Writing in the
Wall Street Journal, Ramesh Ponnuru (AEI, National Review) and
Yuval Levin (National Affairs, Ethics and Public Policy Center)
argue that the Republicans should propose a concrete alternative to
Obamacare. I think they are correct that if the GOP actually wants
to improve health-care policy – as opposed to simply enjoy immense
political gain in the near-term – it needs to do more than
slow-clap as the good ship ACA goes down.
Their basic idea is replacing Obamacare with
a flat and universal tax benefit for coverage. Today’s tax
exclusion for employer-provided health coverage should be capped so
that people would not get a bigger tax break by buying more
extensive and expensive insurance. The result would be to make
employees more cost-conscious; and competition for their favor
would make insurance cheaper….
Medicaid, the country’s health insurance program for the poor,
“could be converted into a means-based addition to that credit” and
people with pre-existing conditions would have access to “coverage
through subsidized, high-risk pools.”
None of this is particularly radical or out of step with most
people’s experience in every other aspect of our lives, where we
figure out what we want from many alternatives. At its core, it
simply suggests injecting more and clearer market mechanisms into
an area in which vagueness rules. Quick: Do you know how much your
last blood test cost you or your insurer? The answer is almost
certainly no. But you probably know how much your car’s last oil
change cost.
Ponnuru and Levin note that “conservative policy experts have
long proposed such approaches” but were rebuffed by House
Republicans in 2009, who chose instead to offer “an alternative to
ObamaCare that did nothing about today’s market-distorting tax
policy and thus did not do much to help the people whom that
policy—by inflating premiums—has locked out of the insurance
market.”
There’s a strong case to be made that their plan doesn’t go far
enough in addressing cost issues (Medicare!) and there’s a reason
to be queasy any time “tax benefits” float into conversation (our
tax code is already complicated enough). But their basic idea is
worth exploring and discussing not just on the nation’s op-ed pages
and blogs, but in Congress.
At the top of the
required-reading list for Congress and other policy analysts should
be Ronald Bailey’s 2009 Reason story, “In
Health Care, Nobody Knows Anything.” Bailey starts by
paraphrasing the screenwriter William Goldman’s famous maxim about
Hollywood and noting that premiums had doubled over the past 10
years. He then proceeds to lay out a clear and concise case for
increasing basic market competition by dismantling
the McCarran-Ferguson
Act of 1945 that allows state governments to regulate the
business of insurance without federal government interference. The
Act is, in part, responsible for the evolution toward state
insurance markets dominated by just a few large insurers. Consumers
cannot purchase insurance policies that are not licensed by their
state insurance commissions and which do not incorporate all the
mandates imposed by those commissions. Congress and the states
should open up competition between insurance companies by enabling
“regulatory federalism” that would allow individuals and employers
to purchase health insurance from other states.
At the same time he calls for changes that would allow more
competition among insurance providers (and a move toward actual
risk-based coverage, rather than pre-payment plans that obscure and
drive up prices), Bailey also argues for deregulation among health
care providers.
For example, many states have certificate of need programs that
forbid the construction of new health care facilities without prior
regulatory approval. Passed by Congress in 1974 as a cost-cutting
measure, the ostensible purpose of the programs is to keep health
care costs low by requiring advance approval by state agencies for
most hospital expansions and major equipment purchases. But
regulations don’t really work that way. “Market incumbents can too
easily use [certificate of need] procedures to forestall
competitors from entering an incumbent’s market,” according to a
2004 Federal Trade Commissionreport.
In fact, “programs can actually increase prices by fostering
anti-competitive barriers to entry.” State enforced monopolies
increase prices? Who knew?
Read the whole thing. And then read Reason’s
ongoing coverage of
Obamacare.
The disastrous rollout of Obamacare has given the country
another chance to address problems with the health care industry,
all of which stem from a massive lack of exactly the same basic
market mechanisms that have allowed so much progress in virtually
every other area of our daily lives, from coffee shops to the
online world to airline ticket prices.
Yes, health care is
a specific market that requires certain specific rules and
regulations. But that doesn’t mean it requires fewer market and
pricing signals (the muffling of which always helps powerful
interests in a given industry).
Now is the perfect time to propose real alternatives that even
if not perfect actually increase the ability of individuals to make
meaningful choices that will affect their lives. Here’s hoping that
congressional Republicans and Democrats rise above themselves to
actually do something that might help us all rather than simply
position their partys for 2014 or 2016.
from Hit & Run http://reason.com/blog/2013/11/14/hey-congress-how-about-proposing-actual
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