The Administration’s OMB Director Peter Orszag and Health care adviser Nancy-Ann DeParle use the Washington Post’s op-ed page to pitch the deficit reduction and cost-cutting advantages of the President’s health care reforms. It’s the standard pitch we’ve seen before, offering a necessary response to many of the false statements made by the bill’s detractors.
There are undoubtedly worthwhile cost-cutting/efficiency measures in the current bills. Predictably, the authors once again neglect to mention what the President’s proposals should have done but didn’t.
Other than ignoring the industry provider market power, concentration and price-fixing elephants in the room — and thus not having to explain why Medicare can’t reimport or negotiate drug prices, the US can’t shorten anti-competitive patents and non-compete agreements, can’t end off-shore tax havens for PhRMA’s largest drug companies, and can’t confront the private insurers with more budget-saving, premium-reducing public insurance alternatives — Orszag and De Parle slip in one giant whopper with extra cheese and mayo when describing the excise tax escalation rates:
And, just as with the version in the Senate-passed bill, the president’s excise-tax proposal would increase that threshold more slowly than the rate of health-care cost growth. As a result, firms would have a gradually increasing incentive to seek higher-quality and lower-cost health plans.
Uh, no. When the insurer’s and employer’s incentives are to avoid the tax by reducing the premium, the inevitable result — because it’s the easiest tax-avoidance path — is to provide lower-quality insurance to employees based on higher co-payments (or less coverage) for the employees.
But hey, turning the logic up-side-down to obscure that you’re increasing economic insecurity for America’s middle class is just what the political advisers would tell the policy advisers to say, right?
HuffPo/Sam Stein, Insurers set to raise prices, walk away from consumers