I’ve written a lot lately about the failures of Obamacare, as has everyone else – and justifiably so. Although the law’s troubles are legion and seem to grow hourly, there are only so many ways to make jokes about the fact that when Cousin Oliver joined the cast of the Brady Bunch there were more kids on that show than people who successfully enrolled in the first day.
So rather than be one of a million voices pointing out the problems, this week I thought I’d offer some solutions.
By way of background, I spent 2 1/2 years at the Heritage Foundation working on health policy, so I know a thing or two about it. I’ve tried to forget as much as possible – it’s every bit as boring as it sounds. But some things you just can’t shake.
That said, this isn’t a policy paper, it’s more of an idea board. While progressives whine and lie about GOP “sabotage” of Obamacare and otherwise attempt to deflect from their disastrous conceptual failure, I’m going to throw some things at that idea board and hope a few stick.
Reset the Market
Health insurance has been tied to employment since the administration of FDR. With wages frozen, companies had to offer other things to attract workers. The tax code was changed to allow them to offer health coverage without it being taxed as income. Those who purchase insurance in the individual market have to spend money they’ve already paid tax on to buy it. So you end up with two groups of people getting the same thing – one being taxed on it, the other not.
This was fine when people held one job in the local factory for 30 years. But with so many now self-employed or working for companies too small to offer coverage, this has to be reset. The government should “level the playing field” and allow individuals to spend their own money, pre-tax, on health insurance.
Roughly a quarter of the uninsured in this country have incomes above $50,000. They’re uninsured by choice. It could be they feel bulletproof, but it also could be they simply don’t want to spend the money on it. This would encourage some to buy insurance. But if they did not, it would be on them, not society. (More on this later.)
Health Savings Accounts
How much does an X-ray cost? A hip replacement? A blood test? Odds are you don’t know because, if you have insurance, you’ve probably never paid for one.
A health savings account, coupled with a high-deductible catastrophic insurance plan, would make consumers become not only price sensitive, but price aware for the first time. It would allow people to save tax-free exclusively for their health expenses, or even allow their employer to contribute. Then, they could roll over that money every year and pass it on to their families when they die. If people depend on their own health care savings for medical expenses, they will become price-sensitive.
And that price sensitivity would introduce real competition into health care. The cost of Lasik eye surgery has decreased dramatically precisely because it isn’t covered by most insurance and, therefore, doctors must compete for patients. Imagine that on a nationwide scale.
Most people don’t understand it and it won’t win any votes (trial lawyers, the biggest beneficiaries of our current system, are massive donors to Democrats) but it is crucial to controlling costs.
Doctors live in fear of being sued. We’ve all seen the ads on TV featuring a voiceover asking, “Have you or anyone you love been hurt by a doctor? Call us. It won’t cost you a dime unless we collect.” These shysters and the mentality they breed cause doctors to practice defensive medicine, which drives up costs.
This is a bigger societal problem than can be addressed with one law. But it is a good place to start.
Society has conflated “adverse outcomes” with malice. Where malice or negligence exist, sue away. But sometimes, treatments don’t work. No medical professional can treat against that. But society now equates something not working how we’d hope with “someone is to blame,” which becomes “someone must pay.”
A new market should be created – adverse event insurance. Since something not going how people had hoped has seeped into our collective psyche as malpractice, which it is not, companies should offer insurance against adverse events. It would function like flight insurance used to – purchase it before a procedure at a low price, and it pays out if something non-malice-or-negligence-related happens. Since most procedures are successful, the cost and pay-out rate would be exceedingly low (on the order of $10 for $25,000 coverage of a hernia surgery, more complicated procedures more).
True malpractice should still face court action and severe penalties, but a “losers pay” system should be enacted for those who file genuinely frivolous lawsuits. And the loser who should pay should be the lawyers – they know when they are filing cases they shouldn’t, and they’ll stop if it threatens their wallets.
Sadly, this is probably the most controversial point, even given the money in play on tort reform. Personal responsibility is passé and discouraged by our current culture, from the president on down. But it has to happen.
No mandates, only consequences
I’m not saying we let people die on the streets. I’m saying we treat people who choose to risk it, not buy insurance and lose. If that means bankruptcy, it means bankruptcy.
Adults have to be held responsible for their choices, or lack thereof. Losing what they have accumulated is a small price to pay for surviving. It also will encourage, but not mandate, people to buy some kind of insurance.
Neither political party, writ large, is interested in real personal responsibility, but it’s desperately needed in the health insurance market. Without it you get Obamacare.
These are just a few ideas, ideas progressives will no doubt find crazy, which makes me like them all the more. But these could move us in a direction we haven’t gone for a long time – toward a freer market in health care.