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A Cheaper Health Reform Bill is a Worse Health Reform Bill

When you think about costs and health care reform, I think it’s useful to distinguish between cost per person and overall cost. If you want to say that controlling health care cost increases is important, which I think it is, you ought to be talking about cost per person. If health care costs go up because the population grows, that’s not a bad thing. And if you save money by simply having people go without health care, that’s not a good thing. The kind of cost controls you’re looking for are the kind that deliver care to people more efficiently, not the kind that just deprive people of health care.

All versions of health reform currently before congress achieve some of the good kind of cost controls. But it looks as if the Finance Committee’s quest to cut its $1.6 trillion health reform bill down to a $1 trillion health reform bill overwhelmingly involves the bad kind of cost controls:

Senate Budget Committee Chairman Kent Conrad (D-N.D.) said the Finance Committee had reduced the overall cost of its bill by cutting subsidy levels for uninsured people.

Now if you really think that “passing bills that involve round numbers” should be a top policy priority for the Senate, this is a great deal. And, conveniently, zero members of the United States Senate will be adversely impacted by these subsidy cuts. But that’s a substantial amount of human welfare being sacrificed for no real reason. To pay for more subsidies, what you would need is more taxes, and again some sound revenue ideas appear to be getting rejected for not-very-good reasons:

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The Joint Committee on Taxation calculated that a 3-cent tax on each 12-ounce sugared soda would raise $51.6 billion over a decade. But opposition is not limited to the bottling industry. Major sources of sweeteners include Montana, which has a large sugar beet industry, and Iowa, which produces high-fructose corn syrup — the home states of Senators Baucus and Grassley.

Ezra Klein reminds us that the Senate also seems determined to leave $300 billion in revenue to be gained by curbing reductions for rich people on the table. Economically struggling Americans looking to pay for health care will pay the price for that decision.