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

Making Ryan's tax plan smarter
image The teacher evaluation confronts the future
image How to reform the US immigration system
image Inversion hysteria
AEI on Facebook
Events Calendar
  • 01
    MON
  • 02
    TUE
  • 03
    WED
  • 04
    THU
  • 05
    FRI
Wednesday, September 03, 2014 | 9:00 a.m. – 10:30 a.m.
From anarchy to Augustus: Lessons on dealing with disorder, from Rome’s first emperor

We invite you to join us for two panel discussions on how Augustus created order from chaos 2,000 years ago, and what makes for durable domestic and international political systems in the 21st century.

Wednesday, September 03, 2014 | 12:00 p.m. – 1:30 p.m.
Multiple choice: Expanding opportunity through innovation in K–12 education

Please join us for a book launch event and panel discussion about how a marketplace of education options can help today's students succeed in tomorrow's economy. Attendees will receive a complimentary copy of the featured book.

Thursday, September 04, 2014 | 12:00 p.m. – 1:30 p.m.
How conservatives can save the safety net

Please join us for a luncheon event in which our panel will discuss what conservatives can learn from how liberals talk and think about the safety net and where free-market economics, federalism, and social responsibility intersect to lift people out of poverty.

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