America has a healthcare crisis. Democrats tried to fix the problem their way in 2010 when they passed the Affordable Care Act during the Obama Administration. Today we know that legislation as ObamaCare.
But ObamaCare has not lived up to its promises of reducing healthcare costs for the average American family. ObamaCare has only succeeded in putting more people on another government entitlement, greatly increasing the enrollment of Medicaid. The costs for everyone else keep going up forcing politicians to push for more government subsidies. But throwing good money after bad is no solution to a problem.
John C. Goodman is a healthcare economist. He offers some solutions to the problem along with co-author Pete Sessions (Congressman from Texas) in an article published by The Hill. They say in order to fix a problem you have to first acknowledge a problem exists.
According to Gallup, one in four Americans are fully aware American has a healthcare crisis. This crisis is most evident on the Affordable Care Act exchange. These authors tell us since 2014, premiums in Affordable Care Act plans have increased twice as fast as employer plan premiums and three times as fast as overall inflation. Last year, the average deductible in the most commonly selected plan was $4,572, more than twice as high as in an average employer plan ($1,787). The maximum out-of-pocket expense in the average exchange plan also was more than twice as high ($9,450) as in the average employer plan ($4,750).
For most people enrolled in an exchange plan, the insurance is free, or almost free. Four out of five enrollees (19 million) are paying $10 or less per month, and more than half of those are paying no premium at all. If you are healthy, the only care you need is preventive care, which is also free.
Unfortunately, exchange plans are not accepted by many of the best doctors and medical centers. Without changes, this year the out-of-pocket exposure in all Affordable Care Act exchange plans will be $10,600 for an individual and twice that for a family. So in other words, ObamaCare is a bargain for those who don’t really need insurance. But for patients who are chronically ill or require expensive medical care, it can be a financial disaster.
Sessions has proposed the Healthcare Fairness for All Act as a solution to the problem. It contains the following basic elements:
A real market for health insurance. Let insurers do what they are not allowed to do: offer a wide variety of products so people can purchase the insurance that best suits their needs with their own money. According to the Kaiser Family Foundation, people who purchase alternatives to Affordable Care Act insurance are paying less than half of the premiums charged in today’s exchange.
So, what if people choose a plan that doesn’t cover a problem like substance abuse because they mistakenly think no one in their household has that problem? Let a family that discovers a medical condition not covered by their chosen insurance plan, but covered under ObamaCare, enroll immediately in a benchmark exchange silver plan.
Tax credits. People who purchase insurance outside the exchanges should receive a refundable tax credit, which in most cases would cover more than half the cost of the insurance. As an alternative, people could have a tax credit equal to the subsidy they would have received if they had entered the ObamaCare exchange. Tax credits also could be used to pay premiums and make deposits to Roth Health Savings Accounts.
Special needs plans for the chronically ill. State governments should offer safety net health plans designed for residents with costly chronic conditions, including diabetes, heart disease, respiratory disease, etc. This should be similar to what happens in the Medicare Advantage program.
Roth Health Savings Accounts. These accounts should be flexible enough to meet the needs of the chronically ill. After a period of time, withdrawals for non-medical purposes should be without taxes or penalties — allowing patients to reap the economic rewards from being smart shoppers in the medical marketplace.
Employer plans. Employers should have the discretion to stay in the current system of tax subsidies or move to a tax credit system. Under the latter, employees could convert wasteful health care spending dollar-for-dollar into higher take-home pay.
These are all good solutions to the current healthcare crisis. The real problem right now is getting both political parties to agree we have a problem.
