In which Avik Roy almost makes sense...but kind of misses the point in the end.

Hat Tip To: 
Mark N.

Thanks to contributor Mark N. for bringing my attention to this piece by Avik Roy (with whom regular readers know I've butted heads with on a number of occasions). Interestingly, he seems to have written this piece specifically for Politico, not for Forbes where his stuff can usually be found...although he did post a follow-up piece addressing (right-wing) criticisms of his plan at Forbes. Not sure of the significance of that.

Anyway, Mark gives a nice summary of the original article:

...the "keep Obamacare" and ditch Medicare. In other words, run the elderly through the Obamacare exchanges using premium support etc. but making the rich elderly pay their way. The average cost per month of a Medicare beneficiary is about $1000, I learned recently, which is not horrendous. I can't stand Avik. But this is the first thing he ever wrote that I can relate to. My 23 year old waitress daughter is paying taxes to support a bunch of elderly people who have 1000 times as much money as she does. You see my point.

So, I read Roy's plan, and it's cetainly interesting, especially coming from someone who spent 2012 as Mitt Romney's healthcare policy advisor.

As anyone not in a coma for the past few years knows, Mitt Romney actually instituted "Obamacare" at the state level in 2006 and then pushed for it to be instituted nationwide in 2009...only to have to do a 180-degree turn just a few years later and promise to repeal the very law which he had implemented himself in Massachusetts if elected President...simply because the Democrats had beaten him to the punch nationally, and the Tea Partiers who have now completely absorbed the Republican Party couldn't stand the idea of supporting any law passed by Barack Obama, even if it was their own Presidential nominee who gave the Dems the idea.

And poor Avik Roy was one of the guys tasked with trying to explain these logical gymnastics to the voter base at large, a Herculean task to say the least.

In any event, there's a several parts of Roy's plan which make sense on the surface, including ideas like "making the rich pay their fair share". Of course, that's not exactly how he words it:

Rep. Paul Ryan’s proposal to reform Medicare—giving future retirees “premium support” subsidies to shop for private health insurance—is, in fact, quite similar to Obamacare’s usage of “premium assistance” tax credits to offer coverage to the uninsured. So what if we used Obamacare to reform Medicaid and Medicare, by gradually migrating future retirees and Medicaid recipients onto a reformed version of Obamacare’s exchanges?

The problem with doing it the way he describes is that it still amounts to the one thing that progressives such as myself hate about the Affordable Care Act (even if I support it as doing more good than harm overall): It gives gobs of taxpayer money to private, for-profit corporations which have a long history of abuses (that's one of the reasons the regulations in the ACA were necessary in the first place, after all), while simultaneously wiping out the Medicare program which (despite its flaws) has been one of the most successful and popular laws in the history of the United States.

Roy then goes on to argue--amazingly, given who he and his target audience is--that the United States should use Switzerland as the model for the transformation of our healthcare system:

The Swiss system works because it’s a true safety net. Swiss premium subsidies are focused exclusively on low-income individuals. In America, by contrast, we spend trillions of dollars subsidizing health coverage for wealthier people. Swissifying the U.S. entitlement system is a way of bringing long-desired means-testing to Medicare and other insurance subsidies.

Somehow I don't think that's going to go over too well with your "anything remotely European-ish is eeeevil!!" fan base, Avik, but more power to you.

Finally, Roy makes a curious argument for his plan as a political winner:

There are political benefits to implementing the plan without repeal. Democrats accused Paul Ryan of trying to throw granny over a cliff—but would be hard-pressed to make the same accusation against a plan that migrates future retirees onto the exchanges that Democrats voted to install.

Well, he could be correct here, but only in the sense that Democrats have traditionally been absolutely terrible at messaging. However, the premise of his argument is completely backwards here. The Democrats didn't (for the most part) vote to "install the exchanges" of the ACA because they thought this would be a wonderful system. Most of them voted for it because even with its flaws, it was still a better system than what we had a few years ago. The Affordable Care Act is (in my view) the first step on a path towards Single Payer healthcare, which is indeed what we should be striving towards.

With that in mind, from my perspective, Roy has it completely backwards: Instead of phasing Medicare and Medicaid out and expanding the private, for-profit exchanges, we should be moving the other way around, by using the exchanges as the first step towards expanding Medicare so that it covers everyone (along with a serious review of how the program is managed)...thus making the exchanges, along with most of the technical bugaboos and confusing subsidy-calculation formulas (and, frankly, this very website), pretty much moot.

I celebrate the success of the ACA exchanges not because I want them to become permanently entrenched, but because they represent an incremental improvement over what we had...and lay the path for something better in the future.

As for the "means testing" part that both Roy and contributor Mark refer to, I have absolutely no problem with making the truly wealthy pay more for Medicare than those less able to afford it. However, the solution to that is to change how Medicare taxes and premiums are calculated and enforced, not to throw everyone off of a system which we should be expanding.

UPDATE 8/26/14: Xpostfactoid has written up a much more extensive and better-informed analysis of the flaws in Roy's plan (and managed to do so 7 months prior to Roy actually publishing his plan, which is a pretty neat trick!

The gist of it (some points of which have been brought up in the comments below) is that Roy is cherry-picking the elements of the Swiss system that he likes while ignoring the parts he doesn't like...which are part of what make the "good parts" feasible.

This sounds awfully similar to the way that Republicans love to bash "Obamacare" while simultaneously heaping praise on the parts of it that they supposedly approve of...ignoring the fact that most of those parts are only feasible due to the unpopular elements.

Anyway, read his whole piece if you're interested in this stuff (which I assume you are, or you wouldn't be reading this in the first place lol...)