Avik Roy — who advised Republican presidential candidate Mitt Romney on health care policy — and Doug Holtz-Eakin published an op-ed for Reuters earlier this week in which they outlined their vision for a “free market” approach to health care reform. It’s a serious proposal, albeit one that makes the same fallacious argument as Whole Foods CEO John Mackey’s assertion that Switzerland’s health care is more “entrepreneurial” than Obamacare is. Unfortunately, that claim is simply the least worrying aspect of a plan that is riddled with benefit cuts and shifting health care costs onto consumers.
First of all, mentioning Switzerland in the piece at all is essentially a red herring, as the duo’s proposal doesn’t actually shift American health care in the direction of the Swiss system — quite the opposite, in fact. While Switzerland shares important aspects with Obamacare, particularly its federally-subsidized health insurance marketplaces — a fact that Roy and Holtz-Eakin acknowledge, to their credit — the country’s health care program can hardly be described as a less regulated system, since it actually provides more generous insurance subsidies, requires insurers to offer at least one “nonprofit plan” akin to a public option, and imposes stricter price controls and negotiations between the government, drug makers, and health care providers.
Instead, what Roy and Holtz-Eakin want to see is a modified, and far more regressive, version of the proposal that Sen. Ron Wyden (D-OR) and former Sen. Michael Bennett (R-UT) proposed first in 2007 and then again in 2009 during the health care reform debate. Under Roy-Holtz-Eakin, Medicaid and Medicare beneficiaries would be shifted away from public insurance into private plans on Obamacare’s insurance marketplaces, consumer protections and regulations governing the marketplaces would be rolled back to encourage “innovation,” federal insurance subsidies would be limited to Americans up to 300 percent of the federal poverty level (FPL) instead of the Obamcare-mandated 400 percent FPL, and the Medicare eligibility age would be raised by three months every year indefinitely.
These are really poor ideas that would shift costs onto consumers and force many to forgo care, cut Americans’ health benefits by depriving them of Medicaid’s unique benefits, and create costlier private insurance premiums by siphoning seniors out of Medicare — all while doing absolutely nothing to lower the actual cost of American health care, which is the only real way to reduce national health expenditures.
Roy-Holtz-Eakin also caps federal insurance subsidies at 300 percent FPL rather than 400 percent FPL in an effort to contain government expenses. In the op-ed, the authors implicitly justify this by citing the example of Massachusetts — the birthplace of Obamacare — where reform has been working pretty well. But that ignores the fact that Massachusetts is a relatively wealthy state with unemployment and poverty below the national average. For the rest of the country, that cap would be pretty devastating, pricing millions of Americans out of the health care system. Roy and Holtz-Eakin also do not want subsidies to increase faster than inflation, even though that provision is meant to address the well-established reality that health care inflation tends to accelerate faster than regular inflation.
Although Roy-Holtz-Eakin may be an honest proposal for curbing costs, it is largely based on the dishonest notion that relinquishing more responsibility — a euphemism for shifting costs — onto consumers and making them pay more for their care will somehow magically curb the cost of health care. It won’t — but it will make Americans avoid receiving treatment, leading to a form of self-rationing that is particularly ironic given Roy and Holtz-Eakin’s goal of preventing government rationing of health care.