Sunday, February 19, 2017

Repeal...but Why Replace?

Screeching to a crowd in Warren, MI, socialist and regular guest on Russian Television, Bernie Sanders, declared "Know we are saying to our Republican colleagues: We will not allow you to throw up to 30 million Americans off of health insurance". First, where does the 30 million people under coverage from the Affordable Care Act come from?  Not even the Obama administration used that number.  This is simply Bernie trying to incite political fear.

According to an article by the right-leaning Heritage Foundation, ACA covers approximately 16.5 million people or about half of Sander’s claim.  Some 84% or 13.8 million members of the ACA are on Medicaid and 2.7 million on private insurance.  Of the Medicaid enrollees, about 60% or 8.2 million would qualify for Medicaid without the ACA, this according to Jon Gruber, the MIT professor who was an architect of Obamacare.

So the net number of enrollees attributable to Obamacare is about 10.9 million . . . not 30 million or even 20 million.  Remember too, that when the ACA was enacted about 6 million people were thrown-off their health insurance plans, which President Obama dismissed as – a drop in the bucket – in the overall healthcare market.

So, where to go from here?  First to recognize that all the layers of government in healthcare are the problem.  Second, to start dissolving the layers toward directly connecting the man who gets the service, as the consumer, and the man who delivers the service, as the provider; i.e. the free market where the price mechanism can kick in to drive access, choices, quality, and affordability . . . as it always does.

Currently, health insurance companies are not providing free market insurance, but highly regulated and taxpayer subsidized cash management.  Whatever the government doesn’t directly controls, it indirectly controls.  The more control, the worse the system.

The Republicans have replacement plans that are better than the ACA, but all still have government subsidies.  The real solution is to dissolve the ACA in its entirety along with many other government health care programs and regulations. However, as this is not on the political horizon, here are six suggestions to replace the ACA with less government intrusion while keeping the policy to deny no person coverage and no reimbursement cap:

  1. Dismantle the individual mandate with its tax penalty, the requirement that companies have to provide health insurance for employees who work more than 30 hours a week, and any minimum requirement on health insurance coverage
  2. Let health insurance companies compete anywhere in the country to sell any type of policy at a risk adjusted price to increase the types of policies, prices and competition
  3. Let people annually put the greater of $10,000 or up to 10% of their pre-tax income in a Health Savings Account (HSA) and let the HSA build tax free, with no taxes when withdrawals are used for medical costs and insurance premiums
  4. Put a cap on pain and suffering tort liability to help control the large insurance premiums that doctors and hospitals pay
  5. Permit 100% individual tax deduction of health insurance premiums (just like companies)
  6. Remove the restriction on health insurance companies that requires them to spend 85% of premiums on medical reimbursements to enable health insurance companies to make investments, like life insurance companies, and build assets than can be used to mitigate premium increases

The above will be better than the ACA, but the Left will argue that tens of millions will be without health insurance.  But in their quest for noble compassion they ignore an ACA in collapse that risks hundreds of millions of people who could be without health insurance from a “death spiral” of uncontrolled costs.

Obamacare is another failed socialist experiment to coercively redistribute income and make the many pay for the few. It is better public policy to kill this beast, which has never had the majority of public support, than submit taxpayers to the civil slavery of the ACA that takes their hard earned money and delivers nothing to them in return.

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