Two Changes That Would Revolutionize Obamacare

As I wrote yesterday, I’m willing to be optimistic with regard to Obamacare, even though I am a conservative. I believe it has the potential to make our health care system better in a few years than had we stuck with the status quo. I’m not totally sold on it, for sure, but I’m also sure it’s not the linchpin that sends America over the cliff into a socialist nightmare.

All that being said, there are a couple of serious flaws that I think would be better served by more freedom-based solutions rather than government ones. The first would be reforming the exchanges. I would do this in two ways. Let me start off by saying the concept of the exchanges is actually quite the conservative idea. All the controls and limitations imposed by the ACA are not, but that's something that can be worked out. Don’t know why conservatives think consumer choice in a competitive market is somehow bad – I guess they do because it has the president’s name on it. But there are a couple of problems that need to be addressed.

The first problem is having the government involved at the front end of the process. I understand it was set up that way to help with the low-income subsidies. But that could be done simpler by the individual after they have found the plan they want. The problems with the healthcare.gov web site would have been alleviated for the most part if people could find the coverage they need for themselves and then inform the government after the fact to obtain the subsidy. The government could have provided information to the various insurance companies beforehand so they could give prospective clients guidance as to how much of a subsidy they could expect.

The second aspect of the exchanges that needs to be addressed is the elimination of state insurance regulations. Here in Alabama, most people could only choose health care plans from one company, the same company that insures more than 90% of state residents. One of the problems was that Alabama chose not to set up its own exchange but to allow the federal government to do it for them. Not the most conservative-minded move by a GOP-controlled state. But the main problem is the state insurance board’s regulations are set up for the benefit of the one company, and the federal exchange had to abide by those regulations. I have heard several people blame Governor Bentley, a doctor by trade, for setting up the state to benefit one company, but the fact is those regulations have been in place for a long time.

The ironic fact is that had the ACA gone farther to remove the various states’ insurance regulations and established one broad set of regulations that applied equally to everyone, the exchanges would have been more successful and people would have had more choices. Think about the car insurance market. You can’t watch TV anywhere for 15 minutes without seeing a car insurance commercial. They offer all sorts of discounts, “vanishing deductibles,” cash back for no incidents, etc. How can they do that? Because there are practically no regulations in any state on car insurance, besides minimums for liability coverage. I know car insurance and health insurance aren’t exactly the same thing, but conservatives should be pushing for more consumer freedom within the framework of Obamacare instead of demanding its repeal and doing more damage to consumers. When consumers and providers are free to choose, they come up with creative solutions that provide benefits for both.

Alabama or any other state with a Republican governor and legislature could have decided they were going to customize their exchange with the best possible conservative ideas, and they would have become a shining example to the rest of the states as to how to implement Obamacare effectively. But no, they ironically decided to opt out of the process, allow the federal government to do it for them and then complain about the results. But at least they were able to go to those GOP fundraisers and proclaim they were fighting the president’s agenda. A more effective fight would have been to turn the tables on him and implement freedom-based ideas.

The second problem I have with the ACA is the expansion of Medicaid that went with it. This does nothing to streamline the medical system. It discourages the upper tier of the low-income population from participating in the exchanges. Medicaid is a cesspool of bloat and waste, and has been pretty much from the beginning. The expansion of Medicaid is actually counter-productive to the goals of the ACA, or at least its stated goals (I’m not convinced that the president’s goals are not to work toward a single-payer system).

A better solution would be to lower the top income threshold for Medicaid and allow those at the top of that income bracket to obtain heavily subsidized insurance plans from the exchanges. This would save taxpayers a lot of money. Whatever the government would underwrite for the premium subsidy would be much less and be spent more efficiently than if they were allowed to remain in Medicaid.

Beyond that, for the poorest of the population Medicaid should take more of an HSA format rather than the single-payer system that it is now. Poor people are not stupid. If given the incentive, they will opt for cheaper, more efficient health care solutions. For example, if we assigned them a certain amount per year based on family size, income and overall health and let them keep 25% of what they didn’t spend by the end of the year, there would be repercussions all over the place, most of them good. The taxpayers would still be footing the bill for these people’s care needs, and we would need to reassure them that everything they need would be there in the event of a catastrophe. People I have talked to in the health care industry will tell you that Medicaid patients are the worst for coming into doctor’s offices and emergency rooms for minor complaints. They do this because they can – Uncle Sam is going to foot the bill.

These two changes would do wonders to meet the stated goals of the ACA: to reduce the burden of health care on consumers and the health care system. We don’t need a bloated, inefficient single-payer system. They do seem to work in small, compact countries, but the US is a vast, diverse country. There are flaws in the case studies presented by liberals, all of which involve countries much smaller and with a more compact population than the US. A single-payer system would be as devastating for the entire country as the current single-payer system is for the poor and for veterans. That’s not the solution. The ACA is, perhaps unintentionally, a nudge in the right direction, but only if conservatives are willing to take advantage of it.

Why Obamacare May Not Be As Bad As You (or I) Think It Is

I am an unabashed conservative/libertarian who doesn’t see the Affordable Care Act (Obamacare) as being the end of the world. There. I said it. You can cancel my membership in the C/L club if you wish, but before you do, I want you to hear my reasons for guarded optimism. Some might say that this article is late, since the ACA is already being implemented. But until the GOP gets off its never ending drumbeat of “repeal, repeal, repeal,” a voice like mine is going to be relevant.

Everyone in the U.S. for decades has admitted that there are serious problems with our health care system. I, like most conservatives, blamed the increased role of government in the system as the primary culprit. I still view it that way. But an idealistic, John Galt approach of “I refuse to claim power over you, not even for the moment before I set you free” is not going to work. Government got us into this mess, government will have to get us out.

For many years, conservatives have said that one of the main problems with the American health care system is that people had no way to gauge costs. If you had insurance (and most people who needed it or wanted it had it, no matter what liberals said) you just went to the doctor, paid your small co-pay and that was it. Yeah, you might look at the bill afterward and laugh about a $50 charge for your big souvenir water mug, but that wasn’t your problem. The insurance company paid for all that; that’s what you were paying them for. Meanwhile the cost of insurance to your employer or you directly kept going up and up, paperwork costs for doctors and hospitals kept going up and up, and the percentage of the bills that were actually getting paid was going down.

For better or for worse, Obamacare addressed this problem. The majority of people have higher deductibles and co-payments now. Pricing is way more transparent. Given a few years, people will become more personally invested in their health care choices and needs. They will be more aware of the costs of medical care, and will take notice when they are overcharged for things. It might be unpleasant to deal with that reality, but we conservatives are all about dealing with unpleasant realities, right? Liberals are the ones who deal in blissful ignorance. Blissful ignorance was all the average consumer of health care in this country had to deal with for decades. Obamacare is changing that. Personally, I think that is a change for the better.

It’s kind of like President Bush’s reform of Medicare about a decade ago. At the time, I was opposed to it. I still think the expansion of prescription drug coverage was a bad idea, but that’s not the point. I remember getting angry the first few years every fall when there would be an endless stream of commercials promoting the Medicare supplement open enrollment coverage. But then it hit me: Bush’s plan gets private companies in the business of underwriting and paying portions of Medicare that would have been paid for by my tax dollars before. That was actually a very conservative move, ironically one of the few conservative policies Bush actually implemented in his term of office.

And people are engaged with it. All the ads we will see this fall will encourage seniors to consider their options carefully. “Consider?” “Options?” That sounds pretty conservative to me. It sure doesn’t sound like a monolithic government imposing its will on the population. By all accounts, Bush’s reforms have actually reduced government outlays for Medicare. Hopefully, in time, as the rest of us become more engaged with our health care options we will see our costs go down through ACA as well.

Are there problems with Obamacare? Yes. I still believe the individual mandate violates individual rights, but the Supreme Court said it was a tax, which doesn't really make sense. Besides that, what I find most troubling is the way the Administration has chosen which parts of the bill it wants to implement and which it doesn’t. That sets a dangerous precedent for the future of the country. Letting any administration choose which laws, or which parts of laws, it wants to enforce and which it does not is a surefire recipe for injustice and anarchy. Is there a danger that people will be so angry over the higher costs that a liberal administration will step in and implement a single-payer system like the Clintons pushed for 20 years ago? Yes, there is, and conservatives need to be on guard against that. Are there other problems? Yes, and my next article will address two that I think need to be corrected immediately.

Most of the conservative criticism you hear about Obamacare these days has to do with the new higher out-of-pocket costs. I’m just not convinced that higher out-of-pocket costs are necessarily a bad thing. The more people realize what their health care actually costs, they might be more willing to forgo that trip to the emergency room for some penny-ante thing and instead pick up some bandages or pain medicine at the store. Or they might skip the unscheduled trip to the doctor when the little one has the sniffles. This would not be a bad thing. One of the reasons medical care has been so bad in this country is because people were flooding the system with minor problems because they weren't paying for it, the insurance company or Medicare or Medicaid was paying for it.

We conservatives need to be honest brokers. We need to challenge the Administration when we believe it is misleading the American people. We need to present our own ideas in a compelling, honest way. But we also need to be more concerned with doing what is best for the country rather than scoring political points. I understand that we have a different vision for what is best for the country than liberals do, and that is fine. We ought to be true to our vision. But hunkering down and waiting for the current administration to be over is not good leadership, nor is it true to our vision. And neither is pretending every detail in the ACA plan is a disaster, when if a Republican president had proposed many of the same concepts we would be defending it nonstop.