Health Reform: The Good, The Bad, And The Bottom Line

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Abstract
The Health Security Act is a pragmatic plan for achieving universal health insurance coverage for a broad package of benefits at reasonable cost. It proposes necessary and reasonable changes in insurance market practices and administrative structure. It finances the reformed system with a credible combination of achievable cost savings, mandatory private-sector payments, and limited “sin” taxes. Political constraints—the inability to tax openly or redistribute tax subsidies— result in weak incentives for consumers to choose low-cost plans and an inefficient scheme for providing subsidies to the poor. The act also unnecessarily restricts and regulates fee-for-service plans and the training of health workers. We propose changes to correct the act's weaknesses without compromising its basic objectives.