Despite a consensus across the political spectrum that the problem of the chronically uninsured is in dire need of solution, little progress has been made. Public spending goes to topping up coverage for the elderly, already heavily subsidized under Medicare, or helping people temporarily without insurance because of international trade dislocations, so that it is clear that something is lacking in the case for significantly reducing the number of uninsured persons. In this paper I suggest that there have been two (...) missing ingredients: a strategy for breaking the political deadlock around this issue, and information about the benefits of coverage sufficient to persuade kindly but skeptical taxpayers that they should be willing to pay to help solve this problem. (shrink)

Despite a consensus across the political spectrum that the problem of the chronically uninsured is in dire need of solution, little progress has heen made. Public spending goes to topping up coverage for the elderly, already heavily subsidized under Medicare, or helping people temporarily without insurance because of international trade dislocations, so that it is clear that something is lacking in the case for significantly reducing the number of uninsured persons. In this paper I suggest that there have been two (...) missing ingredients: a strategy for breaking the political deadlock around this issue, and information about the benefits of coverage sufficient to persuade kindly but skeptical taxpayers that they should be willing to pay to help solve this problem.This article begins with a discussion of these two problems. It then outlines a strategy based on income-related or conditioned refundable tax credits for private and public insurance, coupled with a plan to assemble persuasive information that may move things forward. (shrink)

Employers must determine the types of health care plans to offer and also set employee premiums for each plan provided. Depending on the structure of the employee share of premiums across different health insurance plans, the incentives to choose one plan over another are altered. If employees know premiums do not fully reflect the risk differences among workers, such pricing can give rise to a so-called “death spiral” due to adverse selection. This paper uses longitudinal information from a natural experiment (...) in the management of health benefits for a large employer to explore the impact of moving from a fixed-dollar contribution policy to a partially risk-adjusted employer contribution policy. Our results show that implementing a significant risk adjustment had no discernable effect on adverse selection against the most generous indemnity insurance policy. This stands in stark contrast to previous studies, which have tended to estimate large impacts attributed to selection when employers move to a fixed-dollar policy from one with some risk adjustment. Further analysis suggests that previous studies, which appeared to detect plans in the throes of a death spiral, may instead have been reflecting an inexorable movement away from a non-preferred product, one that would have been inefficient for nearly all workers even in the absence of adverse selection. (shrink)

The recent Supreme Court decision on several provisions of the Patient Protection and Affordable Care Act provides an opportunity to address two kinds of design flaws in the legislation whose correction would both improve economic efficiency and some important dimensions of equity. The Court's view that the mandate is a tax is consistent with the general economic view that defines a tax as “a compulsory payment for public purposes.” This was the viewpoint I took in my earlier work as well. (...) However, there is considerable difference, disagreement, and ambiguity about the public purpose sought by the ACA payment. The primary purpose of the mandate in my work and in arguments for the mandate in Massachusetts was to try to get as many people as possible to have at least some insurance coverage. A secondary consequence of a mandate is to shore up community rating, although community rating per se does not contribute (and generally is harmful) to the goal of covering a greater proportion of the population. (shrink)

To achieve lower medical spending with as little reduction as possible in good outcomes, practitioners and policy makers alike have been experimenting with the use of practice guidelines. These guidelines both recommend certain types of therapies and proscribe others in the treatment of patients with particular conditions. This paper explores the question of whether guidelines which do reduce total resource costs of medical care to a population will be feasible and produce “acceptable” results. The definition of acceptable is part of (...) the policy problem, so it will be left open for a while, but the question of which outcomes match with which levels of resource cost will form the positive basis for the normative judgment of “acceptability.”. (shrink)

To achieve lower medical spending with as little reduction as possible in good outcomes, practitioners and policy makers alike have been experimenting with the use of practice guidelines. These guidelines both recommend certain types of therapies and proscribe others in the treatment of patients with particular conditions. This paper explores the question of whether guidelines which do reduce total resource costs of medical care to a population will be feasible and produce “acceptable” results. The definition of acceptable is part of (...) the policy problem, so it will be left open for a while, but the question of which outcomes match with which levels of resource cost will form the positive basis for the normative judgment of “acceptability.”. (shrink)