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.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Joseph
Antos

What's new on AEI

AEI Election Watch 2014: What will happen and why it matters
image A nation divided by marriage
image Teaching reform
image Socialist party pushing $20 minimum wage defends $13-an-hour job listing
AEI on Facebook
Events Calendar
  • 27
    MON
  • 28
    TUE
  • 29
    WED
  • 30
    THU
  • 31
    FRI
Monday, October 27, 2014 | 10:00 a.m. – 11:30 a.m.
State income taxes and the Supreme Court: Maryland Comptroller v. Wynne

Please join AEI for a panel discussion exploring these and other questions about this crucial case.

Tuesday, October 28, 2014 | 9:30 a.m. – 12:15 p.m.
For richer, for poorer: How family structures economic success in America

Join Lerman, Wilcox, and a group of distinguished scholars and commentators for the release of Lerman and Wilcox’s report, which examines the relationships among and policy implications of marriage, family structure, and economic success in America.

Tuesday, October 28, 2014 | 5:30 p.m. – 7:00 p.m.
The 7 deadly virtues: 18 conservative writers on why the virtuous life is funny as hell

Please join AEI for a book forum moderated by Last and featuring five of these leading conservative voices. By the time the forum is over, attendees may be on their way to discovering an entirely different — and better — moral universe.

Thursday, October 30, 2014 | 2:00 p.m. – 3:00 p.m.
A nuclear deal with Iran? Weighing the possibilities

Join us, as experts discuss their predictions for whether the United States will strike a nuclear deal with Iran ahead of the November 24 deadline, and the repercussions of the possible outcomes.

Thursday, October 30, 2014 | 5:00 p.m. – 6:15 p.m.
The forgotten depression — 1921: The crash that cured itself

Please join Author James Grant and AEI senior economists for a discussion about Grant's book, "The Forgotten Depression: 1921: The Crash That Cured Itself" (Simon & Schuster, 2014).

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled today.
No events scheduled this day.