So if the Democratic plans are dead, what's left? What's the Republican plan?
I think those of us who opposed the Democratic bill should have one. And I happen (ahem) to have a modest little plan right here . . .
Raise the Medicare tax by half a percentage point, and eliminate the tax-deductibiity of health insurance benefits for people making more than $150K a year in household income, $100K for singles. Then make the federal government the insurer of last resort. Any medical expenses more than 15% or 20% of household income, get picked up by Uncle Sam.
Yes, people don't like taxes. But it's a pretty small tax. The benefit exclusion gets the camel's nose under the tent for ending the employer-health insurance relationship, but it's targeted at groups that a) aren't particularly sympathetic and b) can afford it. And it answers the central fear people have, which is that they'll end up sick and bankrupt. 20% of your income is a lot. But it's a manageable amount, especially if, as I suspect, many more people choose to self-insure for the first 15%, and take the differences as wages.
It doesn't answer every single thing we could possibly want--David Cutler argues that compliance with treatment regimes is already so low that we don't want to erect any cost barriers. But it's progressive, solves the biggest part of the problem, and it still leaves the market for most health care services intact.
In fact, I think it will be a more powerful impetus for cost control than any excise tax or IMAC could have been, because consumers will be making the decisions by themselves, not sullenly fighting an insurer, employer, or government bureaucrat. It doesn't exert cost pressures on end of life care, which will certainly blow the caps--but I found it pretty implausible that we were ever going to find the political will to cut off marginal treatments to the sickest and most vulnerable. And in other areas, it could make a big difference.
Meanwhile, whatever awesome plans Democrats had to control costs in Medicare and Medicaid, they should implement and show us all how well they work.
That's my suggestion. I'm sure you can pick holes in it, and it might be pretty ugly by the time the lobbyists got through with it. On the other hand, it just might work.