Thursday, October 17, 2013

How to Replace Obamacare and Why

In my blog "ObamaCare Doubles-Down On a Broken Medical System" I describe how costs are rising in our healthcare system because everyone---hospitals, doctors and patients----are using "other people's money." No one has any incentive to control expenditures. Plus we have an aging population adding demand to the system.  Also open-ended government spending in Medicare and Medicaid has been a big driver of medical cost inflation.

I've also written in my blog My Damage From ObamaCare that my personal health insurance cost will more than double this year alone (for an ACA plan) and will have risen 5 fold since Obama's inauguration.  And I'm "older" and supposedly shielded from some of the biggest cost increases!  Some families will see a tripling in costs.  ACA will cause a rise of family spending of $7,450 on medical insurance NOT a DECREASE of $2,500 as the President promised.

ObamaCare has already increased costs and will further increase costs due to:
  1. increased benefits--even benefits that you don't want.  You will be forcibly upgraded by some bureaucrat's notion of insurance coverage regardless of what you want.
  2. the mandate to cover pre-existing conditions well before the insurance coverage is universal  means that older and sicker people sign up first while young people "run for the hills"
  3. fixing the benefit to elderly at no more than 3 times that of young beneficiaries will raise prices for young persons to "subsidize" older people, 
  4. the added cost of bureaucratic government compliance and red tape from the government; reporting requirements, digitizing records, etc .
  5. the government is increasing demand in a the medical system with no regard to expanding "supply" in the medical services.  
  6. doctors are fleeing the profession, fleeing the strong arms of the government (decreasing supply)
  7. no effort whatsoever in the law to control costs such as tort reform or insurance reform
  8. the program will invite more and more fraud
ObamaCare will increase the size (and cost) of government itself in a dramatic way.  And of course Obama will want to raise taxes more to cover all that.

Then there's the ObamaCare panel, probably correctly labeled the "death panel" that will make general pronouncements about what the "government" will cover regardless of your particular case.  I've written that even Dems Agree ObamaCare Panel Will Not Work:
This 'board' is an unworkable "medical rationing" committee which will make pronouncements about medical spending for large categories of persons (with no knowledge of each individual situation) to try to "save" costs.  An unelected, unaccountable panel of 15 persons can't do squat except cause millions of problems!  It's totally unworkable!  It's like a Soviet-style "politburo" trying to preside over the health care of 100s of  millions of persons.

Get Ready For Hell

Expect further medical insurance price rises next year after huge rises this year.  Because of much higher ObamaCare prices, fewer young people will sign up and instead opt for the small penalty.  Only sick and older people will sign up for the program (if they ever can fix the computer programs at which is a big flop).  Then insurers will raise premiums again to cover costs next year---this time in an election year.

Add this to the fact that ObamaCare is already hurting businesses despite denials from Obama (except for the 1000s of businesses politically connected who were granted waivers--many in Nancy Pelosi's district).  If you're a young college grad, you're already feeling the bad job market.  The blame is substantially on Obama's policies including ObamaCare.

Then next year, as costs continue rise to the point where no one can afford it,  Obama will make an impassioned plea to expand government spending and expand coverage to "take care" of people who are suffering so much.  But it will have been the government who has caused the problems.  So, expect deficits to rise again after some progress this year.  Worse, the more government spends, the more medical prices inflate.

This is a recurring theme in modern history: the government causes a problem by it’s intervention in a market, then further intervenes to “fix” the very problem(s) it caused.  The result is usually worse plus you're left with a permanently expanded government.  Then come the tax (or deficit) increases to pay for all of this.

At the end of all of this, you'll be left in hell with higher taxes, still large government budget deficits, rapidly rising medical costs, a government "managed" healthcare system, the death panel, waiting lines, bigger and more intrusive government and few job opportunities.

Then, if America doesn't shift course, economic stagnation and debt leads to higher unemployment, debt crises, economic depression, social upheaval, possibly war and the end of the American dream.  

The end result of unbridled liberalism: collapse.  

Romney Had The Right Ideas But No One Listened

Liberals keep saying that the Republicans have no ideas for replacing ObamaCare, but it's not true at all.  So many liberals say this so often that it becomes common "knowledge" but it's incorrect, ie., a lie.   Mitt Romney, didn't do the best job in communicating his policies, but he had the right ideas.  In his campaign for President described his vision for market-oriented health reform taken from a Forbes article from Avik Roy:
“Everyone can agree that health care is broken,” he said in a speech in Metairie, Louisiana. “So the last thing we should do is allow Obamacare to freeze the current system in place. Instead, we need to encourage innovation at every level. States should have the flexibility to pursue new policy approaches. Insurers and providers should have the opportunity to compete in a genuine market. Most importantly, patients should have the information and control they need to make choices about what they actually want.”
Romney also suggested to give Medicaid back to the states in the form of block grants [a fixed amount, not open-ended]. This would free states from the mountain of red tape in Washington, and allow them to address their uninsured population in the way that makes sense for them. I’ve highlighted in the past how federal bureaucrats have thwarted modest and successful reforms in Illinois and Indiana. Contrast their experience to that of Rhode Island, where Medicaid reformers made significant headway due to a block grant-like waiver from the feds..

Solving the Pre-Existing Condition Problem and Attaining Universal Coverage

The problem of pre-existing conditions is mostly due to the fact that employers provide health insurance to a vast majority of insured (80%).  When you leave a job and have a pre-existing condition, then you have a problem re-entering the insurance market if you're sick.  But the 'pre-existing condition' problem is a relatively small problem.  You can buy a COBRA policy but these are expensive and are limited in duration.  A better solution: move people away from company-provided insurance altogether.  Transition people to their own policy and make policies portable across state lines through state insurance reform.

Since company's get a tax deduction for providing health insurance to employees, why not give a tax break instead to individuals to buy insurance for themselves and their families?   Give individuals a tax deduction or an outright tax credit (or even an outright subsidy or voucher if low income) to buy their own policies.  In this way, people have their own policies regardless of their employer or employment situation.   Poor people getting a voucher for coverage should partially replace Medicaid.

Notice with the tax deduction,  outright credit, or voucher,  you obtain nearly universal coverage.   If you're not employed, or very low income, you can get Medicaid (or vouchers).  ObamaCare, with much higher individual and governmental costs, will not attain universal coverage.  Such alternative policies would cost much less than ObamaCare since we're not imposing a huge new bureaucracy and disrupting the industry.

This is hardly a complete discussion of the various reforms of insurance and state laws that are required.  The best and most lengthy discussion I have seen is found at How to Replace ObamaCare by James Capretta and Robert Moffitt.  Here's a few highlights with some quotes from that very article:
  1. Pass tax law changes to provide tax credits (or tax subsidies for low income persons) so that people can buy their own policies outside of their employer benefits (so it's 'portable').  Enact policies that encourage continuous coverage with at least high-deductible (catastrophic) health coverage.  Move people away from employer-provided policies to individual policies.
  2. The federal government could close gaps in protection that emerge when people move from employer-sponsored plans to the individual market regulated by the states. Transition sick people without coverage and pre-existing conditions to high risk pools probably with government support. The Federal Obamacare website might be the start of a high risk pool as we speak.
  3. Transition to Medicare and Medicaid block grants to states, fix the amounts spent, and let States innovate and manage the monies suitable for each circumstance.
  4. reform medicaid system to a substantial "premium support" or voucher program so that these people shop for their own policies. Again government expenditures should be fixed or limited rather than open-ended.
  5. states would need to amend their regulations of the individual and small-business insurance markets to require insurers to sell coverage to customers who have remained continuously covered. These new regulations would also have to require that such coverage be made available at standard rates — that is, at rates that apply without regard to differences in health status (age and geographic adjustments would be permitted).
We should do everything possible to avoid injecting the heavy-handed and strong-armed government into the insurance market and medical business as ObamaCare does.  We didn't do that, so get ready for hell instead.

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