Simplicity: When people purchase insurance online, the exchange will not have to verify their income with the IRS, determine how many employers they work for with the Social Security Administration, check with the Labor Department to see if they have been offered affordable insurance from an employer, or check with their state Medicaid program to see if they quality. The reason: these things will no longer matter. To enroll, people can make use of EHealth and other private exchanges that have been in existence for over a decade.
Also, under the ACA almost every income number entered online will turn out to be wrong. Therefore almost every subsidy will be wrong. That means almost everyone will face a tax increase or a refund next April 15th. Under ideal reform, there will be no need for tax increases or refunds the following year.
Jobs: Unlike the Affordable Care Act, we:
• Will not encourage employers to avoid hiring new workers;
• Will not encourage employers to drop health coverage for their current employees or for their retirees;
• Will not penalize employees and their employers if they work full time rather than part time;
• Will not favor small business over large business or vice versa;
• Will not favor non-union firms over union firms or vice versa;
• Will not encourage outsourcing or labor saving technologies, or in other ways discourage eco¬nomic recovery.
Universal Coverage: Unlike the Affordable Care Act, which will leave most of the uninsured still uninsured and which will drain safety net institutions of their funds in the process, we will commit a certain amount of money on behalf of every American.
• Unclaimed tax credits (by people who elect to remain uninsured) will be sent to local safety net institutions to cover medical expenses the uninsured cannot pay on their own.
• Also, everyone — regardless of income — will be able to use her tax credit to buy into Medic¬aid.
Portability: Unlike the current system, we will encourage employers to buy for their employees insurance that is personal and portable, and that travels with them from job to job and in and out of the labor market.
Patient Power: People will have new opportunities to manage their own health care dollars, if they choose:
• With a Roth Health Savings Account people will be able to manage their own small dollar expenses, including most primary care.
• Special accounts will allow the chronically ill to manage their funds, similar to the highly popular Cash and Counseling program for the homebound disabled in many state Medicaid programs.
Real Insurance: Under the Affordable Care Act, health plans have an incentive to avoid the sick and to under-treat them if they happen to enroll — in part by omitting the best specialists and best hospitals from their networks. This is because the premium high-cost patients pay is well below the cost of their care. As an alternative:
• Insurance should give people genuine protection against the financial consequences of devel¬oping a pre-existing condition.
• If an individual's health deteriorates and he must subsequently switch health plans, the origi¬nal plan must pay the new plan a higher premium to reflect the higher expected cost.
• Patients with health problems, therefore, will be just as desirable to new plans as people who are healthy.
• A vibrant market will develop, in which entrepreneurs compete to find new and better ways of treating the chronically ill.
In this new market, no insurance pool will be able to dump its most costly enrollees on another pool, with impunity — as they are currently doing with alarming frequency. Similarly, no individual will be able to game the system by remaining uninsured and then buying insurance without penalty after he gets sick.
Efficiency: No longer will the government subsidize the last dollar of health insurance, no matter how wasteful. Instead, government will subsidize the first dollars, paying for the core insurance that we want everyone to have. Additional insurance and deposits to Roth HSAs will be made with after-tax dollars and these dollars will compete on a level playing field with all other consumer spending.
• Unlike the current system, no one will have an incentive to over-insure or under-insure.
• Since HSA dollars will be available for other consumption without taxes or penalties, consumers who eliminate wasteful health care spending will get to use every dollar they save for other purposes.
Transition: We cannot abolish ObamaCare and start all over. We must transition from where we are now to where we want to be; and that is a process that will take several years. In the meantime, we can make two promises that are easy to keep:
• If you and your employer like the plan you have, you can keep it.
• If you have an individual or family policy you like (even one purchased in an exchange), you can keep it.
John C. Goodman is President of the Goodman Institute and a Senior Fellow at The Independent Institute. He is the author of the widely acclaimed book, Priceless: Curing the Healthcare Crisis. The Wall Street Journal and National Journal, among other media, have called him the "Father of Health Savings Accounts.”