Avoiding the Extremes on Either Side

 

Not only is Washington politics already hyper-partisan, but both parties are continuing to move to even greater extremes, see here and here.
Here are two examples of extreme positions now being espoused by major elements of one or the other of the two parties:

  • Single payer healthcare. The failure of the GOP effort to repeal the Affordable Care Act this past summer means that (the goal of) universal healthcare is here to stay. The ACA expands access to healthcare but does nothing to control costs. Single payer, Medicare for All, would control costs but then we end up with socialized medicine. The only way to establish a cost efficient free market healthcare system is to remove, or at least limit, the tax exemption for employer provided care and to set up high deductible catastrophic care supplemented by health savings accounts to pay for routine expenses. This would compel everyone to pay close attention to the cost of their own healthcare.
  • Tax cuts instead of tax reform. Tax reform, i.e. lowering both corporate and individual tax rates, paid for by closing loopholes and shrinking deductions, is an excellent way to speed up economic growth and thereby create more and better paying jobs. But it is imperative to do this in a revenue neutral manner, i.e. without increasing our annual deficits. Our debt (the public part on which we pay interest) now stands at 77% of GDP, the highest it has been since the end of WWII, and is predicted by the Congressional Budget Office to keep getting larger without major changes in public policy.

Conclusion. The U.S. badly needs a more cost efficient healthcare system and a simpler and more efficient tax system. But there are right ways and wrong ways to do both of these things.  Single payer healthcare and (unpaid for) tax rate cuts are the wrong way to proceed.  In each case, no action at all is much better than getting it wrong.

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4 thoughts on “Avoiding the Extremes on Either Side

  1. Jack,

    The never ending song plays on. Each of your stanzas adds improved depth and character to the character of your chorus. I would add one more detail. The economic flexibility to use a HSA as an economic strategy for lowering our nation’s health spending probably does not apply to many citizens. I suspect that 50% of citizens either have too little or too much flexibility for managing their day to day economic choices for healthcare. Furthermore, the private health insurance industry as well as all Federally sanctioned healthcare services would need to offer a uniform set of minimum benefits for Primary Healthcare to improve its availability and accessibility. The description of Primary Healthcare benefits should be managed by a Federally sanctioned, semi-autonomous institution (viz, FEDERAL RESERVE). A very high level, Conflict of Interest exists when the payers have responsibility for “who gets what!” The level of resources historically applied to Basic Healthcare Needs has always LOST OUT to the allocation of resources to Complex Healthcare Needs.

    Paul

    • I realize that health savings accounts will be a challenge to implement on a widespread basis. But to some extent that’s the way we are already going. Many companies are raising deductibles for their employees in order to cut down on costs. When this happens then HSAs are a natural follow up development. Perhaps some sort of tax exemption would encourage more people to set them up on their own.
      We simply have to have a way to make people more responsible for their own health.

  2. Healthcare will never succeed in cost containment until it is true insurance. That means strong competition by insurers and medical community, and patient consequences for failure to be continuously insured, and failure to comply.

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