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Letters to health-care Santa: Bring back the death panels!

aaronh_portrait.jpgOver the course of this week, I'll be asking some health-care experts what they'd like Santa to add to the bill during conference committee, and publishing their responses on the blog. This edition comes by way of Henry Aaron, a senior fellow of economic studies at the Brookings Institution. A noted health-care expert, Aaron focuses on the reform of health-care financing; public systems such as Medicare and Medicaid; Social Security; and tax and budget policy.

I have three items — the second and third would, I believe, facilitate passage. All are comparatively marginal, as I think that spending time on major changes is irrelevant and unproductive, given the already horrendously difficult task facing those who are going to try to fashion a bill that can pass both Houses of Congress.

First, I would like to see the end-of-life counseling provisions restored to the bill. From a policy standpoint, it is not a major item, as end-of-life counseling already exists in embryonic form — George Bush actually signed it into law in the Medicare Modernization Act. But allowing a thoroughly scummy libel to kill such a benign policy is deeply offensive. It would be refreshing if members of Congress would stick a thumb in the eye of those who lie.

Second, I would like to see Paul Starr’s idea of replacing the tax on those who refuse to buy insurance with a simple exclusion from coverage for a specified period of those who elect not to have coverage. I’ll leave it to Paul to flesh out his own idea.

Third, I would base the tax on high-cost plans not on each company’s actual cost, but on the cost of each company’s plan as applied to a population of standardized age distribution. Actuaries can do such calculations quite readily. Such a tax would get at what really should be taxed — unduly generous plans — not plans that are high cost only because they apply to a particularly old population.

Earlier in this series, Diane Archer called for Congress to create national exchanges rather than state exchanges, Alain Enthoven offered some ideas for how to fix the exchanges, David Cutler proposed a soda tax, Austin Frakt argued for competition in the Medicare Advantage program, Jacob Hacker broached letting the public sector help the private sector negotiate lower rates, and George Halvorson tried to expand the exchanges to include providers of actual care rather than just insurance coverage.

By Ezra Klein  |  December 23, 2009; 7:05 AM ET
Categories:  Health Reform  
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Next: And the Californiacation of America continues


The first and third ideas are workable, but excluding from coverage those who choose not to have insurance is the moral equivalent of allowing exclusion of pre-existing conditions. It will lead to the very medical bankruptcies and care postponement problems that drove the creation of the healthcare bill in the first place.

Yes, rationally, the coverage exclusion would provide an incentive to have healthcare, but we're not rational beings, and a tax is a more fail-safe alternative.

Posted by: DanielColascione | December 23, 2009 8:08 AM | Report abuse

Interesting thoughts:

1. Yes, that was politicized.

2. Didn't read Paul Starr's idea, but this doesn't sound right. The tax would be best described as a "free-rider tax" rather than a penalty. Aaron is offering up something that practically can't be forced in any meaningful way, as only non-catastrophic care could actually be excluded for several months, as he proposed. That type of care 1) doesn't cost that much 2) will very rarely be the reason that people want to become insured. The reality as that the "free-riders" will want to enter the system when something pretty significant has happened, and care is going to be provided in that situation.

3) This is the type of idea that shocks me isn't part of the base case. Its like AMT not adjusted for CPI. Someone should lose their job from proposing an excise tax that doesn't have a number of fairly obvious adjustments.

Posted by: wisewon | December 23, 2009 9:39 AM | Report abuse

I think the 3rd idea lowers the amount of revenue generated, no? Isn't he saying we'll adjust for age (which, come to think of it, we should) with the excise tax and make sure we aren't penalizing firms that have higher costs as a result of older workers? That's a good point.

Also, the health affairs article on cadillac plans from a few weeks ago is also making me re-think some of the assumptions around the excise tax as well. I think it is gonna need some tweaking yet.

Posted by: ThomasEN | December 23, 2009 10:35 AM | Report abuse

On #2, what needs to be fleshed out is under the current bill how quickly will you be able to receive coverage when it is guaranteed issue with no pre-ex. Today you can go online and get a major medical policy in a matter of minutes, effective that very day. If this is still possible you can literally have people signing up on the ambulance ride to the hospital.

And like wisewon said on #3, it is unbelievable that it wasn't already designed this way. Geographical variation and age distributions make that rather arbitrary dollar limit for considering something a "Cadillac" plan almost meaningless.

Posted by: ab13 | December 23, 2009 10:36 AM | Report abuse

"unduly generous plans"
WTF does this mean? How can a plan be unduly generous?

Let's just get rid of the whole tax deduction for personal medical expenses once and for all.

Posted by: staticvars | December 23, 2009 12:25 PM | Report abuse

Yes, bring back the death panels, and make an effort to reclaim the framing:

"Yes, Virginia, there is a death panel. It's a panel of one person -- YOU!

You get to decide what end-of-life care you want to have. You get to tell your doctor your decision, and he or she must honor your decision.

You should meet with your doctor while you're still healthy to tell him or her what you want. This meeting is paid for by health benefits."

Posted by: billkarwin | December 23, 2009 12:54 PM | Report abuse

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