Two by Two

Two important events: President Bush brought eight small business owners ? including a restaurateur from Maryland and a pest control specialist from Florida ? to an event at the White House on Wednesday to explain his health agenda and how it will help small business. Greg Scandlen and I had front-row seats and were impressed with his personal commitment to strengthen the private market for health insurance and to use market-forces rather than government to solve problems in the health sector.


Also on Wednesday morning, the Senate Health, Education, Labor, and Pensions Committee held hearings on ?Health Care Spending and the Uninsured.? Highlights:


? Gail Wilensky of Project Hope emphasized that cost drivers, like advances in medical technology, medical liability, medical errors, and lifestyle issues (such as smoking and obesity), all ?are exacerbated by the current reliance on employer-sponsored health insurance? that encourages increased and even excessive spending on health care. Further, the tax subsidy is inequitable and provides more generous subsidies to higher-income workers.



? Duke University Prof. Christopher Conover described preliminary findings of a study he is conducting that shows ?the net burden of health services regulation likely exceed the annual cost of covering all 44 million uninsured. So a legitimate policy question is whether the benefits of regulation outweigh the benefits of coverage for all Americans.? Halleluiah!


? CBO Director Doug-Holtz Eakin emphasized that ?The uninsured population is constantly changing as people gain coverage and lose coverage? for many different reasons. ?The varying characteristics of the uninsured should be kept in mind when developing policies to expand insurance coverage.?


Earth to single-payer advocates: One size does not fit all.

Two views of tax credits: New York Times correspondent Robert Pear wrote on Sunday about the experience so far with tax credits for health insurance enacted in 2002 as part of the Trade Adjustment Assistance Act. Pear reports that the TAA tax credits have covered only 5% of the projected population. But he fails to explain that the TAA credits are a very different breed of credit than those envisioned by the president.


The report disappointed many of us, who believe that refundable tax credits are a good idea to help millions of people to get health insurance, because Pear failed to point out the many differences between the TAA credits and the fixed-dollar credits proposed by the White House and congressional leaders. The TAA tax credits could be equated to early Medical Savings Accounts: They were so bound by legislative restrictions that it has been hard for a true market to develop. This was not a good comparison.


Two talks this week: Last Saturday, I traveled to Denver to give a talk on ?Innovations in Consumer Driven Care? to a meeting about 80 state legislators sponsored by the American Legislative Exchange Council. The appetite to learn more about how Health Savings Accounts and other consumer-friendly policies continues unabated. Our recommendation for these market-friendly legislators: Make sure that HSAs or their cousins, Health Reimbursement Arrangements, are available as an option to state employees.


Then this week in Washington, Professor Paul Feldstein of the University of California at Irvine brought his Health Care Executive MBA class to Washington to learn how things work. Bob Helms of AEI, Jeff Lemieux of Centrists.org, Bob Moffit of Heritage, and I presented, and here?s my PowerPoint.

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Two important events: President Bush brought eight small business owners ? including a restaurateur from Maryland and a pest control specialist from Florida ? to an event at the White House on Wednesday to explain his health agenda and how it will help small business. Greg Scandlen and I had front-row seats and were impressed with his personal commitment to strengthen the private market for health insurance and to use market-forces rather than government to solve problems in the health sector.


Also on Wednesday morning, the Senate Health, Education, Labor, and Pensions Committee held hearings on ?Health Care Spending and the Uninsured.? Highlights:


? Gail Wilensky of Project Hope emphasized that cost drivers, like advances in medical technology, medical liability, medical errors, and lifestyle issues (such as smoking and obesity), all ?are exacerbated by the current reliance on employer-sponsored health insurance? that encourages increased and even excessive spending on health care. Further, the tax subsidy is inequitable and provides more generous subsidies to higher-income workers.



? Duke University Prof. Christopher Conover described preliminary findings of a study he is conducting that shows ?the net burden of health services regulation likely exceed the annual cost of covering all 44 million uninsured. So a legitimate policy question is whether the benefits of regulation outweigh the benefits of coverage for all Americans.? Halleluiah!


? CBO Director Doug-Holtz Eakin emphasized that ?The uninsured population is constantly changing as people gain coverage and lose coverage? for many different reasons. ?The varying characteristics of the uninsured should be kept in mind when developing policies to expand insurance coverage.?


Earth to single-payer advocates: One size does not fit all.

Two views of tax credits: New York Times correspondent Robert Pear wrote on Sunday about the experience so far with tax credits for health insurance enacted in 2002 as part of the Trade Adjustment Assistance Act. Pear reports that the TAA tax credits have covered only 5% of the projected population. But he fails to explain that the TAA credits are a very different breed of credit than those envisioned by the president.


The report disappointed many of us, who believe that refundable tax credits are a good idea to help millions of people to get health insurance, because Pear failed to point out the many differences between the TAA credits and the fixed-dollar credits proposed by the White House and congressional leaders. The TAA tax credits could be equated to early Medical Savings Accounts: They were so bound by legislative restrictions that it has been hard for a true market to develop. This was not a good comparison.


Two talks this week: Last Saturday, I traveled to Denver to give a talk on ?Innovations in Consumer Driven Care? to a meeting about 80 state legislators sponsored by the American Legislative Exchange Council. The appetite to learn more about how Health Savings Accounts and other consumer-friendly policies continues unabated. Our recommendation for these market-friendly legislators: Make sure that HSAs or their cousins, Health Reimbursement Arrangements, are available as an option to state employees.


Then this week in Washington, Professor Paul Feldstein of the University of California at Irvine brought his Health Care Executive MBA class to Washington to learn how things work. Bob Helms of AEI, Jeff Lemieux of Centrists.org, Bob Moffit of Heritage, and I presented, and here?s my PowerPoint.

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About the author