Guest column
Obamacare replacement: Bring your lunch
Rand T. Lennox
Some fundamental issues surrounding the American health care system must be understood and reformed before an acceptable replacement for Obamacare can be implemented.
First and foremost, the problem is not in the health care system, it is in the health care financing system.
Second, whereas the health care providing system is generally compassionate and honest, the health care financing system is fundamentally unfair and dishonest, and it was made so by government interference.
Third, health care insurance for the most part is not insurance. It is pre-paid medical care.
Finally, the people who directly consume health care services are typically not the people who directly pay for it.
Insurance is a mechanism whereby people exposed to a given event pool their funds to compensate those who actually experience the event. If one has no exposure to a given event, it is not fair to ask that person to join that pool. Obamacare does just that.
Insurance companies categorize risk pools and place people in them. Thus, bad drivers pay more for insurance than do good drivers. Most folks accept that as fair. Likewise, drivers owning two cars pay twice as much as those owning one. Most folks accept that as fair.
But why, then, is it fair that one patient must pay up to 20 times the price for a service as does another? Is it fair for people with two children to pay the same for health insurance as do those with one? Why is it fair for people unable to create or bear children to pay for maternity care? Why is it fair for a parent whose children became self-supporting at the age of 21 have to pay for those parents whose healthy children remain dependent at 26? Is it fair that children who become independent at age 21 choose to ride their parents’ insurance instead of insuring themselves? Politicians lowered the age of “adult” to 18 to garner votes, Obamacare raised it to 26 for the same reason. America now has “majority minorities” and “adult children.” George Orwell be praised, to the extent that risk pools include people not at risk, and people who can pay do not pay, health insurance will remain unfair.
Obamacare made the risk pool spectrum worse, not better, thus, its failure.
Further defeating the concept of insurance is covering routine health care and pre-existing conditions. If auto insurance does not cover oil changes, why should health insurance cover annual flu shots?
Paying for routine preventative medical care and treating pre-existing conditions are not matters of insurance (namely risk pooling). They are simply pre-paid medical care and from an economic perspective are no different than paying for someone’s lunch every day.
Unrealistic risk pools, broadening the base of non-payers, and covering pre-existing conditions without extra premiums translates to continued massive government spending. And there is no way Trump or any other politician can avoid it. Readers waiting for Trump to retain those three options while expecting a decrease in insurance premiums better bring their lunch. Readers waiting for those three and taxes to go down without increasing deficits better bring their lunch and dinner – breakfast too.
Several things are requisite for controlling the health care issue:
First, get employers out of the loop. Employer-paid insurance was a response to World War II wage/price controls; both ended 70 years ago. Have employers add their current cost of employees’ health care to employees’ salaries and let employees buy and manage their own insurance.
Second, make all health care expenses income and payroll tax exempt, as they are to employers. Together, these two items are revenue neutral.
Third, require that providers charge the same price to all patients. If they favor discounts for prompt payment, identify the discount as such and make it available to all.
Fourth, government must reduce providers’ costs by eliminating regulations and promoting tort reform instead of by squeezing providers’ incomes.
Then, create a specific tax for subsidizing the poor’s care – call it what it is. Clearly account for revenues and expenses instead of burying them in bureaucratic B.S. and vote-buying. Taxpayers should know the true cost of “free” care.
Americans’ health care is increasingly controlled by the government instead of the people themselves. Those wanting to live in a nanny state should move to one. Others should demand reduced government intervention, accept responsibility for their own health care, and vote their consciences on how much they are willing to be taxed to support others.
First and foremost, the problem is not in the health care system, it is in the health care financing system.
Second, whereas the health care providing system is generally compassionate and honest, the health care financing system is fundamentally unfair and dishonest, and it was made so by government interference.
Third, health care insurance for the most part is not insurance. It is pre-paid medical care.
Finally, the people who directly consume health care services are typically not the people who directly pay for it.
Insurance is a mechanism whereby people exposed to a given event pool their funds to compensate those who actually experience the event. If one has no exposure to a given event, it is not fair to ask that person to join that pool. Obamacare does just that.
Insurance companies categorize risk pools and place people in them. Thus, bad drivers pay more for insurance than do good drivers. Most folks accept that as fair. Likewise, drivers owning two cars pay twice as much as those owning one. Most folks accept that as fair.
But why, then, is it fair that one patient must pay up to 20 times the price for a service as does another? Is it fair for people with two children to pay the same for health insurance as do those with one? Why is it fair for people unable to create or bear children to pay for maternity care? Why is it fair for a parent whose children became self-supporting at the age of 21 have to pay for those parents whose healthy children remain dependent at 26? Is it fair that children who become independent at age 21 choose to ride their parents’ insurance instead of insuring themselves? Politicians lowered the age of “adult” to 18 to garner votes, Obamacare raised it to 26 for the same reason. America now has “majority minorities” and “adult children.” George Orwell be praised, to the extent that risk pools include people not at risk, and people who can pay do not pay, health insurance will remain unfair.
Obamacare made the risk pool spectrum worse, not better, thus, its failure.
Further defeating the concept of insurance is covering routine health care and pre-existing conditions. If auto insurance does not cover oil changes, why should health insurance cover annual flu shots?
Paying for routine preventative medical care and treating pre-existing conditions are not matters of insurance (namely risk pooling). They are simply pre-paid medical care and from an economic perspective are no different than paying for someone’s lunch every day.
Unrealistic risk pools, broadening the base of non-payers, and covering pre-existing conditions without extra premiums translates to continued massive government spending. And there is no way Trump or any other politician can avoid it. Readers waiting for Trump to retain those three options while expecting a decrease in insurance premiums better bring their lunch. Readers waiting for those three and taxes to go down without increasing deficits better bring their lunch and dinner – breakfast too.
Several things are requisite for controlling the health care issue:
First, get employers out of the loop. Employer-paid insurance was a response to World War II wage/price controls; both ended 70 years ago. Have employers add their current cost of employees’ health care to employees’ salaries and let employees buy and manage their own insurance.
Second, make all health care expenses income and payroll tax exempt, as they are to employers. Together, these two items are revenue neutral.
Third, require that providers charge the same price to all patients. If they favor discounts for prompt payment, identify the discount as such and make it available to all.
Fourth, government must reduce providers’ costs by eliminating regulations and promoting tort reform instead of by squeezing providers’ incomes.
Then, create a specific tax for subsidizing the poor’s care – call it what it is. Clearly account for revenues and expenses instead of burying them in bureaucratic B.S. and vote-buying. Taxpayers should know the true cost of “free” care.
Americans’ health care is increasingly controlled by the government instead of the people themselves. Those wanting to live in a nanny state should move to one. Others should demand reduced government intervention, accept responsibility for their own health care, and vote their consciences on how much they are willing to be taxed to support others.