FacebookTwitterGoogle+RedditEmail

Jeb Bush’s Health Plan: Only the Healthy Need Apply

by

Last week, former Florida Gov. Jeb Bush put forward a healthcare proposal as part of his campaign for the Republican presidential nomination. The plan, which has many moving parts, is intended as a replacement for the Affordable Care Act. If you don’t anticipate getting sick, you might like it. Instead of healthcare exchanges and mandated insurance, Bush’s plan would provide tax credits for buying catastrophic coverage. This means the government would pick up a substantial share of the cost of a plan that has a large deductible, with the insurance only kicking in after a person had paid close to $7,000 out of his or her own pocket, or $13,000 for a couple.

At the same time, the Bush plan would eliminate the requirement that insurers disregard preexisting conditions. Under the ACA, a person with cancer or diabetes can sign up for insurance and pay the same premium as a healthy person of the same age. While the Bush plan does include some protections, it does not guarantee coverage at an affordable price. In this respect, the Bush plan is quite explicitly designed to shift costs from the more healthy to the less healthy.

The goal of the ACA is to get everyone into a common pool and share the costs, regardless of whether we have good fortune in terms of our health. It doesn’t do this perfectly, because there are still choices on coverage levels — consumers who choose gold plans are in a different pool from those who choose silver plans, and so forth — but this is its general direction. The Bush plan would take the country in the opposite direction, making it much easier for healthy people to avoid paying the cost of treating the ill.

In spite of this difference, there is an important area in which the two plans are similar.

Beginning in 2018, the ACA imposes a “Cadillac tax” on healthcare plans that cost more than $10,200 a year for a single individual. The intention of the tax is to discourage plans that cost a lot up front but don’t make patients contribute much at the point of service — through copays and the like. That’s also what Bush’s plan sets out to do by promoting catastrophic insurance with a high deductible.

There are two problems with the logic of this tax. First, the reason most expensive plans are expensive is not the generosity of the benefits; it is the health condition of the participants. Most of the plans that would be subject to the tax have a disproportionate share of older workers with higher medical expenses. So the tax won’t primarily punish executives with luxurious, cushy plans; it will punish older workers who are more likely to have health issues.

The other problem with the tax — and the Bush plan — is that it assumes people would seek out more cost-efficient care if they paid for it out of pocket. But new evidence — from a study that came out the same week as the Bush plan — indicates that when people have to pay at the point of service, they often ignore necessary care. They don’t just skip frivolous or purely optional treatments; they choose their wallets over their well-being.

Furthermore, they do not do the sort of comparison shopping that economists like to see. People might shop around for clothes or cars; they apparently don’t shop around for colonoscopies or mammograms.

So both the Bush plan and the Cadillac tax will transfer costs from the more healthy to the less healthy. Both also rely on a disproven view that patients will be cost-efficient purchasers of medical treatment. Whatever their differences on other issues, Bush and Obama apparently have some common ground on healthcare.

This column originally appeared in the Los Angeles Times.

Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University.

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

April 27, 2017
Darlene Dubuisson – Mark Schuller
“You Live Under Fear”: 50,000 Haitian People at Risk of Deportation
Karl Grossman
The Crash of Cassini and the Nuclearization of Space
Robert Hunziker
Venezuela Ablaze
John W. Whitehead
Trump’s America is a Constitution-Free Zone
Ron Jacobs
One Hundred Years That Shook the World
Judith Deutsch
Convenient Untruths About “Human Nature:” Can People Deal with Climate Change and Nuclear Weapons?
Don Fitz
Is Pope Francis the World’s Most Powerful Advocate for Climate Stability?
Thomas Mountain
Africa’s War Lord Queen: The Bloodstained Career of Liberia’s Eleanor Sirleaf Johnson
Binoy Kampmark
Short Choices: the French Presidential Elections
Paul C. Bermanzohn
Monetizing My Mouth
Michael Barker
Of Union Dreams and Nightmares: Cesar Chavez and Why Funding Matters
Elier Ramirez Cañedo
“Let Venezuela give me a way of serving her, she has in me a son.”
Paul Mobbs
Cellphones, WIFI and Cancer: Will Trump’s Budget Cuts Kill ‘Electrosmog’ Research?
Incarcerated Workers Organizing Committee
The Closing of Rikers: a Survival Strategy of the Carceral State
April 26, 2017
Richard Moser
Empire Abroad, Empire At Home
Stan Cox
For Climate Justice, It’s the 33 Percent Who’ll Have to Pick Up the Tab
Paul Craig Roberts
The Looting Machine Called Capitalism
Lawrence Davidson
The Dilemma for Intelligence Agencies
Christy Rodgers
Remaining Animal
Joseph Natoli
Facts, Opinions, Tweets, Words
Mel Gurtov
No Exit? The NY Times and North Korea
Alexandra Isfahani-Hammond
Women on the Move: Can Three Women and a Truck Quell the Tide of Sexual Violence and Domestic Abuse?
Michael J. Sainato
Trump’s Wikileaks Flip-Flop
Manuel E. Yepe
North Korea’s Antidote to the US
Kim C. Domenico
‘Courting Failure:’ the Key to Resistance is Ending Animacide
Barbara Nimri Aziz
The Legacy of Lynne Stewart, the People’s Lawyer
Andrew Stewart
The People vs. Bernie Sanders
Daniel Warner
“Vive La France, Vive La République” vs. “God Bless America”
April 25, 2017
Russell Mokhiber
It’s Impossible to Support Single-Payer and Defend Obamacare
Nozomi Hayase
Prosecution of Assange is Persecution of Free Speech
Robert Fisk
The Madder Trump Gets, the More Seriously the World Takes Him
Giles Longley-Cook
Trump the Gardener
Bill Quigley
Major Challenges of New Orleans Charter Schools Exposed at NAACP Hearing
Jack Random
Little Fingers and Big Egos
Stanley L. Cohen
Dissent on the Lower East Side: the Post-Political Condition
Stephen Cooper
Conscientious Justice-Loving Alabamians, Speak Up!
Michael J. Sainato
Did the NRA Play a Role in the Forcing the Resignation of Surgeon General?
David Swanson
The F-35 and the Incinerating Ski Slope
Binoy Kampmark
Mike Pence in Oz
Peter Paul Catterall
Green Nationalism? How the Far Right Could Learn to Love the Environment
George Wuerthner
Range Riders: Making Tom Sawyer Proud
Clancy Sigal
It’s the Pits: the Miner’s Blues
Robert K. Tan
Abe is Taking Japan Back to the Bad Old Fascism
April 24, 2017
Mike Whitney
Is Mad Dog Planning to Invade East Syria?    
John Steppling
Puritan Jackals
FacebookTwitterGoogle+RedditEmail