Health Care Reform: Two Important Points

I've heard it said that the bill (though it's not even really a bill yet) was crafted to take advantage of the CBO's scoring rules. Is this similar to the way debt issuers used their knowledge of rating agency models?

Broadly speaking, is there an insufficient diversity in economic models?

Cutting spending it not the same as cutting costs, because the former can be achieved by increasing the latter.

I wish more attention would be paid to this simple fact. When government bureaucrats are overriding the decisions of you and your doctor, don't expect their "cost cutting" to cut the cost of your suffering.

Arnold,

If they were actual "patches", there might be some justification for the "reforms", but they are, in fact, new wounds to the system.

"I've heard it said that the bill (though it's not even really a bill yet) was crafted to take advantage of the CBO's scoring rules."

This is true. The CBO scores for the next ten years. The exchanges and subsidies don't start until 2013 or 2014, and only fully ramp up by 2015 or 2016. The taxes start immediately, as do some of the Medicare cuts, though they also become greater later.

The bill cuts the deficit net in the first five years, and increases it net in the second five years.

The key problem with utilizing Insurance to meet the costs of Medical Care is that Insurance is governed by individual state laws and it cannot develop the efficiencies desired. It is still virtually unaffordable to expect a family to spend 12,000 to purchase insurance (in my state).
Once the risk factor is removed from the insurance quote the price must increase to cover all those who bring cash. Estimates are a 5% increase which means another $50 each month in premiums. THEN you have to meet the deductible.
Now you say the deductible is $7,500 before the government kicks in $3,500. So the family is out $20,100 in AFTER-TAX dollars before they get a $3,500 refund on the premium.
Regardless of the arguments in favor of insurance, who can afford a $20,000 hit to their family income?
Since Insurance is not affordable this does nothing to cover individuals that aren't already covered. However, it does make hard-working people have the same standard of living, economically, as those who are currently considered poor.

However, I am strongly convinced that Feldstein's approach is far better than what we are going to see in this year's legislation.

Faint praise indeed! Feldstein is only one person; he can't be expected to come up with something worse than the sum of 535 different people's bad ideas.

We don't have a "health care finance system" we have health insurance and savings. In fact, we don't have a health care "system" we have doctors and hospitals, which we chose according to our financial abilities. This assumption that any system is unsustainable or insufficient is based on a collective fantasy to begin with.

but what if we removed all state mandates and barriers from health insurance? And then put health insurance on an equal footing with home, auto, life and liability insurance - no tax free income and no tax deductions. What would health care look like five years later?