What I call health policy orthodoxy is committed to two propositions: (1) The really important health issue for poor people is access to care, and (2) to ensure access, waiting for care is always better than paying for care. In other words, if you have to ration scarce medical resources somehow, rationing by waiting...
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Why is the price of a knee replacement for a dog—involving the same technology and the same medical skills that are needed for humans—less than one-sixth the price a typical health insurance company pays for human operations? Why is it less than one-third of what hospitals tell Medicare their cost of doing the procedure...
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Health Savings Accounts are the fastest growing product in the health insurance marketplace. Currently, about 25 million families are managing some of their own healthcare dollars as a result. Virtually every serious study has found that these plans lower costs without jeopardizing the quality of care people receive. In fact, most employers have decided...
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One of the many pitfalls of Affordable Care Act, I explained in my previous blog post, is that it requires insurers to spend no more than 20 percent of their income from premiums on administrative costs and no less than 85 percent on medical care. Regulating the medical loss ratio (MLR), as it’s called,...
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The Affordable Care Act requires health insurance plans to spend at least 85 percent of their premium income on medical care and no more than 20 percent on “administrative costs”—the portion of insurance premiums that are not spent on medical care.[1] Here’s one immediate problem: no one knows how to define “administration.” Just as...
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Senior citizens are major losers in health reform. More than half the cost of the reform will be paid for by $523 billion of cuts in Medicare spending over the next ten years.[1] Although there are some new benefits for seniors (mainly new drug coverage), the costs exceed the benefits by a factor of...
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One of the most oft-repeated arguments for health reform is to reduce costly and delayed trips to the emergency room by uninsured patients. But will that happen? The heaviest users of the ER (in proportion to their numbers) are Medicaid patients (perhaps because many doctors won’t accept them), and more than half of the...
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In recent blog posts I’ve discussed how the Affordable Care Act creates perverse incentives for employers and insurers. In this piece I’ll touch briefly on how it creates perverse incentives for individuals. (For more discussion, please see my Independent Institute book, Priceless: Curing the Healthcare Crisis.) One can get a glimpse of the problem...
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Under the current system virtually all employers and group insurers have perverse incentives to attract the healthy and avoid the sick. Once people have enrolled, the incentives are to overprovide to the healthy (to encourage them to stay) and underprovide to the sick (to encourage them to leave). Managed Competition in the Healthcare Exchanges...
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In my previous post I explained that the subsidies of the Patient Protection and Affordable Care Act are regressive and unfair and create high marginal tax rates. What would a better approach look like? To achieve the ideal, the federal government should offer people the same tax relief for the purchase of health insurance,...
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