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If Republicans Are Serious on Health Care...

Republicans on the whole don't seem particularly serious about trying to fix the nation's health care system or even trying to fix health care reform. Ross Douthat would like to change that. In his New York Times op-ed column this morning, he urges Republicans to suspend, at least temporarily, efforts at repealing the law outright and to focus on changing some of the law's worst elements:

What Republicans need is a different kind of incremental approach, one that uses the strongest conservative critiques of the health care bill as a framework for a reform of the reform. If Obama is defeated in 2012, this framework could easily be adapted into a full scale repeal-and-replace effort. But in the event that he’s re-elected, it would offer a Republican Congress a blueprint for improving the law without doing away with it entirely. ... in the unlikely event that the president did embrace a reform of the reform, conservatives would have an opportunity to transform Obamacare from within. With the right changes, the new health care law could expand access to insurance in a more cost-effective, less coercive and more market-oriented way. Which is to say, it could become the kind of reform that conservatives claim to have been looking for all along.

Douthat, to his great credit, seems genuinely interested both in improving public policy and making health care more accessible. But I want to say something about one of his recommendations: altering the Affordable Care Act so that it encourages more people to use high-deductible insurance.

Douthat has made this argument before and he's not the only one. One of the most common complaints I hear from the right is that the Affordable Care Act will, as Douthat says, foster a system in which "every insurance plan has to be comprehensive, every significant payment is made by a third party, and consumers have no idea what their treatments actually cost." This would be problematic, Douthat and the conservatives say, because it encourages more health care spending.

The thing is, I'm not sure the Affordable Care Act really does that, at least in the way that the conservatives think.

Look closely at the standards for coverage in the insurance exchanges: The minimal, or bronze, insurance option allows out-of-pocket spending of up to $12,500 for a family of four. The actuarial value is 60 percent, which means, very roughly, that the plan only covers about 60 percent of the average person's medical bills. Those are some pretty high deductibles! I haven't made the apples-to-apples comparison and I don't know anybody who has, but I'm pretty sure the overall exposure is comparable to what you get in a Health Savings Account, which is the model Douthat and conservatives generally say they want.

Mind you, I'm not exactly happy about this: I think the out-of-pocket protections should be stronger. But precisely because this aspect of the Affordable Care Act makes me uncomfortable, I'd expect conservatives like Douthat to take some comfort in it--more, at least, than they do now.

Now, the Affordable Care Act does mitigate the effect of high cost sharing in a few crucial ways. Under the law, even the bronze plans will include the benefits in the basic, government-defined package--with no annual or lifetime limits on total claims paid. That's a vast improvement over the present individual market, in which policies can have huge, hidden gaps that leave unsuspecting consumers paying bills they'd assumed were covered.

More important, the exchanges will have subsidies to offset both the premiums and cost-sharing for people who make less money. So poorer people would never face anything like $12,000 in out-of-pocket expenses; that's the reason I can live with the high deductibles.

Maybe that's what Douthat doesn't like about the Affordable Care Act. But my impression was always that conservatives like him weren't looking to stick lower income people with cost-sharing they really couldn't afford. What they wanted was cost-sharing severe enough to impose some price discipline on the system, which the Affordable Care Act would seem to do.*

Again, I don't want to discourage constructive dialogue about the Affordable Care Act on the right. But I wouldn't mind seeing it go in some different directions, perhaps starting with malpractice reform. Although the Affordable Care Act includes some promising initiatives that could both reduce the number of lawsuits and improve patient safety, these initiatives could be a lot bolder. Trial lawyers would object, I know. But I assume that Republicans would find such objections a virtue, not a bug.

*I'm talking mainly about within the new insurance exchanges, where the Affordable Care Act makes the most sweeping reforms. Employer-sponsored insurance is another story, but further encouraging high-deductible coverage in that market gets very complicated, very fast--and I'm going to spare readers that for now.