After eight years of fighting Obamacare, Paul Ryan and Congressional Republicans released their plan to repeal Obamacare. As I noted here, the plan is an absolute train wreck which can be reasonably called Obamacare lite. Given its massive failures, it is no surprise that it was universally disparaged from both the left and the right. The only people who seem to like it are Paul Ryan, Donald Trump and the folks who do the Potomac Watch podcast at the Wall Street Journal. Between its universal hatred and unpopularity, it should not be a surprise that it will likely fail its initial vote in front of the full House tomorrow and even if it passed the House three Republican Senators already announced they would not support it– one more than the amount needed to kill the bill. Given all this, I wanted to offer an outline for what I think the good replacement would look like.
1. Getting rid of the individual mandate and the ban on insurance companies discriminating against preexisting conditions.
As I pointed out in my previous article (linked above) these two policies are interconnected and have to be repealed at the same time. Getting rid of only the mandate will only raise insurance premiums by causing an influx of sick people to join insurance pools without healthy people to offset them. While this would sadly force sick people to pay more or not get insurance at all the cold reality of the situation is that when insurance companies can not discriminate against them they do not receive insurance– they receive a subsidy paid for the healthy population.
2. Allow drugs to be imported from Canada.
This is simple supply and demand. Increase quantity supplied, shift the supply curve right and put downward pressure on prices.
3. Allow insurance to be sold across state lines
Like number 2, this is nothing more than a basic measure to drive down costs from economics 101.
4. Get rid of the business tax credit for providing insurance and replaces it with a business tax credit for HSAs
This is one of the biggest reasons health care costs are spiraling out of control. What this policy effectively does is incentivize businesses to give out blank credit cards for their employees to go shopping with. Modern day health insurance (insurance really should be in scare quotes) is not actually insurance. It does not protect you against something that might happen like car insurance protects you from possible future wrecks and fire insurance protects you from possible future fires. Imagine if car insurance paid for yearly maintenance inspections– that is what health insurance does (even though yearly medical checkups do not improve health care results). In effect, health insurance lowers and disguises the costs of health care for the consumer so they can not take in information conveyed by prices and make rational decisions. This causes them to use more health care (a scarce commodity) and drive up the price. This is the same phenomenon you would see if you gave someone your credit card and told them to go shopping. By removing the tax credit you should see less insurance in its current form and allow for more market forces to push prices down like they do in every other market.
Health Savings Accounts (HSAs), on the other hand, would put the consumer back in as the price payer. This would have people see prices and spend their money allowing them to make the choices they think are best for themselves. Let people actually evaluate if yearly check-ups are actually worth it for them.
5. Change the FDA’s approval process from proving safety to disapproving harm
Currently, the FDA uses the precautionary principle. Instead of having harm disproved they require safety to be proved, unlike our other major counterparts in Europe and Canada. To show how deadly this principle is, let me quote an example from the American Enterprise Institute, “Misoprostol was developed in the early 1980s and first approved in some nations in 1985. The FDA, however, did not approve Misoprostol until 1988. Even though the drug was already available in several dozen foreign countries, the FDA subjected Misoprostol to a nine-and-one-half-month review. At the time, between 10,000 and 20,000 people died of gastric ulcers per year. Had Misoprostol been approved more rapidly, it could have saved as many as 8,000 to 15,000 lives”.
6. Allow patients to try experimental and unproven treatments outside trials
If someone wants to try possible cancer curing drug that has not prove them then, as long as they are informed, let them. If I am on my death bed then why not try a possible life-saving drug even if it may not work?
7. End federal standards for insurance
The reason for this provision goes all the way back to banning insurance companies from discriminating on the basis of pre-existing conditions. As mentioned earlier, the ban requires the mandate but to keep people from buying cheap insurance with little coverage and cheating the mandate Obamacare require a certain level of coverage to make sure people have to pay in to offset the sick people brought into insurance pools by the man on discrimination. Since number two recommends getting rid of both the ban and mandate let us assume it is gone. All this policy does is let people chose what insurance they want- if any. This way if people want something comprehensive they can buy that or if they only want insurance for emergencies then they can have that.
8. Consider insurance companies that drop coverage after someone gets sick to avoid paying as fraud
Progressives often say that insurance companies will cheat consumers out of healthcare they paid for and when they do this we, as free market conservatives, should oppose thing. This is fraud. When you pay for a service you should receive what you paid for. Now, if an insurance company does not want to do business with you anymore after your treatment that is one thing but if you paid for insurance which covers cancer treatment then you should get the treatment you paid for. Contrary to what leftists might think, this is actually a free market idea.