Unessential politics=no net benefits

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Article Highlights

  • Determining the essential health benefits for tens of millions of Americans to-be-implemented under the Affordable Care Act

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  • Government has conflict of interest when it acts as both the regulator and purchaser of health benefits

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  • The key issue is "who" decides, rather than "what" the right political decision should be

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Last Thursday, the Institute of Medicine finally released its long-awaited set of recommendations for how the Secretary of Health and Human Services should accomplish the impossible--determining the "essential health benefits" for tens of millions of Americans under the to-be-implemented Affordable Care Act. Early reviews indicate that, not surprisingly, there is no way to please everyone, or perhaps even anyone, in this highly political exercise. The countervailing pressures "essentially" are that one side wants to ensure that benefits are more comprehensive and generous to ensure that everyone either gets what they want, or what other interests and experts think they must get anyway. The other side (paying for those essential benefits) worries that setting benefits levels too high will only drive health care costs even higher and make insurance coverage even less affordable and available. This traditional dilemma arises whenever health benefits policy must be determined through the pressure cooker of health care politics and the HHS bureaucracy.

"The key issue is "who" decides, rather than "what" the right political decision should be." -- Thomas Miller

Some quick lessons from the early phase of this fruitless exercise:

- This is the inevitable result of over politicizing the complex personal tradeoffs involved in choosing affordable and necessary health benefits.

- One man's ceiling is another man's floor.

- The IOM expert committee already over 300 pages just to suggest "how" to make these determinations, and it could not even decide on "what" should be included as essential health benefits.

- Even setting the initial level of EHBs at that of the "typical" small employer health plan will subject the latter to future cross pressures that will drive those costs higher over time.

-The government has an inherent conflict of interest when it acts as both the regulator and purchaser (or subsidizer) of health benefits.

- The key issue is "who" decides, rather than "what" the right political decision should be.

- We need to delegate much more of this balancing act to millions of "private and personal" pressure cookers, rather than to a single one sitting on top of the dysfunctional stove in Washington.

Thomas P. Miller is a resident fellow at AEI.

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