The Daily Item, Sunbury, PA

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November 9, 2013

Health law's defects the price of bad politics

(Continued)

Despite the current outcry, the reformers will be forgiven for all this if the plan ends up working. Remember that its main purpose — to widen access — is compelling. For that reason alone, it deserves to succeed, and with running repairs, it still might.

However, it has flaws the country hasn't yet grasped. It fails to achieve fully universal coverage. (The emerging Medicaid gap, caused by states failing to expand eligibility, compounds that problem.) Instead of simplifying the financing of U.S. health care, the reform makes it even more complicated by providing means-tested subsidies in the form of tax credits. Its defense against getting too many sick people and not enough healthy ones in the risk pool is questionable: The penalties for opting out may be too mild. Above all, its cost controls are so far statements of intent, not incentives embedded in the design.

These are all aspects of the compromise that the Obama administration thought it had to strike with public opinion. Rather than attempting to replace the employer-based model at a stroke, the Democrats bolted new bits and pieces on to a badly broken system. "Medicare for all" would have been one way to solve or ameliorate all of the problems I just mentioned — but the White House calculated that the country didn't want government-run health care. That was no doubt correct, and the past few weeks are unlikely to have changed the country's mind.

But there are other and better possibilities. The approach I'd like some future administration to take in building a simpler and more effective system would be based on vouchers. Every American would get a voucher entitling them to standard insurance coverage, with no exclusions for pre-existing conditions. Private insurance companies would compete for their business. The value of the voucher would be risk-adjusted to remove the insurers' incentive to avoid riskier patients.

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