The United States healthcare system is arguably the best in the world with regard to quality, innovation, technology, new drugs, and preventative care. However, it does not come without its disadvantages; healthcare insurance is unaffordable for some. Gallup.com recently reported that high costs and unemployment are the two primary reasons why some lack coverage. But, will ObamaCare fix these problems?
In a nutshell, ObamaCare simply increases Medicaid enrollment and/or assists the poor with their health insurance costs. In other words, the government will dish out truckloads of money to subsidize the cost of healthcare for millions of Americans. And the cornerstone idea to prevent this from bankrupting our nation is to force everyone, especially the young and healthy, to buy healthcare insurance. However, this will not work due to a lack of incentives. Specifically, ObamaCare will charge an extra “tax” of $95 or 1% of income, whichever is greater, to those who do not purchase insurance. This tax goes up in subsequent years, but remains far less than a healthcare policy. Therefore, many young folks will continue to forego coverage and the system will lose billions. The Congressional Budget Office’s latest estimate is that ObamaCare will cost us $1.8 trillion over the next decade, double what Nancy Pelosi originally claimed.
Let me make an important point here: as a rule, government cost estimates are notoriously underestimated. For example, the Richardson Administration originally sold our Rail Runner train system to the public at a cost of $122 million. Later estimates were revised to $400 million; but the actual costs have turned out to be $843 million with a net operating loss of millions per year according to the Rio Grande Foundation. Likewise, ObamaCare will end up costing us even more than $1.8 trillion.
The real problem, however, is that ObamaCare does not actually fix the rising cost of insurance, but simply masks it with huge government outlays. Nor will it help the poor outside of a handout. Plus, increasing the number of patients per doctor will result in lower quality, longer waits and rationed care. So let’s take a look at some other solutions.
Current laws restrict small businesses by limiting risk pools within the confines of a single state. Additionally, many states are burdened with monopolies, only having one or two significant healthcare insurers. This lack of competition within and across state lines leads to higher costs and fewer choices. It also leads to increased regulations since states don’t have to compete with their neighbor’s healthcare regulatory policy. Thus, many states require insurers to cover extensive lists of “essential benefits” such as maternity and mental health whether the consumer needs it or not. ObamaCare is no different. Interestingly, Canada Free Press reported democrats are pushing for abortion and gender reassignment to be added to ObamaCare’s list of essential benefits.
State-wide monopolies and a one-size-fits-all approach to healthcare serve only to drive up costs. By removing state-to-state barriers and unnecessary regulations, we could create a nation-wide system similar to car insurance. Today you can buy a policy for your vehicle that ranges from catastrophic-only coverage, to coverage of every conceivable contingency known to man. Likewise, healthcare insurance customers could create a policy tailored to their specific needs and budget. This would not only reduce costs; it would also be an incentive for young folks who think they are indestructible to get the bare-bones catastrophic insurance they need. Unfortunately, in an effort to dictate what coverage you need, ObamaCare denies catastrophic insurance plans, according to BenefitsCafe.com.
Another way to reduce health insurance costs is to reduce overall medical costs through tort reform. Doctors pay incredibly high premiums for malpractice insurance because we live in a sue-happy country with more lawyers per capita than any other in the world; approximately 1 for every 300 citizens. Of course, these increased premiums get passed on to patients, thus driving up costs. Studies published last year by law professors from Emory University and the University of Texas concluded that tort reform results in “steep” reductions in medical malpractice premiums. By reducing these premiums we can reduce overall healthcare costs which could help reduce insurance costs.
These changes alone will make health insurance more affordable for all. But we could bridge the gap even further by increasing the wealth of those least able to afford today’s healthcare costs. Reducing tax rates and unnecessary regulations provide job-creators additional capital which could be used for business expansion. This, in turn, would increase opportunities and wealth to poorer families. Ironically, a great place to start would be to repeal ObamaCare. It’s already putting less money in the pockets of the poor, making it even more difficult for them to afford insurance. AFL-CIO President Richard Trumka says ObamaCare is causing businesses to reduce employee hours to part-time status. And Reuters reported that 75% of jobs created last year were part-time.
Let’s repeal ObamaCare; it fails to fix our healthcare problems and could bankrupt us. Furthermore, if the market-based ideas I’ve outlined above fail, the government will always be there to spend trillions. Government solutions should always be our last resort.