THE PURPLE HEALTH REFORM PLAN

The reds and the blues have been engaged in a running gun battle over health reform for a long time. But, as David Hogberg reports at IBD, one group of economists believes it is possible to achieve progressive aims by market-based means:

Boston University economist Laurence Kotlikoff … seeks to achieve the liberal goal of universal care via a market-oriented voucher. Several prominent Nobel Prize economists have endorsed the Purple Plan.

How would it work?

The plan, unveiled last week, would pool funds from the employer-based tax exclusion, Medicare, Medicaid and other federal health programs, giving every American a voucher to buy a standard health policy.

And, as to cost control:

To limit costs, federal and state government could spend no more than 10% of GDP on the vouchers. That would come out to about $4,800 a person, though the size would be adjusted based on individual risk.

The plan also includes tort reform, coverage for pre-existing conditions and features a panel of physicians who would decide what benefits are covered. All of this sounds reasonable, and some very smart people have endorsed Kotlikoff’s idea.

The probem, of course, is that it makes a couple of assumptions that probably are not realistic. First, it assumes that progressives are really interested in universal health care when their behavior suggests that reform is merely a pretext for a larger statist agenda.

Also, central panels deciding benefits and maximum spending limits are not going to go down well with free market purists. And with good reason. That’s how the AMA became a government contractor instead of an association representing practicing physicians.

So, my bet is that “the Purple Plan” is not going to get very far.

Comments 2

  1. Howard wrote:

    I believe under this plan you could BUY supplemental insurance. One question, does EVERYONE get a voucher? And if so does this eliminate employer provided insurance?

    Posted 09 Apr 2011 at 5:03 pm
  2. Dave wrote:

    There’s an even simpler plan: Disallow employer contributions to health care plans as a business expense. Employer-based health insurance plans would vanish overnight. Everybody would be in the same boat- looking for affordable health care. The result would be a free-marketer’s delight. If you want better insurance, you then spend more for it.

    I want the plan that provides me with a doctor’s routine care, antiobiotics, painkillers and *basic* surgical care- appendectomies, reduction of fractures, etc No transplants, cardiac implants, nor knee replacements after years of accumulated trauma to your body. If I get sick enough, I’ll die. To my knowledge, no such plan exists.

    Until then, we’re all living in a dream-bubble. We want the best medical care in the world but don’t want to pay a lot for it!

    Posted 14 Apr 2011 at 11:53 am

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