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Dear Fiorina and other Candidates: How to Answer Questions about Entitlement Spending

By: ehud (Diary)  |  October 17th, 2010 at 04:38 PM  | 

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I just finished watching a rather pathetic interview of Carly Fiorina on Fox News Sunday. Chris Wallace kept asking how she would cut spending and reform entitlements and she kept dodging the question and wouldn’t give specifics. Now I understand Boxer would use it against her if she said she was going to cut Medicare, and the same is true of all the other candidates. So how should all our candidates answer this question?

It’s really very simple: The big driver of entitlement spending is Medicare and we are going to make that cheaper by reforming the whole health care system. This gives the candidate a chance to talk about positive things the republicans will do with health care and gives them a chance to slam obamacare.

The points to make are:

1. Health care is expensive because it’s a third party payer system.

2. We should move away from employer healthcare by having tax-deductible insurance for individuals.

3. Let’s let people buy insurance across state lines.

4. Let individuals and small buisnesses join together to buy group policies as a way to create risk pools and have negotiating leverage.

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COMMENTS

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  • dvdmsr

    coupled with high deductable catestrophic health insurance coverage – W/o them your reforms still fall prey to the third party payer (the insurance companies) criticism. Your reforms + #5 put the consumer back into the equation and helps to restore market mechanism that are essentail for driving quality, efficiency, and affordability.

    IDK – If she did as bad as you think – She said controlling spending was only part of the plan to reduce the deficit. The other part being stimulative tax cuts. I think it was a great pivot. She used the opportunity to sell (Bush) tax cuts as a means to making the US more competitive internationally as a place to produce goods and services (creating job growth), to stimulating the economy, and thus raising revenues.

  • JSobieski

    Its a violation of existing law (not to mention impossible) to create an HSA account without also establishing a corresponding high deductible policy.

    While HSA plans can be linked to insurance based coverage, they clearly point towards the direction of delinking health insurance with employment.

    In terms of Carly, we need more candidates to talk more about economic growth. Economic growth is a necessary precondition for dealing with the deficits, and green eye-shade deficit hawkism has always been politically inferior to low-tax economic dynamism.

  • acat

    I got an HSA set up while I still had a COBRA low-deductible plan…

    Nobody at the bank asked *any* questions about my plan or my plans to replace it. Nada. Zip.

    So .. while it only makes *economic* sense to have an HSA if you know you’re going to have to cover some big expenses – like if you have a high deductible plan – I don’t believe it’s a law. It’s just that, most people won’t look at HSAs unless shoved firmly toward them…

    Mew

    (and for the curious, I’ve had mixed success with mine…)

  • dvdmsr
  • Kyle-MI

    It is only slightly less dangerous than Social Security reform.

    You may say that you want to cut the third payer system, but Democrats will attack it as taxing workers medical benefits.

    I hate that voters buy into the Democrats’ lies on both SS reform and medical insurance reform, but I can’t see any way around them. It is going to take a major long-term voter education effort for either.

  • JSobieski

    Otherwise, everyone would set up HSA accounts for tax avoidance purposes. There are rules about that sort of thing. Heck, not everyone is even allowed to setup an HSA, period.

    Are you sure you are not talking about an FSA? FSAs do not involve an insurance requirement.

  • JSobieski

    To the contrary, you can just provide individuals with the same tax credit on policies they buy individually.

    Eventually, everyone will just migrate to an HSA framework that is not employer dependent.

  • JSobieski

    http://healthsavingsaccountrules.com/

    “In order to establish a Health Savings Account ( HSA ) you must have a High Deductible Health Plan ( HDHP ).”

  • acat

    I mean, my current deductible is over $5000… and I had a $1200 deductible for quite a while before I ever had an HSA….

    Mew

  • JSobieski

    I tried looking for a deductible higher than $5k, but since the HSA account cannot add that much in any single year, I was unable to do so.

    Look, getting everyone to a $1k deductible would do more for health care reform than anything anybody has implemented in DC over the past 4 years.

  • acat

    Are you making the argument that, because people have too little “skin in the game”, that is, because they don’t see where they are paying for their health care choices, they tend to abuse the system?

    If so, I tend to agree with you – and agree that getting everyone on a plan with a deductible of at least 1% of their take-home, they’d think some before going to the ER with sniffles.

    Mew