He’s nailed the trends and the fixes. Here’s a sliver:
Reform Idea: So what can be done? To ameliorate all five trends and neutralize perverse incentives there should be a government commitment of $X (in this case $1,500) to every individual. Those who choose private insurance would receive a refundable tax credit to offset premium costs. For those who do not insure, $X would be sent to local safety nets in the communities where they live – to be spent on Medicaid-type programs or on free care services.
This plan (1) makes private insurance just as attractive as public insurance as far as subsidies are concerned, (2) makes a fixed financial commitment to every individual, (3) lets money follow people as they move from insured to uninsured status and vice versa, and (4) guarantees a minimum per capita funding for the safety net.
Now read John’s five megatrends. They’ll be similar to ones I’ve enumerated here. Remember, that direct subsidy of healthcare will remove some if not all of the distortions of the current system.