Conservatives Still Don't Have a Health Care Plan

Kevin Drum has a really good post, Conservatives Still Don't Have a Health Care Plan.

First he quotes Matt Yglesias on a conservative replacement for Obamacare:

"The core of a replacement would be a change in the tax treatment of health insurance. The tax break for coverage would be flattened and capped so that people would not get a bigger break the more comprehensive their insurance. The break would also be extended to people who do not have access to employer coverage....Once a robust market for individually purchased insurance has emerged, the problem of people who are locked out of that market because of preexisting conditions should diminish: People will have both the incentive and the ability to buy cheap, renewable catastrophic policies before getting sick."

Then he says why it won't work:

"Catastrophic insurance is already available to individuals, but there's no robust market for it. Nor will different tax treatment change that: Insurers will continue to discriminate based on health status; they won't offer renewable policies to everyone; and policies will remain too expensive for low-income workers. Being able to buy them with pretax dollars won't change that, since most low-income workers don't pay very much—or any—federal income tax in the first place. A tax credit or a subsidy might help, but then you're back to Obamacare—except that instead of offering poor people subsidies for actual health care, you're offering them only the opportunity to make premium payments for a policy that probably won't do them any good and that they can't afford. So they won't buy them."

But then he gets to the point:

"that health insurance, as currently provided, isn't true insurance. It doesn't protect you against big but unlikely events, like auto insurance or fire insurance. It simply pays for health care."

"Once you do that, you run into a hard, shiny nugget that you can't wiggle around: about a third of the country, maybe more, just flatly can't afford decent health care for their families. No amount of smooth talk about HSAs and tax treatment and catastrophic care will change that. So you can either pay for this coverage via tax dollars or you can let them go without, and chalk it up to nature red in tooth and claw. Insurance is a red herring. It's not the primary cause of high health care costs in America, and offering different kinds of insurance, or making it available across state lines, won't change things by more than a hair. The problem is the actual provision of health care. If you want to do that via a private sector middleman, that's fine. Unnecessary, but fine. But you still have to pay for the actual health care somehow. When conservatives have a plan for that, let me know."