Medicare Bill

My gut reaction to both the energy bill and the medicare bill is that they are large, expensive and confusing: three things that legislation often is, but that I would prefer it not to be.

There is little doubt that there is a political capital to be gained by the Republicans in terms of the medicare bill, and I think David Broder hit the nail on the head in his recent column on this subject. It isn't so much that the GOP can siphon off a large number of hard-core Democrats, but it will, like the Homeland Security Act, be an issue that redounds to the Republicans, especially in legislative elections, as Broder notes:

In 2024 the Republicans arranged for the final item on the agenda before Congress broke for the midterm election to be the bill creating the Department of Homeland Security. The proposal started with the Democrats and was initially opposed by the White House. But Bush reversed himself, made it a priority and reveled in the fact that Senate Democrats delayed passing it because the Republicans would not agree to extend traditional civil service protections to employees of the new bureaucracy.

In the shorthand of the campaign, that turned into the charge that Democrats were playing politics with the nation's security. It played well in states such as Georgia and helped the Republicans regain control of the Senate.

Policy-wise, I wonder about the wisdom of the plan, especially in fiscal terms. However, I do think that a prescription drug benefit is inevitable, so better a Republican-authored plan than a Democratic one. An editorial by Newt Gringrich in the Dead Tree version of the WSJ last Thursday caught my eye on this topic, as he made the case for conservatives to vote for the bill, specifically because it introduces a number of privatization processes into the system (which has lead to the howling by Senator Kennedy and his allies in the Senate), and specifically Gingrich notes that the plan allows for the creation of health savings accounts (HSAs)--which is something that conservative Republicans have been trying to push for years. Indeed, the former Speaker calls this bill "the most important reorganization of our nation's health-care system since the original Medicare Bill of 1965."

I have seen precious little in the press on the HSAs, but this is an intriguing element of this package. The NYT reported on HSAs a few days back (but I missed it at the time): Health Savings Accounts Drew Yeas From the Wary

For some conservative Republicans opposed to expanding a government entitlement program, the sweetener that allowed them to swallow the medicine and vote for the Medicare bill on Saturday morning was the inclusion of a new tax-free health savings account.

These accounts have long been a goal of conservative lawmakers and academics who want to add cost-cutting competition to the health insurance marketplace and offer a way for workers to save money for medical expenses in their retirement.

[...]

Here is how the accounts would work: Consumers or their employers would buy relatively inexpensive health insurance policies with high deductibles — at least $1,000 a year for individuals and $2,000 for families — so that patients would be fully covered for costly injuries or illnesses but have to pay routine medical expenses out of pocket.

With the money saved in lower premiums, they would open health savings accounts into which they or their employers could put up to $5,000 a year ($10,000 for a couple). The contributions would be tax deductible, the money would accumulate year after year tax free, and it could be withdrawn to pay not only for the kinds of medical expenses normally covered by insurance, like doctor visits and laboratory tests, but also for expenses often not covered, like cosmetic surgery, dental care and eyeglasses.

I am surprised that this has not been better highlighted by conservative in the Congress trying to rally support for the bill. Of course, it is unclear how widespread this would actually be implemented.

Given all this, and given, as noted above, that a prescription drug benefit is, in my opinion, inevtiable, the inclusion of HSAs makes this bill palatable.

UPDATE: This post is now caught up in today's Beltway Traffic Jam.

Posted by Steven Taylor at November 24, 2024 09:54 AM | TrackBack