Making Savings Count
The problem of affordability is, put simply, a problem of money. The more dollars that health-care reform either generates or saves, the more money that can easily be funneled towards affordability. The problem is that a lot of the best sources of revenue have been taken off the table and a lot of the potential savings aren't being scored by the Congressional Budget Office.
But therein lies the opportunity.
Everyone from the White House to Max Baucus to Henry Waxman will explain, at great length, that the CBO is not sufficiently counting the savings in health-care reform. They'll point to CBO's record of underestimating savings in health system tweaks, and point to outside analyses showing substantially larger savings embedded in the bill's provisions. But if CBO won't score those savings, then for the purposes of health-care reform, they simply don't count.
Health policy experts David Cutler and Judy Feder, however, have an innovative proposal for making them count. In a paper for the Center for American Progress, they argue for the implementation of "failsafe" policies — crude, surefire interventions — that will kick in if the expected savings don't manifest. Limiting the growth of Medicare payments, for instance. Increasing the excise tax on insurers. Moving the public plan towards Medicare rates.
You can think of a dozen with little trouble. But if you kept them looming behind the curtain — the Oddjob to your Goldfinger — in the event that the expected modernization savings didn't manifest, it would make the anticipated savings visible to CBO, and free up money for affordability. Moreover, it would make those savings more likely to manifest, as insurers wouldn't want more of tax on their heads and hospitals wouldn't want lower rates, and so there would be more of an incentive to implement some of the softer, gentler reforms.
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