Big news out of the right today on a potential GOP alternative to the ACA from Ed Gillespie (worked in Bush II Admin) who recently ran in Virginia for a US Senate seat (lost but close).
Op-Ed at the NYT here.
Gillespie proposes a very fiscal friendly alternative to the current very fiscal UN-friendly ACA. This may be a roll out of the non-libertarian branch of the GOP's 2017 election healthcare platform.
Here's the deal:
Republicans must have a plan that addresses the concerns that led to Obamacare’s enactment in the first place: rising costs, too many uninsured people and a lack of protection for patients with pre-existing conditions.
My plan begins by addressing an anachronistic aspect of the tax code that’s rooted in World War II wage and price controls. Those who get health insurance through their employer get a tax break, but those who purchase it on their own generally do not.
While preserving the tax break for employer-based insurance, my plan would offer health-insurance tax credits for all individuals and families who buy insurance on their own.
The tax credit would be $1,200 per year for those under 35 years of age, $2,100 for those 35 to 49, and $3,000 for those 50 or older, plus $900 per child. For a family of four headed by two 40-year-old parents, the tax credit would be like having $6,000 in cash to spend on health insurance. If the family found a plan they liked for less, they could put the difference in a health savings account to help cover out-of-pocket expenses.
These tax credits would benefit everyone...OK so from a fiscal perspective, there are about 110M households in the US, so if we assume the average credit per household at $4k per year (the "typical" US household not qualifying for the full $6k in Gillespie's example), this would result in an increase in the leading fiscal flow to the non-government of about $450B annual; or in excess of a 10% increase to the present leading flows of about $4.2T annual.
This 10% leading flow increase imo would at the same time be enough to get us out of the current fiscally induced general economic muddle-thru malaise as well as result in better US healthcare REAL outcomes.
The libertarian nut-jobs on both the left and right are the only thing standing in the way of this type of proposal becoming a reality.
This NYT op-ed from Gillespie stands in SHARP contrast to an infamous previous NYT op-ed by left-libertarian moron nut-job Democrat Ratner here sub-titled "We Need Death Panels" (SCAAAARRRRRYYYY!!!!!! THESE LIBERTARIAN MORONS WILL KILL US ALL OFF!!!!!).
Whether this proposal from GOPer Gillespie or some other non-libertarian-nut-job Democrat derivative that one-ups it, the best approach would be for the government authority to simply provide the citizens with the leading flow of USD settlement balances to purchase robust healthcare from their providers of choice.
Again, the only thing standing in the way of our achievement of this improvement to the current socio-economic condition for US citizens are the intransigent anti-authority libertarian nut-job morons among us.
From a perspective of actual healthcare, one just needs to read a few of the comments at the NYT to see how idiotic and mean-spirited Gillespie's proposal - clearly enshrining him as just another dirt bag elitist boot licker.
ReplyDeleteFrom the fiscal policy standpoint of pumping more money into the private sector, it does it by tax reduction/crediting rather than by ACA's spending increases through subsidies - at best, on net, not much different EXCEPT both in scale on its face, and more importantly, the political process, particularly with the incoming Congress, would require that it would be "paid for" by cutting federal spending into the economy elsewhere.
Big news? Only for those predisposed to idiocy.
This is the McCain plan, right? It's a coucher system for health care.
ReplyDeletecoucher = voucher
ReplyDeleteI doubt there would be any significant increase in the fiscal flow. Whatever plan they ultimately advance will be scored as fiscally neutral, so they will cut spending elsewhere in order to pay for the tax cuts.
ReplyDeleteThere is no mention of that Dan, (ie the "cuts" or offsets) they assert that their tax credit increases would be less than the ACA spending, which the ACA has addl taxes/fees as "offsets" etc...
ReplyDeletewhich may or may not happen I dont care...
we have to get leading flow up from the current $4.2T, if firms look at this and figure they can stop paying for employees healthcare and it wouldnt result in a pay cut for their employees (like current ACA as nobody qualifies for the subsidies...) they will probably just tell all employees to use the credits and we're off to the races...
And I cannot find any govt spending increases this year from the ACA .... but the tax offsets are certainly there... the ACA to me looks like a cramdown of cuts to the providers engineered by morons....
Crediting a family of 4 $6k may not be enough but the fiscal approach is the correct one....
Dems should play toppers rather than defend the ACA which is based on a state model via Gruber's Romneycare which conflates the federal govt with a household or a state govt where everything has to be "paid for", etc...
Gillespie's thing here is similar fiscally to Warren M's proposals...
rsp
Dan,
ReplyDeleteIts the libertarian nut-jobs that will slither out of the woodwork to demand the "offsets" or their favorite: "how are we going to pay for that?!?" lunacy....
they will need to be beaten down...
Hey Dan I dont know if you saw the Colbert thing below but I hope you are not near Keene! WOW! ;)
rsp,
You can't buy much health care for $3000 (the amount Gillespie suggests for someone my age).
ReplyDeletePeople just don't seem to understand how expensive health care is in America.
You can't buy much health care for $3000 (the amount Gillespie suggests for someone my age).
ReplyDeleteAnd then add it pre-existing conditions, which many people have.
The only cost-effective way to deal with insuring a population is single-payer, which in the US would be Medicare for all.
But cost-effective means least expensive and while even though more money would be spent by expanding the base, providers would get less per treatment, which many providers would object to and lobby against.
One of the chief problems in a capitalistic economic run on neoliberal principles based on neoclassical economics (Say's law) is saving. The notion that saving causes investment (S is a necessary and sufficient condition for I) results in prioritizing saving when saving is actually demand leakage. Saving is self-sabotage in a capitalistic system.
ReplyDeleteThe principle reasons people save are 1) to provision for the future, and 2) to accumulate economic power that leads to social and political power. Other than the wealth, most saving is to provision for the future.
The major needs to provision for the future are education, health care and retirement, as well as unexpected need. Providing universal education, universal health, a strong safety net, and a comfortable pension obviate the need for most people's need to save.
#2 can be dealt with by taxing away economic rent to discourage rent-seeking.
Then the issue is organizing economic resources and institutions to optimize the availability of real resources for present and future needs and then to satisfy wants insofar as possible.
but Tom that hardly describes the ACA...
ReplyDeleteIf they did something like this Gillespie thing then citizens would have the balances to hit the bids on the exchanges....
iow I was hopeful about the ACA and the concept of 'exchanges' but what they did was work with the providers on the offer side and forgot that the bidders need balances of currency to hit the offers with...
So now they have all of these exchanges with offers and no bidders ... because the bidders are broke! HELLOOO!!! MORONS!!!!!....
So just keep the Obamacare exchanges and use fiscal to fund the bidders with tax credits or whatever...
Work that a while it may eventually morph into something like "medicare for all" but how about some baby steps first?
If we somehow could hammer down the libertarians we could perhaps get this compromise...
Just a thought:
ReplyDeleteDon't these sort of voucher programs just lead to a higher floor price for services?
The new floor price being the value of the voucher.
I think that private insurance is a dead-end, and we should just admit it and go for the real deal.
ReplyDeleteThe GOP is never going to go for funding the bidders.
Moreover, it is absolutely necessary to separate both pension funding and health care from employers, who have no business funding either. That's Rube Goldberg.
We need to talk about a system that works in an integrated way rather than a patchwork that can never really work because it doesn't solve the design problem, and it doesn't solve the design problem because it doesn't ask what it is.
We have a completely crazy assumption that a free market, free trade, free flow of capital system will produce the optimal result possible to the degree that governments deal with nothing security and property rights.
Unless and until that stupid assumption is shit-canned, we are toast.
We need a macroeconomics based on a global economy as a closed system with limited resources the use of which needs to be optimized wrt to the needs of humanity and in which governments play an integral role.
Seve,
ReplyDeleteALL PRICES are necessarily a function of what the govt pays for things or what they let their fiscal agents lend against things.... no different for healthcare...
"MMT 101"...
rsp,
Tom that would be ideal but I dont see us getting there via a step function....
ReplyDeletersp,
That's what I am saying, Matt. We need to go to universal education, universal health care, a sufficient safety net, and a comfortable retirement funded by government in a single step.
ReplyDeleteThe longer we wait to do this, the more time and resources we will waste and the more pain that will be involved.
The neoliberal model is just bonkers and we need a political faction in the US to stand up and say so. We also need realistic alternatives to debate instead of trying to fix a system whose assumptions are so unrealistic and biased toward class power.The US system is being run for those at the very top of the power structure and the rest get the crumbs that drop from their tables.
As I've said many times, the sine qua non is getting the money out of politics, shutting down K Street, and locking the revolving door. This is the only way to end the shadow government, aka the deep state, and reform the political process away from the principle, Those who own the country should govern the country, to government of the people, by the people and for the people.
I just don't see an incremental approach working when it's a systems problem and the fundamental assumption is that there is no system, just individuals choosing freely and that this produces the optimal result, with any discrepancy explained by government intrusion.
With those assumptions you can't get there from here with incremental fixes. This is especially true when these proposals are attacked as adding to the problem by intruding government in the operation of natural laws thereby undermining meritocracy and just deserts.
The political problem is that no one in any of the political parties, even the fringe ones, understands this at a level that is actionable, and the information system in the US — education, media, etc. — is heavily biased against anyone getting it or acting on it if they do.
This is where I think the energy of people looking for change should go rather than tinkering with an obsolete machine that is badly broken to boot. Let's get our heads out of the 18th century and into the 21st century.
Hard to argue with this comment Tom....
ReplyDeleteYour comment needs to go viral.
ReplyDeleteMatt, when the aim is to get government out of macro and therefore minimize government's role in the economy through a minimal policy agenda, then it's simply impossible to run an efficient and effective system in which the common good is served by meeting people's needs and the national prospers more or less symmetrically. That system is designed to "make America great" irrespective of distribution and it is oriented toward rent-seeking and protecting rent seekers with government institutions, really their only legitimate use in this view. That kind of a system can never be made to work for the people of a nations because it is designed not to, but rather to favor a class-based power structure institutions designed to do this. Add to this the iron law of institutions and the system becomes neo-feudal:
ReplyDeleteThe people who control institutions care first and foremost about their power within the institution rather than the power of the institution itself. Thus, they would rather the institution "fail" while they remain in power within the institution than for the institution to "succeed" if that requires them to lose power within the institution.
So we end up being ruled by neo-feudal lords.
The only way out of this bag is through a policy approach that views the public and private sectors as complementary in an integrated system in which efficiency and effectiveness are based on achieving symmetry of outcomes aka the common good.
That means a completely revised view of macro as a policy science by basing assumptions on reality and testing hypotheses scientifically. But the actual test of the system is the degree to which it delivers as a whole.
A system that leaves a large number of people in poverty, maintains a buffer stock of unemployed, and lurches from boom to bust with periodic crashes is obviously a failed system. In addition, it results in oligarchic "democracy" that reflects the priorities of the ruling elite instead of actual democracy where policy reflects the wishes of the majority.
Back to the drawing boards. Health care is an important aspect of the system but it is only one of the key aspects. This needs to be looked at holistically, and the ancient Greeks were already approaching these issues in terms of living a good life as an individual in a good society. It's what we need to be debating, too.
Right now the majority of the country is presumed to be choosing to live as wage and debt slaves so a few can become fabulously wealthy and free to do as they please. Is that what the people really want on the low odds that they could become one of the 1% or 0.1 or 0.01%? If so they are fools, but I suspect it's more like they are being fooled into accepting that "there is no alternative."