employers could meet this requirement by offering their own choices. Or they could let their employees choose either the company plan or a voucher that could be used to buy a plan on the exchange. They could also simply insure all of their employees though the exchange, at a discounted rate.

Could this widening of the exchange pool serve some of the purpose of a public option, e.g., by providing critical mass to health care co-ops? And shouldn't that partial individualizing of the health care market appeal to Republicans?

Ezra Klein reports that Obama met with Wyden and Bennett as well as with Jay Rockefeller. Could a final bill staple together Baucus's deficit-reducing funding mechanism, the bigger subsidies that Rockefeller wants (as do liberal Democrats generally), and Bennett's "privatizing" amendment? Could compromise actually improve the bill that becomes law? We can dream, can't we?