Criticisms of the Kennedy Health Plan

First let me say that whether you agree with his politics or not, he has worked tirelessly to get healthcare reform for the last thirty years. That being said, I have a lot of problems with his proposal. I'm reviewing his first since it was one of the first proposals out and it has just been evaluated by the CBO (Congressional Budget Office).

I will not review any "plans" that have not been put forth as bills (i.e. obamacare). Little snippets are not appropriate to determine the good and bad of a plan. You need the whole thing to get proper context.

This is what i don't like about the Kennedy plan:

1. Has local state exchanges (Market to buy heath insurance) rather than one large federal one. I prefer the federal exchange model as it increases the size of the risk pool which has more leverage for negotiating prices such as prescription drugs. And it requires less administration. Each state will have its own exchange with its own administrative costs and bureaucracy.
2. Undermining of employer-based insurance. According to the CBO paper, this plan will REDUCE employer coverage for 15 million people. So while 39 million will get coverage through the exchanges, 15 million or so already had coverage, and according to the CBO there are other losses of coverage in the Medicaid sector, so there is only a net gain of 16 million insured.
3. There is a fee for not being insured. In order for risk pooling to work, you need to have the whole population insured. In particular, the young healthy people who don't get employer coverage must be brought into the plan. This should be done by automatic enrollment, not by a fee. There should be some minimal catastrophic plan that you are enrolled in - if you have sufficient income, with the cost deducted by IRS filings. A $100 yearly penalty does not address the risk pooling issue and undermines the agreement with insurers to eliminate pre-existing conditions if all people under 65 are required to have coverage.
4. Rather than continue the Medicaid bureaucracy, all Medicaid enrollees should be rolled into the exchanges and receive subsidies for the cost of the policy. If we have to create one bureaucracy (i.e. health care markets/exchange), let's eliminate one also (Medicaid).

Considering this plan costs 1 trillion over 10 years, there is too high a cost for too few added coverage. There are better plans out there. We should look elsewhere.