We Need Consumer Driven, Market Based Health Care

As the health care debate continues, it looks like the Democrats may get some version of the health care bill to the Presidents desk soon. Considering the impact of the legislation that has been crafted in each chamber of Congress, I make that statement with a heavy heart. Should either of the bills become law, it will be a turning point in our country and something that we as Conservatives must work to reverse.

Beyond just reversing whatever damage the Democrats inflict, it will be of utmost importance that the Republicans have a plan for health care reform that they can offer to the American people. Health care in the United States needs to be reformed. But the reform should be based on competition, not regulation. 5/6 of the American economy continues to advance every year. As advances are made, costs for goods and services drop as they become more commonplace. The only part of the American economy where this does not happen is in the health care sector. Costs for health care continue to rise year over year with seemingly no end in sight

In this post, I’m going to outline what I think a general health care reform plan should look like. Before we get to that, let’s quickly look at how we got here.

Health Care History
The year was 1941, then President Teddy Franklin D. Roosevelt implemented wage and price controls as part of the war effort. One of the unintended consequences of those controls was that employers needed to figure out a way to compensate workers with competitive pay without breaking the law. Health benefits were the answer.
Two years later the Internal Revenue Service legitimized the practice by ruling that employer provided health benefits would not be taxed as income. Those 2 events essentially led us to what we have today.

What is the problem and how do we fix it?

The problem isn’t too little government and regulation, it’s too much. Health care in the United States is already regulated far beyond anything that might called a free market. Here are a few of the issues:

  1. Third party payment has removed the consumer for the transaction. Cost is not a concern because the consumer isn’t paying.
  2. The state mandates on insurance companies drive up rates in each and every state
  3. Insurance companies are not permitted to sell across state lines leaving consumers and employers with little choice
  4. Physicians are practicing defensive medicine in efforts to avoid lawsuits
  5. Insurance plans cover too much – people are over insured
  6. The regulatory framework is outdated and requires reformation
  7. Consumers buying health insurance do not get the tax exemption enjoyed by employers
  8. Consumers are not incentivised to live a healthy lifestyle

ObamaCare does nothing to address any of these issues. In fact, in some cases, it just makes them worse.

A Consumer Driven, Market Based approach to Health Care reform

Reform Principals

  1. Increase Health Insurance Competition – not regulation
  2. Consumer power, not government power will lower the cost of health insurance
  3. Emphasize health and health living, not just health care

Reform Ideas

  1. Make health insurance more like other types of insurance.
    • Cover less – make insurance what it should be, for use in catastrophic illness and accidents
    • Consumers use Health Savings Accounts (HSA’s) to pay for routine health visits (physical, blood work, physical therapy, etc)
    • Remove HSA Caps
    • Dismantle third party payment system. Put people in charge of their own health insurance, like all other insurance

  2. Foster competition
    • Allow health insurance sales across state lines
    • Attempt to limit or remove mandates
  3. Make it easy to get coverage
    • Allow association health plans among businesses
  4. Create a market with Medicaid users by transferring them all to HSA’s
    • Put Medicaid ownership with the states
    • Federal govt funds HSA’s (i.e. food stamps, housing vouchers)
    • Provide monetary incentives for users who display frugality
  5. Increase Transparency of health care costs
    • Transparency will be a natural by product with elimination of 3rd party payment
    • HSA owners will shop for services
    • Service providers will be forced to compete
  6. Tort Reform
    • Cap awards and move emotional malpractice cases to specialized courts
  7. Consider modifications to the “Unauthorized practice of medicine law”
    • Allow Registered Nurses, Physician Assistants, Nurse Practitioners and Midwives to start and run clinics for basic medical care
  8. Promote better health
    • Provide individual incentives for people who maintain a healthy lifestyle and have yearly physicals that reflect that.

A common sense, market based approach is what’s needed to improve our health care system.

Regulations and additional government will only hinder our ability to get good health care, increase costs and steal our freedom and liberty.

I’m not a Congressman or affiliated with the RNC yet I can come up with a basic plan. Where are the people we have elected to do this type of work with their plan?

crossposted to The Ritz Report