“Transcending Obamacare”–A conversation with Avik Roy

Given the fact that conservative health policy advisor Avik Roy and I have disagreed so vehemently and so often, RBC readers might be surprised by the civil conversation we conducted over at healthinsurance.org about Roy’s new health plan.

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I hope my fellow liberals will read what he has to say–not because you will agree with him, but because he offers an instructive and well-articulated vision of what conservative health policies might look like that build on the platform created in ACA. I am a firm believer in Mill’s idea that if you only know your own side of the argument, you really don’t know that.

Roy rightly acknowledges that Republicans will not outright destroy ACA at this point. That question was decided by the 2012 election and by the (eventually) successful roll-out of ACA this year. Whatever the polling numbers on “Obamacare,”  the on-the-ground progress is impressive. Medicaid expansion and the new marketplaces are embedding within the fabric of American life.

Where it gets interesting and disconcerting is to note the generative conservative possibilities opened up by ACA. Roy would limit ACA in various ways. But his real quarrel is with Lyndon Johnson not Barack Obama. Once 64-year-olds are enrolled in the health insurance marketplaces, why the abrupt transition at age 65? Roy would raise the Medicare eligibility age by four months every year, retaining the subsidy structures provided by the exchanges and Medicaid. Over time, this would turn Medicare into much more of a means-tested program with dramatically reduced actuarial subsidies to the top half of the income distribution.

I don’t support this or see it as politically attractive for Republicans. But Roy’s plan raises fundamental questions about what we want Medicare to be and do.  More here.

Author: Harold Pollack

Harold Pollack is Helen Ross Professor of Social Service Administration at the University of Chicago. He has served on three expert committees of the National Academies of Science. His recent research appears in such journals as Addiction, Journal of the American Medical Association, and American Journal of Public Health. He writes regularly on HIV prevention, crime and drug policy, health reform, and disability policy for American Prospect, tnr.com, and other news outlets. His essay, "Lessons from an Emergency Room Nightmare" was selected for the collection The Best American Medical Writing, 2009. He recently participated, with zero critical acclaim, in the University of Chicago's annual Latke-Hamentaschen debate.

2 thoughts on ““Transcending Obamacare”–A conversation with Avik Roy”

  1. The problem Avik Roy claims he is trying to solve is fiscal unsustainability. If medical costs grow faster then national income for ever, the long-term policy question is the order in which people get pushed out of the bus, or whose care gets rationed first on it. To do him credit, Roy wants to start with richer retirees. But in the end everybody has to jump. His proposal for Medicaid is emphatically not progressive fiscally, with a $10,000 deductible. But it looks as if his premise is collapsing. Costs are deflating, and exchange premia are growing very slowly. What cost crisis?

    Roy's "let's stop subsidising Warren Buffett" meme is sophistry. The top 0.01% are insignificant in the Medicare bill. To the extent they bypass the system and go private for cash, like their British counterparts, they are net contributors over their lifetimes.

    The main progressive objection to means-testing health benefits is the long-term erosion of political support. A programme for the poor is a poor programme. That's why the British left is so concerned about private education and BUPA; the rich don't get out of paying taxes for the NHS and state schools, but to the extent they don't use them, they lose interest in their quallty.

    The extraordinary – possibly unique – fragmentation of the American scheme of health care does create numerous political as well as administrative fault lines and erodes the solidarity it should express. Progressives should not object to folding Medicaid and Medicare into "Americare" in the long run. On progressive terms.

  2. Once 64-year-olds are enrolled in the health insurance marketplaces, why the abrupt transition at age 65?

    Well, to start with, some people still want to retire at 65, and we tend to regard this as not being an unreasonable wish. That means, often, income drops, so paying current premiums becomes more difficult. More important, as we age our medical costs rise, so a large share of lifetime health care spending comes at age 65+. In other words, our lifetime pattern of spending for health care does not match our lifetime pattern of income. No system that pretends it does is going to work.

    The implication is that it is unrealistic to expect those age 65+ (and probably those close to that point) to pay health care premiums, on an annual basis, that are actuarially accurate. This will likely be true even for those well above Roy's 317% of poverty level standard. Fortunately, it is not impossible to design systems where premium payments are more closely matched to income, so they are "too high" when one has a good income and is healthy, and "too low" in other cases. I don't see Roy addressing that at all.

    I think doing that requires that we view health insurance as a life-long issue, not a series of limited-term policies, like car or homeowners' insurance. (Of course there are other reasons to take that view as well). And I doubt that can be accomplished without govenment involvement to assure that the premium structure makes sense, that insurers are able to provide the promised benefits, and so on.

    (Edited to change "with" to without" in the last sentence).

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