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Health Reform Ideas in the Primeval Soup
Unformatted Document Text:  35 insurance options. Both suggest a public insurance plan (not apparently Medicaid) as an alternative to private insurance plans offered. Both propose small business subsidies and refundable tax credits to low-income individuals in the insurance market. Employer mandates are used for large employers. Finally, both propose “soft” approaches to cost containment, such as electronic medical records and importation of drugs from Canada, rather than ‘hard” controls, such as global budgets, capital restrictions, or tighter reimbursement rules for providers. A major difference in the Clinton plan is the use of an individual mandate for the entire population. Obama only has such a mandate for children. Getting to the End Game Other than use of the individual mandate and some difference of other detail the two approaches both incorporate a wide variety of the health policy ideas we have discussed in the paper. If a bill is drafted in the White House for either of them, it is going to be a very thick stack of paper. Each of the distinctive elements will be complicated. Some will require major changes in existing law and practice. The tax credit and subsidy pieces will offer major temptations for a variety of tinkering with the tax code. What seems most problematic is the attempt to incorporate a wide variety of contradictory policy ideas into one package. There is almost a campaign instinct to have something for everyone. Either the new administration or the Congress, or both, will likely need to make choices among the various policy ideas. Significant expansion of existing public programs will require finding revenue sources to support the expansion, and place additional burdens on states as well. Tax credits and subsidies give the appearance of being off-budget items, but if utilized extensively and deeply, result in loss of revenue. A play or pay type of employer mandate only applied to larger employers faces the political costs of this type of provision without much of the gain, since most large employers already provide group coverage. The notch between large and small employers is difficult to define. There is an instinctive and understandable campaign aversion to identifying new sources or revenue or reallocating old sources. But, whatever the approach some redistribution of income from higher income families to the working poor is enviable with health reform. A proposal with a complex system of tax credits, subsidies, mandates, and expanded public programs tends to hide the redistribution, especially during an election campaign when neither camp has the resources to follow the money in an opponent’s plan. This will change when a proposal arrives in Congress and the Congressional Budget office begins to score the proposal, and interest groups mobilize their spreadsheets to

Authors: Brasfield, James.
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35
insurance options. Both suggest a public insurance plan (not apparently Medicaid) as an
alternative to private insurance plans offered.
Both propose small business subsidies and refundable tax credits to low-income
individuals in the insurance market.
Employer mandates are used for large employers. Finally, both propose “soft”
approaches to cost containment, such as electronic medical records and importation of
drugs from Canada, rather than ‘hard” controls, such as global budgets, capital
restrictions, or tighter reimbursement rules for providers.
A major difference in the Clinton plan is the use of an individual mandate for the entire
population. Obama only has such a mandate for children.
Getting to the End Game
Other than use of the individual mandate and some difference of other detail the two
approaches both incorporate a wide variety of the health policy ideas we have discussed
in the paper. If a bill is drafted in the White House for either of them, it is going to be a
very thick stack of paper. Each of the distinctive elements will be complicated. Some
will require major changes in existing law and practice. The tax credit and subsidy pieces
will offer major temptations for a variety of tinkering with the tax code.
What seems most problematic is the attempt to incorporate a wide variety of
contradictory policy ideas into one package. There is almost a campaign instinct to have
something for everyone. Either the new administration or the Congress, or both, will
likely need to make choices among the various policy ideas. Significant expansion of
existing public programs will require finding revenue sources to support the expansion,
and place additional burdens on states as well. Tax credits and subsidies give the
appearance of being off-budget items, but if utilized extensively and deeply, result in loss
of revenue.
A play or pay type of employer mandate only applied to larger employers faces the
political costs of this type of provision without much of the gain, since most large
employers already provide group coverage. The notch between large and small
employers is difficult to define.
There is an instinctive and understandable campaign aversion to identifying new sources
or revenue or reallocating old sources. But, whatever the approach some redistribution of
income from higher income families to the working poor is enviable with health reform.
A proposal with a complex system of tax credits, subsidies, mandates, and expanded
public programs tends to hide the redistribution, especially during an election campaign
when neither camp has the resources to follow the money in an opponent’s plan.
This will change when a proposal arrives in Congress and the Congressional Budget
office begins to score the proposal, and interest groups mobilize their spreadsheets to


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