The Car Insurance Alternative to ObamaCare

Ross Mackenzie
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Posted: May 23, 2009 12:00 AM

Our fabulous president said the other day, "I will not rest until the dream of health-care reform is achieved in the United States of America." What do you think about that?

As we all know, he's a dreamer, and on this one he's dreaming bigtime - or smoking something. His is a protracted exercise in wishful thinking.

You don't believe in reform? You don't believe our health-care system needs reforming?

Reform means change, presumably for the better. But not all change is prudent or good. Going to hell is a form of change too, yet hell is not somewhere many want to be.

Does the quality of care the nation's health system provides need improving? Not much. Americans receive the highest quality health care in the world - bar none. What does need major improving is the nearly dysfunctional system that finances this outstanding care.

So you agree with Obama's plan to reform that financing system - right?

Wrong. In essence, he wants it to be federally funded. That's why he and his congressional footmen are talking about such nifty things as raising income taxes, taxing employee health-care benefits, and taxing soda pop - all partly to finance his dream of a taxpayer-financed system. But whatever tax plan they concoct won't be enough. With government, it never is.

Never?

Never. Look at Medicare, which began running out of money last year (its funds now are estimated to deplete in 2017). Look at Social Security, which will incur a negative cash flow in 2016; the latest estimate has Social Security going toes-up in 2037. Look at the public schools, which annually require more and more in state and local tax funds to turn out products with foundational educations too often inferior or mediocre.

Then of course there's always the Postal Service. Which do you prefer: FedEx and UPS, voicemail, e-mail - or the U.S. Mule?

I'm not sure where all this is leading....

It's leading to the point that the president seeks three things essentially incompatible with one another: 1) universal health care, 2) improved health care, and 3) lowered-cost health care - or with the cost of health care increasing at a reduced rate. Briefly: He wants improved health care for everyone at minimal cost.

Only two ways exist to accomplish all that - through compulsion or through private enterprise. Obama nods to the latter but says he will resort to the former if the latter doesn't work.

Can the private sector get the job done?

Yes indeed.

The Europeans and Canadians went to government-run systems that are, today, certifiable messes. Medicine in Britain and Sweden, for example, is wholly impersonal. Waits for elective surgery are interminable, waits for cancer treatment similarly prolonged. The quality of care varies between bad and incompetent. Horror stories abound. In Canada, with a system widely admired by statists everywhere, many flee for treatment to...the U.S. Why any American would want to emulate these systems - as Obama does - defies comprehension.

You deplore state-financed health care abroad. How could the private sector address the health-care problem here?

ObamaCare will arrive here in some form - no question. The fix is in. Let's assume Obama and Congress were simply to mandate universal coverage. We have a real-world example of how the private-sector can handle mandated coverage. It's called automobile insurance - and it works exceedingly well.

Most states require motorists to have insurance. State regulators license insurance companies to sell policies, and the companies compete for customers - who shop for the coverages they want at the lowest premiums.

So?

So the federal government could require health insurance for every taxpaying household. The states could license private companies to sell health policies within their borders. At tax time, each taxpayer would attach proofs of state-licensed coverage to his federal tax return, and taxpayers would receive tax credits for the premiums. Call it, in the contemporary cliche, a public-private partnership.

What about the nearly 50 million Americans without health insurance now?

Every taxpayer would be required to meet the federal mandate and to buy at least catastrophic health coverage. For those who did not because of poverty, there would be a pool to finance minimal coverage - something similar to the uninsured motorist pools in many states. These pools could be financed - subsidized - in a variety of ways.

Those above stipulated income levels still failing to cover themselves and their families would be fined at sums significantly greater than the premiums for minimal coverage. Thereby they would be forced to comply.

It sounds like a lot of hoo-ha. Why not a straightforward system modeled after the European ones and financed by the taxpayers?

The federal role would be limited to policing compliance with the universal mandate - essentially through the friendly enforcers at the IRS. There would be but the merest added tax burden - perhaps to finance the pool for the uninsured poor. There would be no vast new bureaucracy. Private insurance companies would compete to offer the best coverage for the lowest rates. And the quality of medical care would not be driven down, as it is now, by those wielding federal and third-party hammers.

It's a plan not unlike the Federal Employee Health Benefits Plan currently enjoyed by the president and members of Congress. Let's see whether the plan these people force upon us, they force upon themselves as well.

The car-insurance model: Do you think that's "the dream of health-care reform" Obama has in mind?

Probably not - because it makes too much sense. But hey, maybe you should ask him.