Increase Consumer Choice

The House bill will accelerate health spending, not slow it down. It relies on higher taxes (featuring the "millionaire’s tax" that has no impact on health spending) and Medicare cuts that do little to change fee-for-service incentives--but that are unlikely to be taken when future Congresses come eye to eye with elderly constituents and their health care providers.

The Senate can do better. The key is promoting smarter purchasing and smarter medical practice, not easy-to-score budget cuts that keep intact payment and delivery methods that have produced unaffordable health care.

Here are some suggestions:

  • Reform the tax break for health insurance. Best option: cap the exclusion and extend it to everyone, not just those who buy coverage through their employers. The Finance Committee's tax on so-called Cadillac coverage is a second-best policy that penalizes rich and poor equally.
  • Give consumers better insurance choices. Open up state insurance markets to competition. Support value-based insurance design. Provide risk-adjusted subsidies for insurance.
  • Create price and value transparency. Patients need to know the cost and likely effectiveness of their treatment options--and so do their physicians. Collect real-time information about treatments and outcomes to inform clinical decisions.
  • Let competition work in Medicare. Require real competitive bidding among private Medicare Advantage plans and traditional Medicare. Move to bundled and performance-based payments to promote efficiency.

Joseph Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at AEI.

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About the Author

 

Joseph
Antos
  • Joseph Antos is the Wilson H. Taylor Scholar in Health Care and Retirement Policy at the American Enterprise Institute (AEI), where his research focuses on the economics of health policy — including the Affordable Care Act, Medicare, the uninsured, and the overall reform of the health care system and its financing. He also studies the impact of health care expenditures on federal budget policy.

    Before joining AEI, Antos was assistant director for health and human resources at the Congressional Budget Office (CBO). He has also held senior positions in the US Department of Health and Human Services, the Office of Management and Budget, and the President’s Council of Economic Advisers. He recently completed a seven-year term as health adviser to CBO, and two terms as a commissioner of the Maryland Health Services Cost Review Commission. In 2013, he was also named adjunct associate professor of emergency medicine at George Washington University.

    Antos has a Ph.D. and an M.A. in economics from the University of Rochester and a B.A. in mathematics from Cornell University.



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