Democrats are proposing to control future Medicare costs, and Republicans are trying to stop them. Who knew? This could have been the perfect “Nixon in China” moment. Democrats—who created Medicare and for decades resisted GOP moves to curb the program—control Congress and the White House. A Democratic President has embraced modest efforts to slow the program’s unsustainable rate of growth. Drug makers, doctors, and hospitals all swallow hard and buy into the idea. It could be the perfect moment for a bit of desperately needed fiscal responsibility.    more »

Years ago, when I first started writing about health care, I came across a press release that said three new cardiac centers had opened in a Midwestern city and that, as a result, the costs of heart care in that town were expected to rise. This seemed contrary to all I had ever learned about supply and demand. But it was a powerful lesson. Health care economics, it turns out, is an oxymoron. The normal rules don’t apply.   more »

One of our readers, Kevin, wrote to say he was confused by my description yesterday of the premium subsidy in Senate Finance Committee Chairman Max Baucus’ health reform plan as a tax credit. “It sounds like a voucher to me,” he wrote. Sounds like a voucher to me too. Except it isn’t. The proposal would work like this: Everyone would be required to buy insurance, and low- and moderate-income people would get a government subsidy to help out with the premiums. The subsidy, however, is designed as a refundable tax credit paid directly to insurers. The size of the credit is based on an immensely complicated sliding scale.    more »

Lots for tax wonks to chew over in Senate Finance Committee Chairman Max Baucus’ health bill. The measure, which has yet to garner any Republican support, is already being called an opening gambit and is likely to be revised as it heads to committee markup next week. Still, it is an indication of how intertwined tax and health policy have become in recent years. Here are some of the key provisions:    more »

As rhetoric, President Obama’s speech last night was an A+. As policy, it was the clearest description we’ve yet heard of what he really wants. As a step towards getting a bill passed...we’ll see. Here are some thoughts about what the President said. After a summer of confusion, Obama told us what he wants health reform to look like: Everyone would be able to buy insurance at a reasonable price, regardless of health status; everyone would have to purchase coverage; government subsidies would be available to help many (though not all) of the uninsured buy coverage; and any bill would be fully funded. This is insurance restructuring, not system reform. Still, if Washington can pull it off, it would be a very impressive achievement.    more »

Before you give up entirely on the idea of health reform, take a look at the Healthy Americans Act, a broad-based reform bill with some interesting tax provisions sponsored by senators Ron Wyden (D-Ore.) and Robert Bennett (R-Utah).    more »