At the risk of jeopardizing my reputation as a free marketeer and anti-tax crusader, I feel it’s time that someone lay out the absolute truth about the current health care crisis and provide the obvious solution which no one in government seems to have the brains or integrity to propose. As a caveat, I do not generally advocate government solutions to problems or any program which redistributes wealth through taxation, but if we as a nation are hell-bent on keeping the quality of health care that we have now and also making it available to all of our citizens, there is only one solution which makes sense and it isn’t the 1000 page pile of idiocy which President Obama and the Congress have cobbled together.
I’ve had enough of the ridiculousness, because the solution to our current health care problems is simple and elegant and can be explained very briefly and does not involve mandates or nationalization or any more health care rationing than we already have now. It won’t destroy the insurance industry or bankrupt the population and it won’t add a cent to the deficit. It requires only five very simple steps.
- 1. Tax every citizen at a rate of 10% of their adjusted income after exemptions and deductions to pay for national health care. Elimintate the Medicare tax, so the real increase in taxation is actually only around 6% for most taxpayers. Those with low incomes would pay very little if anything because they have little or no taxable income. This would raise about $600 billion.
- 2. Give every citizen a yearly $2000 voucher which can only be used to pay for health insurance. Allow them to pay any amount they wish above that voucher for enhanced coverage or any other special services the insurance companies can sell them. This would cost about $600 billion a year.
- 3. Prohibit insurers from denying coverage based on preexisting conditions, but allow them to increase the cost of coverage by up to 100% above their standard rates for patients with chronic conditions.
- 4. Require that all health insurance be purchased individually instead of through group plans and eliminate all tax credits for businesses or other organizations for providing workers with insurance. Also eliminate state restrictions on health insurance and establish simple nationwide standards.
- 5. Partially privatize Medicare/Medicaid and gear it towards offering a basic but very limited health coverage plan which is by design inferior to private insurance except that it has low copays for preventive care and the use of clinics or a family doctor instead of an emergency room. Fix the price of that plan at $2000 for anyone earning under 2 times the poverty level — about $22,000 a year.
Step 1 raises the necessary money, but does it at a reasonable rate which is not more than the average taxpayer would currently pay for very basic private insurance. I don’t like the idea of raising taxes at all, but once you accept the idea of national health care then it is inevitable. Step 2 limits voucher values based on the money raised, but the vouchers would be enough to provide adequate minimal insurance from a very basic public plan or provide a substantial base for those who would want better coverage by throwing in some of their own money. This makes the government the single, primary payer but leaves control of insurance choices entirely in the hands of the consumer without creating significant additional healthcare bureaucracy. Being able to augment your coverage reduces the problems with rationing of care which you see in Europe or Canada. Step 3 might raise rates somewhat, but that would be mitigated by the existence of a basic semi-public plan and more competition. Step 4 is essential to end the monopolistic practices of the insurance giants and reintroduce competition which will bring prices down. Step 5 provides health care for those who can’t afford or won’t pay for it under the current system, but at a level which will not compete with private plans.
The result of these five steps is universal health coverage at a rate of taxation which is not significantly higher than what we are paying into the system now through taxes for Medicaid and what we are paying for private insurance, with the assumption that most consumers will pay somewhat more than the voucher provides out of their own pocket to enhance their coverage. This proposal takes care of the problem of the uninsured and does all of this while encouraging free market competition and not eliminating private insurance companies, though it does take away some of their special protections and pressures them to be more competitive.
Obviously this is only the bare bones of a plan and would require some fine tuning, but the basic math works and the plan would be effective in accomplishing all of the objectives which our political leaders claims they want but seem not to be able to actually include in their legislation.
Remember, I don’t really endorse this type of a solution. Yet if I can see it despite my obvious dislike for some aspects of it and admit that it would work, tell me why the proposals which the President and Congress are considering make so little sense and bear so little resemblance to this simple plan.