By Dave Smith, Contributor for US Daily Review.
Amid their much-debated (sometimes quite nastily so) differences, the Republican candidates for the Presidency agree on one issue: each of the GOP contenders promises to repeal “Obamacare” if elected. One of the most hotly contested laws ever enacted, the final version of the Patient Protection and Affordable Care Act 906-page labyrinth of government bureaucracies, mandates, prohibitions, and taxes that does nothing to address the two core problems of health care in America: rising costs and access to coverage. It has returned to the front pages recently, as the Administration has announced (and then slightly walked back), requirements concerning “free” contraceptive coverage, even on religious and related organizations fundamentally opposed to providing such coverage based on moral objections.
But if Obamacare is the wrong answer to the health care conundrum, what is the right answer? Spiraling health care costs provide a drag on the economy, a burden on low and middle income households, and a competitive disadvantage to American-based employers. What’s the proper approach to true health care reform that does broaden access to affordable health care without infringing on the individual and religious liberty of citizens?
Fortunately, there is an answer, and it is based on the same concept that has lowered cost and improved service in such areas as computers, cell phones, and GPS systems: competition. A free, open, competitive marketplace doesn’t currently exist for health insurance — at the government’s insistence. Obamacare seeks to involve the government in solving a problem that the government itself created: the lack of a competitive marketplace for healthcare.
Four simple, easy reforms would allow a competitive market for health care to arise, lowering costs and increasing access for millions of Americans, while at the same time empowering individuals and families by removing the link between employment and insurance.
First, remove the federal government’s prohibition against buying insurance across state lines. The bigger the market, the more choices are available. Limitations to buying from in-state chartered health providers limits their competition, meaning they have less of a need to satisfy customer needs and desires, less incentive for cost reduction and innovation, and less reason to provide individuals and families with more personalized options. Perhaps online retailers like Amazon or brick-and-mortar stores like Wal Mart would choose to get involved in either providing insurance coverage or at least serve as virtual kiosks matching plans and consumers.
Second, give individuals the same tax benefits for purchasing health insurance that employers currently get for offering it. Employees could still have the option of getting health insurance through their employer, but would no longer have to worry about losing their health coverage if they were laid off, wanted to change jobs, or chose to start their own business. Coverage would be portable, and millions of new consumers would be unleashed into the marketplace, creating new competition. Rather than looking only at the options provided at work, individuals and families could shop around for coverage that more fits their own needs. Paired with interstate access to increase the size of the marketplace, portability would be force insurers to cater to a wider variety of interests.
Third, increase consumers’ ability to leverage by removing barriers to group plans. Groups as varied as the NAACP or the National Small Business Association could pool members together from all 50 states and leverage those groups to negotiate with the insurance companies, and new groups could spring up to meet demand for group leverage. For example, many architects are self-employed and lack insurance; think the American Institute of Architects would be interested in providing insurance options to its members? Many with diabetes are worried about getting coverage for their “pre-existing condition”; with a potential customer base of 25 million people, there’s a pretty good chance the American Diabetes Association would wield a power negotiating stick. In an open market, most insurance providers would probably be interested in competing for those customer pools.
Finally, increase access to high-deductible plans coupled with health savings accounts. HSAs encourage consumers to use health insurance more like they use other types of insurance, like home or auto. It is inefficient to purchase car insurance to cover, say, oil changes and wiper blades because of paper work and other concerns, and when there is a third-party making payments, there is less incentive to shop around for better prices or different options. With an HSA, the consumer has a distinct cost incentive to shop around for health care services but would still have the choice of staying with a familiar, trusted doctor; either way, the choice lies with the individual, not a bureaucrat working with the government or an insurance company. And, individuals and families are protected against a traumatic health problem bankrupting their financial future.
Removing barriers to competitive markets and empowering consumers would remove the need for mandates that violate the conscience and taxes that pluck from the paycheck, increase access and availability, provide a check on rising costs, and provide individuals and families with options that fit their need rather than those of special interests. Replacing Obamacare is easy: just unleash the free market.
Born in the same county as Davy Crockett in East Tennessee, Dave Smith has been living in Texas for over 10 years and involved in politics in for over 15 years. He has been blogging for nearly 10 years, has contributed to Town Hall Magazine and other publications, and has been on ABC and Fox discussing election issues. He is a graduate of Tennessee Tech University with a degree in chemical engineering.
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