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What Congress thinks is radical often isn't radical

Just heard Bill Clinton say that "if they would've created a public option to compete with insurance companies, it would've helped" save money in the health-care system. Meanwhile, a Federal Reserve staff paper opposing Blanche Lincoln's plan to spin derivative desks out of banks advised Congress to adopt the Volcker rule, which they say "better addresses the problem of risks from derivatives activities by prohibiting any bank, as well as any company that owns a bank, from taking speculative, proprietary derivative positions that are unrelated to customer needs."

When things get into Congress and folks decide that they'll fight over them, they begin to seem like they're radical. But oftentimes, they just aren't. It's the political system that's off-center, not the idea.

By Ezra Klein  |  April 28, 2010; 11:29 AM ET
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Just heard Bill Clinton say that "if they would've created a public option to compete with insurance companies, it would've helped" save money in the health-care system.


Didn't we see enough reports that showed that the premiums for the public option would be as expensive or MORE expensive than private health insurance?

Just paying doctors less does not save premiums it just cuts costs.

Let's do a nice little comparison of the HCR so far.

Private insurers are already by the boatload saying they'll be covering dependents to age 26 prior to Sept 23rd requirement and even asking self insured employers to do the same.

The Federal government is saying not until January 1st for its employees in the FEHBP.


Posted by: visionbrkr | April 28, 2010 11:47 AM | Report abuse

what congress "says" is radical often isn't radical

Posted by: GregSB | April 28, 2010 11:58 AM | Report abuse

Martin Wolf of FT has his column up with 7 suggestions / recommendations and few other options. Do you say our Congress is nowhere near radical to what those recommendations here?

In itself, Ezra what do you think of those prescription from Wolf of FT? Considering his deep influence on this debate, it will be valuable to know where we stand with regards to that prescription set.

Posted by: umesh409 | April 28, 2010 12:23 PM | Report abuse

And plenty of what the Congress thinks isn't radical, is painfully so, even if it isn't new. The example that comes to mind is the abortion restrictions in HCR-- not new, not particularly surprising, but radically conservative.

Posted by: WhatSpringDoes | April 28, 2010 1:33 PM | Report abuse

Speaking of the public option:

Having the government do asset rating is like the public option in health insurance. It would be something that competed with and constrained the private providers. If Moodys gave a AAA rating for a bond and the government service gave it a B rating -- or junk -- and the government provided perfect transparency of all records and reasoning freely on the internet as a public good, then certainly the market would take notice and question Moody's AAA rating.

If the government established a track record of regularly being a lot more accurate than the private agencies, then this would be a great incentive for the private agencies to improve to keep business -- And this could easily happen with the government having an incentive to be accurate rather than pleasing the company that pays for the rating, plus the government can have other advantages like economies of scale and better governance than a private corporation that's very opaque and diffusely owned.

Posted by: RichardHSerlin | April 28, 2010 5:09 PM | Report abuse

Something that could have saved a lot of money on health care would have been to scale up nationally the Maryland health cost containment system. That was what health economists said in a Post op-ed and an NPR interview.

Under the Maryland system, the state audits the books of hospitals and decides on their rates. Hospitals are not allowed to buy fancy equipment or start programs unless they can prove unmet demand. That keeps lightly used equipment bought for bragging rights from burdening hospital rates.

It also eliminates the negotiations on rates between hospitals and insurance companies. The rates are set for all payers.

It wasn't in the health care bill because of worry opponents would charge socialism. The system has worked in Maryland since the 1970's and has produced good results.

Hopefully, one of those committees of experts set up to make improvement proposals will propose doing it.

On the issue of derivatives, what they should do is forbid settlement in cash. That would require settlement to be in the security or commodity involved, would guarantee that the derivatives market could not get bigger than the real market (and in fact would be smaller and not many times the real market as at present), and would not allow people to hedge against securities they did not own.

Posted by: StanKlein | April 28, 2010 11:13 PM | Report abuse

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