First private equity and now the Ryan Plan. Will MIT economist Jon Gruber have to do a Cory Booker-like retraction (via the WaPo):
One health policy idea he thinks could work, albeit in the future, would be a premium support model akin to Ryan-Wyden. Gruber imagines a future health-care system with something like “cradle to grave exchanges,” where all health insurance plans are purchased on a government-regulated marketplace.
“I think, ultimately, something like Ryan-Wyden is a good place to be, but not yet,” Gruber said. “In the long run, it’s a very good model. But right now we’re not good enough at risk adjustment and we have a plan that is working for seniors. Why rip that up and start over?”
But why wait? It seems to me that the endgame Gruber is describing is something like Switzerland’s healthcare system. The Swiss, no matter what their age or income level, buy health insurance from private insurers, with the poor getting purchase subsidies. Companies have to insure everyone. Here is consumer-driven healthcare advocate Regina Herzlinger:
This consumer-driven, universal coverage system provides excellent health care for the sick, tops the world in consumer satisfaction, and costs 40 percent less, as a percentage of GDP, than the system in the US. The Swiss could spend even less by choosing cheaper, high deductible health insurance policies, but they have opted against doing so. Swiss consumers reward insurers that offer the best value for the money. These competitive pressures cause Swiss insurers to spend only about 5 percent on general and administrative expenses, as compared to 12-15 percent in the US. And unlike Medicare, the private Swiss firms must function without incurring massive unfunded liabilities. Competition has also pushed Swiss providers to be more efficient than those in the US. Yet they remain well-compensated.
There is nothing radical or untried about premium support, and it should replace both Medicare and Medicaid. Only politicians looking to frighten voters pretends otherwise.