Comments on economics, mystery fiction, drama, and art.

Tuesday, December 20, 2016

As the Republicans consider how to "repeal and replace" the ACA

Jon Kingsdale, who is a faculty member at Boston University School of Public Health has written a post for Vox  in which he makes quite clear that the Republican pledge to "repeal and replace" the Affordable Care Act (a/k/a Obamacare) will be very, very hard to fulfill; you should read his critique.  But then we get this:

It sounds implausibly optimistic, but the only way out of this dead end may be for Republicans to reform the ACA, even as they claim to have done away with it. There are many ways to do this, but my favorite is to punt the issue to the states, as Sen. Bill Cassidy (R-LA) has suggested. The basic idea is to preserve most of the federal funding for the ACA, but vastly expand its state waiver provision, allowing each state to design its own replacement — or not — with its share of the federal dollars. States could enact mandates and market reforms that mirror the ACA (as Massachusetts did, before Obamacare existed), or modify them, or take entirely different approaches. Such approaches might range from Medicaid for all uninsured to high-risk insurance pools for those denied individual coverage.

Well, if you want "implausibly optimistic," this would be it.  The notion that creating 50--51, counting DC, and even more when we consider the territories (Guam, the Marianas, Puerto Rico...)--separate health care insurance systems is a solution truly boggles the mind.  One of the factors that has made the US economy as strong as it has historically been is the ease with which people can move in response to opportunities--better opportunities in the places to which they move.  As economist Timothy Taylor has pointed out, mobility has been declining, and quite rapidly, in the US since the 1970s (from more than 20% of the US population moving from one place to another in the 1950s and 1960s to 12% in recent years).  As he points out, we don't have a good grip (empirically) on why this is.  But, clearly, anything that raises the costs of mobility will tend to reduce mobility,

And being faced with the prospect of losing one's existing medical insurance, having to negotiate the process of re-acquiring new health insurance, being faced with inconsistent and perhaps conflicting requirement about such things as continuity of coverage will raise the costs of mobility.  The US economy would become just that much less flexible, that much less responsive to new opportunities, that much less entrepreneurial.* 

Far from devolving health care to the states, the truly realistic--albeit radical--solution is to move immediately to a single payer, unified system, with adequate (i.e., probably better than today's average) coverage being universal and consistent across geography, across income levels, and across age.  Moving to single-payer would, ultimately, mean the end of Medicare and Medicaid--they would no longer be needed.  It would end the issues involved with medical care being highly dependent on where one lives, or who one's employer happens to be (this week, or this year).  But making the system even more complex is a scary an idea.

Not as scary as what I am afraid the Republicans are likely to come up with, but that's a different, but perhaps more pertinent issue.

*The decreased rate of new business formation in the US--the decline in entrepreneurial activity--is a separate, but extraordinarily important issue.


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