Health reform: the good, the bad, and the bottom line

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.