Every American, whether rich or poor, should have access to affordable, quality health care.
- Every American, whether rich or poor, should have access to affordable, quality health care. Any action government takes on healthcare should support that objective.
- The Affordable Care Act (“Obamacare”) moved health care reform in the wrong direction. By involving government even more directly in one-sixth of the American economy, increasing regulations, and expanding subsidies, the result was an increase in health costs, particularly insurance premiums and deductibles, and a decrease in consumer choice.
- Since the ACA took effect, millions of Americans have lost their health care plans altogether, while millions more have seen staggering cost increases that call into question the value of having health care coverage at all. Obamacare must be fully repealed and replaced with consumer-friendly options which benefit not just some, but all Americans.
- State governments know the needs of their people far better than bureaucrats in Washington, DC. For the American people to have the best, most affordable health care possible, as much authority and control over health care policy as feasible must be transferred from the nation’s capital to our state capitals.
- Health care costs grow faster than any other sector of the American economy, yet government overregulation stifles innovation that would keep costs reasonable. We must remove the barriers to entry and innovation and allow the private sector to blossom as it would in the absence of crippling regulatory hurdles.
- Increased government involvement in health care, particularly subsidization of care and the expansion of entitlements, is the greatest single driver of increased health care costs. Subsidization artificially increases demand, without a mechanism to pay for it, increasing system costs.
- Current tax laws favoring employer-provided health insurance distort the market and discourage individual ownership of health insurance, also increasing costs to consumers.
- The inflation of the concept of “insurance” to include virtually all health-related procedures and services has also driven up costs.
Every American, whether rich or poor, should have access to affordable, quality health care. Unfortunately, health care policy over the past half-century has created a landscape where increased government involvement, subsidization, control, and overregulation have distorted the health care market, driven costs up exponentially, and increasingly limited the amount of control Americans have over their health care, including the ability to choose – and more importantly, keep – their doctors.
While government involvement in health care has been steadily increasing for decades, the 2009 Affordable Care Act (“Obamacare”) marked a major expansion of government into the industry, representing what amounted to a federal government takeover of fully one-sixth of the American economy. No one would argue that America’s health care system was perfect prior to the implementation of Obamacare, but – purely partisan hyperbole aside – you would be hard pressed to find a majority in any room, including in the health care profession, who would suggest that the ACA made our lives better.
In Colorado alone, over 300,000 people lost their health care plans since the implementation of Obamacare, not including the 83,000 who found themselves without coverage following the 2015 collapse of Colorado HealthOP, the state exchange that Obamacare created.
The horrifying numbers that the ACA created (see “Statistics”) are remarkable, and certainly support the general impression that the program has been a failure. A winning proposal on this important subject requires real, lasting solutions that will benefit all Americans, rather than helping some while hurting others.
Fortunately, there are sound, market-driven ideas on offer that would change the game for the betterment of everyone in the country. These solutions require the participation of the individual states to innovate, compete, and ultimately provide their citizens with access to the best possible care.
First, on a national level, Obamacare must be repealed and replaced with a number of consumer-friendly options. Among the solutions proposed:
- Promoting innovation in the health care industry by removing the regulatory barriers that the federal government has imposed (whether in the FDA, National Institutes of Health, or elsewhere). In an industry in which costs grow faster than any other part of the American economy, it is critical that innovators have every chance to find breakthroughs that would lower consumer cost wherever possible.
- Likewise, America must have an individual health care market that is both qualitatively comparable and cost-competitive with that of the employer health insurance market (the latter covers over 150 million Americans, with overwhelming success). To improve the quality of, and increase access to, individual coverage, there are many options. Among them:
- Improving and expanding access to Health Savings Accounts;
- Providing tax credits for those who purchase plans on the individual market;
- Allowing small businesses to make tax-free contributions to their employees’ individual health care plans; and
- Improve portability of health insurance, either by enabling employers to purchase plans for their employees that can be owned and retained, or by allowing employees similar tax treatment as granted employers to purchase their own plans.
These are among policies that can, and should, be developed at the federal level. But the single most effective health care reform – concurrent with repealing Obamacare – would be taking as much power as possible out of the nation’s capital and transferring that authority to the states. The fact that different states have differing needs gets lost in the over-bureaucratization that is endemic to Washington. An effective plan would recognize and appreciate this reality and would empower states to do what is best for their people.
Gone would be the days of federally-dictated co-ops, like Colorado HealthOP, that were destined to fail from the start. States would be able to tailor their plans – and indeed, the marketplace as a whole – to the needs of their citizens. Coloradans would find themselves empowered with increased choice, greater transparency and innovation, and critically, lower costs.
The private marketplace has always yielded more innovative solutions to problems – far beyond health care – than anything that Washington has imposed. Giving states and state-based providers the opportunity to tailor their options to their citizens will likewise yield increased coverage and higher quality outcomes than anything Obamacare could possibly have hoped to accomplish.
There is a building push to move the United States towards some form of government-provided universal health care, such as the “single payer” system used by Canada. Under single payer, doctors, hospitals, and other providers remain ostensibly private, but the bills are paid by the government, via a public insurance plan. The proposal is also often dubbed “Medicaid-for-all”, or “Medicare-for-all.”
So-called “Medicare-for-all” would move health care policy even further in the exact wrong direction; while it would make health care “free” at the point of service, the actual costs of providing that care – the time and wages for doctors, nurses, and technicians, the diagnostic equipment, facilities, drugs, etc. – remain, with no mechanism to pay for their over-use.
As health care becomes “free,” demand for its use rises, resulting in even further over-utilization. As these inherent costs rise, the ability for the government to pay for them will diminish. As with any other commodity, health care is finite. In the absence of a mechanism to ration it through price, the only option available will be to ration through access and/or availability of services.
This forced, involuntary rationing of services results in the long wait times experienced in countries with socialized or single-payer health systems, and creates a severe restriction on the availability of and access to health care facilities, services, technologies, and treatments. In addition, the costs to the economy of having to publicly fund such a system are extraordinary and would necessarily result in egregious and unsustainable tax increases.
The arguments against single-payer point to the reason why the already substantial over-subsidization of health care in the U.S. is so responsible for much of our health costs. Medicaid and Medicare, which add up to a considerable percentage of national health care funding, contribute significantly to over-utilization. Medicare can and should be transformed into a means-tested program to ensure that low-income elderly are provided access to health care. Reforms to Medicaid, such as spending caps and programs to move able-bodied recipients onto private plans, are needed at the state level, and Medicaid funds should be block-granted to the states to allow them to pursue policies, aimed at reducing over-utilization, that work for their individual circumstances and market conditions.
The concept of “insurance” has also been turned on its head over the decades, as it relates to health care. Traditionally, insurance is a risk pool which one pays into to cover unexpected or exorbitant costs – such as damage to a home or automobile. However, health care insurance has evolved into a program to pay for any and all health care costs, including routine preventative checks and minor procedures. This has created a Leviathan middle-man that has also added to costs over time. While it may be difficult to put the genie back in the bottle, a movement towards reforming health insurance to return to its original intentions would likely go a long way to allowing market reforms to take hold and lower costs by greatly eliminating the third-party element.
Any realistic discussion of health care reform must include a recognition that certain government regulations designed to address specific and unique problems – such as the issue of pre-existing conditions – are extraordinarily popular and necessary to address in some manner. Portability – the ability of individuals to own and retain their health plans from employer to employer, and while in or out of the job market – will likely be a key component to addressing this concern.
Finally, it must be recognized that health care is not a “right” – every right has a corresponding duty, and a “right” to health care explicitly imposes a duty on every doctor, nurse, or other health care professional to provide their time, skills and expertise to all who demand it. Like all other scarce resources, health care is an economic commodity, albeit a vitally important one; and as the free market is the best mechanism for providing efficient distribution of goods and services, and increasing the affordability and abundance of commodities, it is also the best mechanism for increasing access to health care.
Free Markets: The free market does the best, most efficient job of controlling and lowering costs, by leaving economic decisions to the pressures of supply and demand. The free market breeds innovation, competition, and efficiency, which improve outcomes and make services more affordable and accessible.
Federalism and Subsidiary: Economic decisions are best made at the lowest feasible level. States are better positioned to make policy in this regard than the federal government, as market conditions vary considerably from state-to-state, and the state governments are closer to the people. This is in accordance with the wisdom of the 10th Amendment to the U.S. Constitution, which assigned all powers to the states which were not specifically granted to the federal government.
Fiscal Prudence: As stewards of taxpayer’s dollars, the government must make the best use of public resources. Subsidization drives over-utilization, which in turn drives up system costs.
Individualism: Individuals should be free to make their own health care choices, including which provider they wish to use. They should own their own health care plans, rather than having plans tied to their current job.
Personal Responsibility: Personal choices have a lot to do with health; the public financial burden of an individual’s poor choices should be limited.
- Drastically reduce the reach of Obamacare with the President’s signature, allowing states to opt out whenever most convenient. Doing so would largely dismantle the program almost immediately.
- Create a refundable tax credit that every American can use to purchase health care, increasing the value of the credits every year so that the individual marketplace is as attractive for Americans as employer-sponsored insurance currently is.
- Drastically expand Health Savings Accounts, giving consumers unprecedented decision-making power with respect to their health care decisions.
- Reform and strengthen Medicare and Medicaid so that it will be available to future generations. Transfer Medicare into a means-tested premium support system so that the neediest have the greatest access, and move Medicaid into a per-capita block-grant system to ensure the program’s funding while freeing it from the bureaucratic quagmires that currently undermine it and allowing state-based solutions to be enacted which best reflect the individual market conditions of each state.
- Remove bureaucratic obstacles to the purchase of health insurance across state lines.
- Pursue tort-reform policies to limit frivolous lawsuits, and exorbitant pay-outs, thereby reducing the crippling cost of malpractice insurance.
- Support relinquishing health care policy and decision-making authority back to the state level.
- Make reforms to the state’s Medicaid system, including:
- A cap on enrollment;
- An increase in fees and co-pays paid for physician services;
- A comprehensive review of Health First Colorado to include:
- A review of all optional services to determine if any may be eliminated to save program costs
- An aggressive utilization of existing data systems to ensure disenrollment of ineligible recipients and maintain system integrity
- Identification of redundancies, inefficiencies, waste, and fraud.
- An application for a combined federal waiver under section 1115 of the Social Security Act, and section 1332 of the Affordable Care Act to initiate an overhaul of the state’s Medicaid system to include:
- Integration of Medicaid insurance into the wider health insurance marketplace;
- Provision of an option for nonelderly, non-disabled recipients to enroll in HSA’s or higher-deductible plans;
- The creation of a more consumer-driven model.
- Just 32 percent of likely voters believe that the government should require every American to buy or obtain health insurance, compared to 56 percent who oppose the requirement. The 32 percent figure is the lowest level of support since Rasmussen began tracking the issue in 2012. (Rasmussen)
- Gallup’s numbers are most favorable to Obamacare support, but even there, only 47 percent of Americans generally approve of the Affordable Care Act, compared to 48 percent who generally disapprove. (Gallup)
- At the peak of the initial wave of health care cancelations in late 2013, only 38 percent of Americans generally approved of Obamacare. (Gallup)
- Between 2014 and 2022, the Affordable Care Act will increase health spending by $7,450 to average health spending for a family of four. (Forbes)
- By the end of 2013, over 4.7 million Americans had received policy cancelation notices, including 326,590 in Colorado alone. (Associated Press)
- The 2015 collapse of Colorado HealthOP, itself a byproduct of Obamacare, will leave an additional 83,000 Coloradans without a health care plan by the end of 2016. (Associated Press)
- During the King v. Burwell Supreme Court case in the summer of 2015, 55 percent of Americans said that the court should not take action to block federal subsidies in states that didn’t set up their own exchanges, compared to just 38 percent who said the court should take such action. (Washington Post-ABC News)
- Below, in one straightforward graphic, perhaps best explains how the government takeover of American health care has adversely affected consumer cost. (Manhattan Institute/AEI)
- Had the single-payer healthcare initiative passed in Colorado in 2016, it would have cost $25 billion per year, roughly the size of the state budget, and would have been paid for with a staggering 10 percent payroll tax increase. (Washington Times)
Transcending Obamacare: A Patient-Centered Plan for Near-Universal Coverage and Permanent Fiscal Solvency