For all those who ask, what then?

Several times over the past few weeks I’ve heard something like, “So, if Obamacare is struck down by the Supreme Court, what then? Health care still needs reforming. What should we do then?”

The irritating implication seems to be that opponents of Obamacare have never offered, or maybe even considered, any alternatives.

Or, perhaps the people who asked that question don’t understand or have considered the alternatives that have been offered — or, at least, the alternatives that I recommend.

Here are three easy ones:

1. Eliminate the favorable tax treatment given to employers to provide health insurance.

This gets rid of much of the pre-existing conditions problem that caused (and later attempted to be solved by government action) much of this problem. Imagine buying health insurance in a similar fashion to car insurance. You stay with the same company for a long time.

You may also see insurance return to being insurance, instead of a medical subscription plan. When a tree falls through your roof, your insurance company cuts you a check less your deductible and you get it fixed.

Maybe insurance companies will do the same. You have a major medical condition, you get it fixed and your insurance company cuts a check.

2. Reduce or eliminate state mandates.

I don’t prefer to do this with a federal mandate that overrides state insurance mandates. I think states should have the right to set their own mandates. But, voters in states with costly mandates (like NY and MA) should take a hard look at states with much less costly mandates (like MO or ID) and ask why insurance in those states cost so much less.

3. Move medical services more toward a free market.

The medical industry is heavily regulated. This regulation ranges from medical licensing, control of number of beds and medical machines in a market, ownership restrictions in some areas, heavy drug regulations, and so on.

These regulations reduce supply, increase costs and constrain innovation, that can lead to dramatic and organic improvements in effectiveness and costs over long time frames.

 


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2 thoughts on “For all those who ask, what then?

  1. I’d love to see something that combines doing away with employer tax subsidies and adding price transparency. I would think that the end result of this would be more personal responsibility for the health outcomes of yourself and your family and a decrease in cost (or at least a markedly slowed increase in costs) in the long term as people begin to understand the true costs of health care.

    Of course, this would destroy the economic rents some insurance and health care companies receive so they would fight tooth and nail, telling us how disasterous this would be for us.

    Also, this wouldn’t fit conveniently in an election-cycle so I doubt anyone would fall over themselves to champion such an idea.

    • Hey Lane — Good to hear from you. I think transparency would be a natural outcome of doing away with the employer health insurance advantage, as folks would naturally be more interested in the price and the market would organize to deliver that.

      And I agree with you. There are too many economic rents at stake. Lots of bootleggers and baptists that will stand in the way of effective reform.

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