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February 10 2017

How To Cure The Very Sick Healthcare System From Its Deadly Disease: Obamacare

Washington Examiner
Hadley Heath

Secretary of Health and Human Services Tom Price has officially taken the helm of his department. The former congressman and orthopedic surgeon will soon find that our healthcare system today is a very sick patient. The disease? Obamacare.

Like many diseases, there are treatment options that range from aggressive surgery to simply relieving the symptoms or palliative care. Sure, we could tinker around the edges and make Obamacare a little more bearable. But without a total repeal, the healthcare system will remain on a path that inevitably leads to its demise.

The American people have expressed that major change is wanted and warranted: If a replacement plan could be passed simultaneously, and existing coverage could be continued during a transition period, 70 percent support Obamacare repeal. Obviously, a heart surgeon wouldn't call his work complete after only removing the dying heart, he'd put a new heart in.

Much of Obamacare can be repealed through the process of budget reconciliation. We saw this when Congress sent such a partial repeal to the desk of former President Barack Obama, who vetoed it. Obviously, President Trump would sign such a bill.

But more is required of the president than his signature. His administration must take action to roll back the regulatory burden of the law, much of which may not be undone through reconciliation. The text of Obamacare refers to "the Secretary" more than 2,500 times. That's power for new Secretary Tom Price, who can effectively gut Obamacare.

Live by the administrative state, die by the administrative state.

Through these congressional and administrative actions, we can take the heart of Obamacare out. But this is where there are some doubts. Do Republicans have a donor heart ready? In other words, can they coalesce behind a legitimate replacement plan for Obamacare, one that provides a smooth transition for those enrolled in exchange plans and the Medicaid expansion? Can such a plan pass political muster (that is, garner 60 votes in the Senate to become law)?

It's certainly not a lack of ideas holding back replacement: There are several plans to consider. Sen. Rand Paul, R-Ky., also a physician, introduced the Obamacare Replacement Act. The Republican Study Committee put together the American Health Care Reform Act. Sens. Bill Cassidy and Susan Collins of Louisiana and Maine introduced a half-measure, the Patient Freedom Act, which gives states the choice to stay in Obamacare or opt into an alternative system.

Having too many plans is as bad as having no plan, as there is no unity. But a careful look at these plans shows they do not vary in the core policy approach, only details.

Here's what they all seek to do.

First, we must "make insurance great again" by making insurance insurance again. Under Obamacare, "insurance" is a misnomer. Instead, health plans have become Trojan horses for redistribution, from young to old, from healthy to unhealthy. In fact, the system was headed that way before Obamacare, too.

Health plans have become far more expensive than they need to be because they're required to cover a wide array of services, many of which don't need to be paid for via an insurance plan. We don't use insurance to pay for routine expenses in any other area of life. Take car insurance: We don't use it for oil changes or tune-ups.

Some will say that health insurance is different. "You can get a new car; you can't get a new body!" they say. But this is beside the point. Health insurance doesn't keep you healthy any more than car insurance keeps your wheels on the road. The point is that insurance, no matter the type, is meant to protect you financially. People buy it because they are mitigating risk. Higher risk customers should expect to pay more, while lower risk customers can pay less. Otherwise it's not a good deal for them.

We've stopped treating health insurance this way, and that's part of our problem. To make insurance what it's supposed to be, we have to repeal Obamacare's rules about "essential health benefits" (the mandates that require routine care to be covered for everyone) and restore risk-based pricing. Furthermore, Republican plans encourage the use of tax-free health savings accounts for healthcare costs paid outside of insurance channels.

This will surely be disparaged as the undoing of "consumer protections" that make insurance so robust, but the ultimate consumer protection is market competition. Today, too many Americans lack choices. In 40 percent of counties, Obamacare exchanges customers have only one insurer available. How's that for competition?

But most Americans aren't in the exchanges. Most privately insured Americans don't choose their insurance at all. Their boss chooses for them, because most people get insurance through their employer, and for good reason. Since the World War II era, Americans who get health insurance through their jobs have enjoyed a tax exclusion on those benefits. This gives the greatest advantage to high-income people, and leaves those without employer-based insurance out in the cold.

To address this, Republican plans all provide a universal tax credit for health insurance, so that Americans can get the same financial relief no matter where they get their insurance. This would make insurance more equitable, more competitive and more affordable.

Secondly, Republicans must address those who've been helped by Obamacare. Even though the law created far more losers than winners, the winners will rightly want to know what's become of them. Transitional assistance is in order, and the final replacement plan can be designed so that Obamacare's subsidies do not stop flowing until the replacement system is up and running.

Some opponents of free-market healthcare charge that it's a fine system for healthy people, but it would wreak havoc for the sick. This need not be the case. Republican plans provide federal funding for state-based high-risk pools for anyone diagnosed with a pre-existing condition while uninsured. For those who have insurance when diagnosed, there are protections against having coverage dropped or excluded.

Ideas like these should be enough to get bipartisan support. Of course, repealing and replacing Obamacare will be difficult, no doubt. But it's what the American people want, and now Congress and the White House have the power to do it. As it is for patients who are very sick, time is of the essence.

Independent Women’s Forum’s mission is to improve the lives of Americans by increasing the number of women who value free markets and personal liberty. Sister organization of Independent Women’s Voice.
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