The John Edwards Health Plan: Is It the Solution?

It's a thoughtful and interesting plan - one that holds government accountable while creating some opportunities for innovative public/private collaboration.
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I won't answer my own question until the end, but I will tell you this up-front: I have questions about the John Edwards health plan, but overall I like it. A lot. I'm not prepared to give it as strong an endorsement as Ezra Klein or others, however, until those questions are answered. And there are some things I would do differently (although the Edwards plan resembles my own "proposal" for health reform.)

As of now, however, it looks like Edwards has placed himself in the lead on this critical issue. It's a thoughtful and interesting plan - one that holds government accountable while creating some opportunities for innovative public/private collaboration. (I discuss the tech and business implications of the plan in more detail here).

Some further thoughts:

First, I appreciate Edwards' candor in acknowledging that the plan will cost money - lots of money. Too many reform proposals dance around this issue, and wind up offering little more than shell games that burden the uninsured (on a relative level) more than they do anyone else - and provide a forced market for inefficient health insurers in the bargain.

The plan creates new regional agencies called "Health Markets" that enroll members, collect premiums, negotiate with private insurers, and provide other services. Sen. Ron Wyden's Healthy Americans Act would also create agencies, called Health Help Agencies. The devil's in the details, but - if designed and managed correctly (and that's a big "if") - these agencies could be forces for positive change.

Edwards proposes doing something I've been supporting: Allowing individuals to choose between private insurers and a public Medicare/Medicaid program. That would prevent radical disruption of healthcare delivery, while forcing private insurers to become much more efficient than they are today. If they can't, market forces will cause the "withering away of the private sector" and evolution to a single-payer system.

("Withering away of the state" was the old Marxist goal. It's interesting to contemplate government takeover of the health economy happening in reverse - but with a twist. If the private sector can prove it really is more efficient - or can if it become more efficient - it stays in the game and might even gain ground.)

Edwards would require "fair premiums" for insurance, as well as tax credits to help with premium payments, and he would expand Medicaid and SCHIP (for childen). And he wants to "empower patients through transparency" by making provider report cards available to individuals, while promoting evidence-based medicine and better medical information-sharing.
There's more, but those are the essentials. I think Edwards emphasizes the right issues, shows a strong vision for health reform, and creates a gradualist plan that has a strong chance for success. Now for my questions and concerns:

The concept of "Individual Responsibility" is legitimate, but runs the risk of penalizing individuals who sincerely can't afford health coverage. Again, the true impact of the program will be in the details: how much premium will be charged, how will it be calculated, etc.

Plan design is critical, too. One of my concerns about the Wyden plan is that many lower-income Americans can't afford the high deductibles and copays that go with "the same coverage Congress gets." We'll be looking for more information on this from the Edwards camp.

It's also not clear to me what would happen if an employer elects to purchase health insurance for its employees. Would those employees have a choice between joining the group plan or buying their own coverage directly from the Health Markets? That could be an important issue.

[My use of the word "voucher" in my own plan upset some people, as I thought it might, because of its Friedmanesque ring. (Milton, not Tom.) I felt that employers could have the option of offering group health plans, which employers could join using vouchers if they found them attractive. Otherwise, they could be used as credit to buy into something like a Health Markets program.]

So is the Edwards plan "the solution"? No, and my concerns aside, that's one of the things I like best about it. The "Health Markets" approach suggests that it's designed to evolve, rather than impose change from above, while guaranteeing certain basic "health rights." That's an approach I think can work - politically, and structurally.

The plan may not be perfect, but it's a very strong start. John Edwards has set the bar at a high level, and the other Democratic contenders now will be under pressure to respond accordingly.

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