Today’s Washington Examiner:
Ryan wants to change the government policies that insulate the health care consumer from nearly all costs, thus distorting incentives for doctors and patients alike. Price signals, a staple of any functioning free market, have been muffled in health care, where third parties (insurers and the government) pay roughly 88 percent of health care costs, up from 52 percent in 1960. Because patients don’t pay the bills, most of them have no idea how much services cost, let alone what they are worth. This leaves doctors and hospitals in a competitive vacuum where price and value bear little relation to one another.
“Instead of top-down price controls imposed by 15 bureaucrats at IPAB,” Ryan said, “let’s try bottom-up competition driven by 300 million consumers.” Ryan calls for a uniform tax credit for everyone to purchase health insurance. This would immediately end several problems created by the prevailing employer-based insurance system, which offers fewer options, traps many Americans in jobs they would rather leave and causes many to over-insure themselves. For government health care programs, Ryan expanded on the plan he outlined in his House-passed budget, which promotes greater freedom and flexibility than Medicare or Medicaid currently offer.
What if our food where purchased for us by National Universal Grocery Care? How much would it cost then? A lot more. We’d being paying for our groceries through taxes but when we went to the store we would have no incentive to make wise purchases if the government gave us all unlimited food stamps to use at the checkout. Our taxes would be enormous and our food purchasing preferences would have no effect on the price of food, or our taxes. That’s what third-party payor has done to health care costs. It’s time to end it. Obamacare, if allowed to go into full effect in 2014, will make that situation worse than we can imagine.
As National Universal Grocery Care would lead to bare shelves at the super market, Obamacare will mean less health care for all of us because that will be the only way to control costs.
Ryan’s plan to give tax credits for the purchase of health insurance is a good idea, and combines features from two opposing ideological camps. A tax deduction would put individual health insurance on par with employer-provided group insurance. A tax credit goes further and constitutes a government subsidy for the purchase of health care while keeping a mostly free market in health insurance. Individuals will still have the freedom to pick and choose the right health care plan for themselves based on cost and coverage. Actually, even that constitutes a small amount of interference with the free market since every dollar you spend on health insurance reduces your taxes dollar for dollar, while every dollar (up to your tax liability) you don’t spend on health insurance will necessarily be a dollar you must pay in taxes. That distorts incentives and may result in people over-buying on their health insurance. The way to avoid that is to limit the amount of the credit so that it pays for a large part but not all of a typical insurance premium. A deduction for the part not covered by the credit might be appropriate.
I hope some politician somewhere understands that this sort of tax credit plan, by itself, is only a half measure. If they really want to bring insurance premiums down at least two more provisions need to be included in the law.
First, all state and federal coverage mandates must be repealed along with Obamacare. When government mandates the particular types of coverage that must be included in insurance contracts, consumers lose their freedom of contract and premiums are pushed to artificially high levels. These laws force consumers to pay for coverage they don’t need and may not want.
Second, all state law barriers to the purchase of health insurance should be abolished by federal law. Caveat: Don’t make the mistake of thinking you are buying insurance outside the state you live in just because your insurance company has it’s headquarters in another state and you send your premium payments to that address. Your insurance company is selling you a policy that meets the requirements of the state you live in, and cannot legally sell you a policy that is legal in another state, but not in your state. Being able to buy a policy legal under the laws of any other state is what is being talked about here. Currently, that is not possible.
Repealing Obamacare and replacing it with tax credits to buy health insurance will not be enough to give consumers all they need to bring down both insurance premiums and health care costs. Until state-line barriers to health insurance and all policy mandates are also repealed, a free market in health insurance and health care will not exist.
See also, Investors Business Daily, Despite Obamacare — Health Care Costs Soar. I’d say “because of” not “despite” Obamacare.
There are still some who can’t bring themselves to believe the truth about Obamacare. It was never intended to reduce costs. It was intended by Obama (if not all of the doofuses who supported it) to drive up costs, destroy private insurance markets, and make Americans willing to accept a single-payor government run health care system. I don’t get it; all anyone need do to believe that is read Obama’s book and hear the speeches he made before running for president where he revealed his intent to create a single-payor system. His words were clear: “We may not get there right away, it may take a few years, but we’ll get there.” “There” is a single-payor government run health system. It’s been in his heart from the beginning and Obamacare is carefully crafted (not by the doofuses but by more clever technocrats in the Democrat party) to be the vehicle to achieve that goal.