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The Agenda

NRO’s domestic-policy blog, by Reihan Salam.

PPACA is a Coverage-First Law



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During the health reform debate, there was much discussion of whether or not the president’s universal coverage approach was a coverage-first approach or a cost-control-first approach. I was very gratified to see Ruth Marcus, a columnist for the Washington Post, acknowledge that PPACA is a coverage-first law, and that a number of Democratic policy thinkers are openly discussing the centralized administrative price controls they envision for the U.S. health system. One passage in particular struck me as particularly interesting:

Competitive bidding for medical equipment such as wheelchairs has lowered costs by more than 40 percent, the authors note; this bidding system, rather than having the government fix reimbursement levels, should be expanded, instituted immediately and used by private insurance exchanges as well.

Competitive bidding for delivering the Medicare benefit is, of course, the centerpiece of the Wyden-Ryan Medicare reform proposal, which has been a source of so much controversy. The obvious rejoinder is that competition doesn’t work the same way in every domain — medical equipment is different from the provision of social insurance, in which risk selection dynamics could play a significant role. But I found this passage amusing all the same. 



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