For those keeping score, once again, I was right and the so called experts were wrong. The Supreme Court upheld Obamacare, 5-4. The solid liberal block only had to peel off one of the Justices who actually read the constitution. So the bad news? Obamacare upheld. The good news? I was right once again!
Based on just a brief commentary I’ve heard so far on the decision, there is actually some other good news. The court upheld the individual mandate based on the taxing power of the constitution, not the commerce clause. So when it came to deciding if the commerce clause meant the government could do anything, they punted. So rather than ignoring the constitution, they merely ignored the text of the law. That’s a far better situation than if the court had decided to not recognize any limits to the commerce clause. This is no Kelo. This is a political decision that was only about this particular law. It didn’t set a legal precedent.
But this doesn’t really change the playing field, at least not yet. Even if the Court had repealed Obamacare in its entirety, we still would have been left with the situation of having to replace it with something. This only pushes back the date to when we can do that; until we have a Republican President. That makes a Romney win all the more important. Politically, this might even be beneficial to Romney. It would fire up a base who was otherwise rather “meh” on him.
So, assuming a Romney victory, what can we replace the shambling corpse of Obamacare with? It’s not enough to get rid of Obamacare, declare victory, and go home. The reason Obamacare had any traction in the first place was because there was a universal recognition that our healthcare system was broken. It cost too much and didn’t cover enough people. Even with Obamacare out of the way, the real issues that it was advertised to address remain.
Luckily there have been many alternatives proposed, and the pool of various reform plans is large enough to provide a good mix of alternatives to the slap dash political Frankenstein’s monster that was the Patient Protection and Affordable Care Act. The most obvious place to check with first is with the proposed healthcare plan of Mitt Romney. Some of the major proposals of Romney’s plan include:
End tax discrimination against the individual purchase of insurance
Block grants to Medicaid.
Cap non-economic damages in medical malpractice lawsuits
Empower individuals and small businesses to form purchasing pools
Allow consumers to purchase insurance across state lines
Unshackle HSAs by allowing funds to be used for insurance premiums
Promote alternatives to “fee for service”
Encourage “Consumer Reports”-type ratings of alternative insurance plans
Most of these ideas are common features of other alternative health care reform proposals. It shares similar features with the National Center for Policy Analysis proposal, the Heritage Foundation, the Competitive Enterprise Institute, the GOP, and the Options Act, a bill currently in committee in the House (as HR 4224). All of these proposals are similar enough in their general outlines that one bill could probably be crafted out of them rather quickly.
One of the more interesting plans came not out of a think tank or campaign headquarters, but from a businessman, John Mackey, the CEO of Whole Foods. His plan came out of his experience of trying to provide health care benefits to his employees. Like the other proposals, Mackey supported equalizing the tax laws so that individual and employee health insurance plans had the same tax treatment, competition across state lines, and tort reform. He also wanted to allow a check box on tax forms to allow a contribution to a fund to provide healthcare for people not otherwise covered, and expand the use of Health Savings Accounts, which are utilized extensively in the Whole Foods health care plan provided to their employees.
Naturally liberals were apoplectic that the CEO of the place where they purchased their overpriced arugula was proposing a counter proposal to the one Dear Leader was proposing. The publication of Mackey’s article in the Wall Street Journal lead to a short lived lefty boycott of Whole Foods, at least until liberals decided they couldn’t find a more expensive place to purchase their organic veggies.
All of these proposals are all well and good in and of themselves, and would probably do a good job at “bending the cost curve” as the President inaccurately claimed Obamacare would do. However they don’t do as much to reduce the number of people uninsured or dealing with people with pre-existing conditions. Those are issues as important as bending the cost curve is. That solution was John McCain’s healthcare proposal for the 2008 election. McCain’s plan would have provided a tax credit for low & middle income people to be applied to their health insurance premium. A good idea, except that he applied it to both individual and employee plans, boosting the cost of his program (although well below even friendly Obamacare estimates).
Recognizing the extra cost associated with Pre-existing conditions, McCain’s advisors were considering a proposal to have risk rated the tax credit so that people with pre-existing conditions would get a higher tax credit based on the rated expense of their particular condition. He also supported State based risk pools, similar to the ones in Obamacare.
So looking at all of these plans together, shaking them up in a big healthcare reform bag and baking at 350°, this is what I’ve come up with as key features of a good alternative to Obamacare:
1) Equalizing the tax treatment between individuals and businesses for health insurance premiums. This would mean giving a first dollar deduction to individuals and families on their taxes plus for low and middle income people, a tax credit that would be applied to the health insurance premium. McCain’s plan had a $5000.00 tax credit for family insurance premiums. That would probably need to be updated and perhaps indexed to the growth in the cost of health care insurance premiums.
2) I like the proposal to have a formula to increase the health insurance premium tax credit based on the severity of the pre-existing condition, but some pre-existing conditions are so severe that they are not insurable at any price. For those, I go along with the state risk pools; not as a separate insurance plan, but as a secondary payer to the member’s regular primary insurance. By applying and being accepted into a state pool, the member will be able to purchase regular insurance at regular prices and the diagnosis’s and procedures related to the members’ severe pre-existing condition the risk pool would pay as a secondary payer, similar to the way worker’s comp and auto accident insurance are handled.
These two main points handle the bulk of our current uninsured and pre-existing conditions crisis. Of course I concur with the bulk of the other alternative reforms as well, such as Romney’s idea to allow purchasing pools for small businesses and other organizations. I’m not clear as to why we would prohibit organizations like churches from organizing their own insurance purchasing pools.
There are many other options to Obamacare. Options that are cheaper, more efficient, and would actually facilitate expanding healthcare, that are not top down statist solutions that guarantee to be more expensive and reduce consumer choice and little else.
Tags: Politics, News, Obamacare, John Mackey, Whole Foods, Mitt Romney, Healthcare Reform, health insurance tax credit, pre-existing condtion,