An Integrated Healthcare Strategy

What's missing from the healthcare efforts undertaken by the Trump administration is a political strategy aimed at defeating leftist efforts to implement a national socialized healthcare scheme like those in England and Canada. Absent such a strategy, present efforts to repeal and replace ObamaCare simply play into the left's long-term plan to force national healthcare by discrediting all alternatives.

There is a strategy that has a good chance of working -- but there's a risk: adopting only the parts the GOPe will easily accept hands the ballgame to the democrats.

The strategy has five elements:

  1. Take legislative action in the house to completely defund all actions authorized under both ObamaCare and Dodds-Frank. Pass single paragraph, full repeal legislation on both in the House and force the Democrats to campaign for 25 senate seats on 2018 on their opposition to doing what the public wants.
  2. Put a full court press on legislation, much of which Congress is currently working on, covering ancillary issues including tort reform; deregulating interstate commerce; and, equalizing tax treatment for group and private health benefits plans.
  3. Fully privatize the VA by shifting service responsibilities to privately run, for profit benefit plans. Ensure that beneficiaries have financial incentives to minimize usage and can annually choose both carriers and benefit packages.
  4. Have the secretary of Health and Human services develop for congressional review and approval a plan to place Medicaid and Medicare entirely under state control, dissolve the Centers for Medicare and Medicaid Services, and eliminate to the maximum extent possible federal legislation and/or regulation impeding state operation of these programs.
  5. Pass a new national healthcare reinsurance act limiting losses incurred by privately owned reinsurance providers on health catastrophe coverage provided by nongovernment health insurers.

Congress would decide, both as part of the initial legislation and periodically thereafter, what constitutes qualifying coverage, what the limits are, how risks are shared between government and the reinsurance industry, and what steps, if any, may be necessary to deal with states seeking to reduce their Medicaid/Medicare costs by means such as enrolling people with private health care insurance providers operating under the reinsurance umbrella.

The three most important effects this strategy will have are:

1. Politically, this strategy has Republicans doing something that seems even more unlikely than Trump's election: honoring their commitments to the voter as the voters understand them.

If this were to happen, the Democrats and their media colleagues would be expected to gnash teeth, wail loudly, glorify victims, increase their commitment to violence, riots, and the invocation of various isms; file multiple lawsuits with their colleagues in the judiciary; mislead the public about their own positions, and be utterly wiped out in the 2018 midterms.

2. Politics would also dominate what happens to state and federal budgets. It seems reasonable to hope that the transfer of most Medicare and Medicaid monies and decision-making to the states would trigger significant experimentation with service delivery and management -- and, if so, you'd expect to see some states driving toward fully socialized health care; others following the VA privatization model; most just muddling along with no clear direction; and an eventual resolution after the 2024 elections decide the political issues surrounding the leading options.

That differentiation among the states is critical because those states choosing to manage Medicare and Medicaid monies down the Democrat route to health care can be expected to reclaim VA and similar facilities while implementing increasingly bureaucratic rules for all of healthcare. That, as Canada, the U.K. and every other country from Cuba to Holland adopting nationalized healthcare have shown, will be followed by institutionalized mediocrity, the development of long waiting lists, huge annual deficits, removal of quality indicators from public review, and wildly enthusiastic claims that all will be well if only a politician promising to root out fraud and waste in the system is elected.

In contrast, those states opting for the capitalist approach along the lines of the VA privatization will thereby create incentives for medical investment, medical training, and the in-migration of patients and health care professionals from other states. As a result, these states will develop lively markets in which health care quality improves as costs go down.

Trigger this process in 2017, and by 2020 people in those states that are essentially just muddling along waiting for the politics to settle will start to see both significant contrasts between the cost and care available in states representing the two extremes and the effect of socialist state attempts to cut costs by freezing out people who aren't legal, permanent, state residents. More importantly, those differences will become both more obvious and more dramatic as long as democrats in interventionist states stick to their policies - by 2024, therefore, most Americans will understand the differences well enough to more or less permanently reject leftist dreams of bringing Canadian or British style nationalized health care to the United States.

3. A federal reinsurance program budgeted in the $140 billion range should drop the cost of a basic individual policy for a 30-something with no known health problems and a $500 annual deductible to perhaps $35 a month -- and this will require very little in federal administrative effort because there simply aren't many reinsurers in the business.

The expected result, as long as Congress prevents the reinsurance carriers from laying off all their risks on the federal government, is that retailers will move rapidly down market and then start to compete by strategies like sliding downslope to benefits management for smaller groups or building consumer value through policy linkage to financial products like permanent life.

Note in this, that insurance companies dealing with people with pre-existing conditions have their risks limited by the reinsurance carrier which, in turn, passes costs in excess of the limit set by congress to the federal government. This program therefore greatly reduces the retail cost of coverage for people with no pre-existing conditions, and caps the cost essentially at the reinsurance limit for those facing known or imminent catastrophic health care costs.

Thus the net on this strategy is that it provides exactly what Trump promised and most conservatives want: essentially universal health care coverage in a free health care services market, while practically forcing the Democrats to destroy themselves in states where their majorities give them the ability to grow Medicare/Medicaid into fully socialized systems. 

What's missing from the healthcare efforts undertaken by the Trump administration is a political strategy aimed at defeating leftist efforts to implement a national socialized healthcare scheme like those in England and Canada. Absent such a strategy, present efforts to repeal and replace ObamaCare simply play into the left's long-term plan to force national healthcare by discrediting all alternatives.

There is a strategy that has a good chance of working -- but there's a risk: adopting only the parts the GOPe will easily accept hands the ballgame to the democrats.

The strategy has five elements:

  1. Take legislative action in the house to completely defund all actions authorized under both ObamaCare and Dodds-Frank. Pass single paragraph, full repeal legislation on both in the House and force the Democrats to campaign for 25 senate seats on 2018 on their opposition to doing what the public wants.
  2. Put a full court press on legislation, much of which Congress is currently working on, covering ancillary issues including tort reform; deregulating interstate commerce; and, equalizing tax treatment for group and private health benefits plans.
  3. Fully privatize the VA by shifting service responsibilities to privately run, for profit benefit plans. Ensure that beneficiaries have financial incentives to minimize usage and can annually choose both carriers and benefit packages.
  4. Have the secretary of Health and Human services develop for congressional review and approval a plan to place Medicaid and Medicare entirely under state control, dissolve the Centers for Medicare and Medicaid Services, and eliminate to the maximum extent possible federal legislation and/or regulation impeding state operation of these programs.
  5. Pass a new national healthcare reinsurance act limiting losses incurred by privately owned reinsurance providers on health catastrophe coverage provided by nongovernment health insurers.

Congress would decide, both as part of the initial legislation and periodically thereafter, what constitutes qualifying coverage, what the limits are, how risks are shared between government and the reinsurance industry, and what steps, if any, may be necessary to deal with states seeking to reduce their Medicaid/Medicare costs by means such as enrolling people with private health care insurance providers operating under the reinsurance umbrella.

The three most important effects this strategy will have are:

1. Politically, this strategy has Republicans doing something that seems even more unlikely than Trump's election: honoring their commitments to the voter as the voters understand them.

If this were to happen, the Democrats and their media colleagues would be expected to gnash teeth, wail loudly, glorify victims, increase their commitment to violence, riots, and the invocation of various isms; file multiple lawsuits with their colleagues in the judiciary; mislead the public about their own positions, and be utterly wiped out in the 2018 midterms.

2. Politics would also dominate what happens to state and federal budgets. It seems reasonable to hope that the transfer of most Medicare and Medicaid monies and decision-making to the states would trigger significant experimentation with service delivery and management -- and, if so, you'd expect to see some states driving toward fully socialized health care; others following the VA privatization model; most just muddling along with no clear direction; and an eventual resolution after the 2024 elections decide the political issues surrounding the leading options.

That differentiation among the states is critical because those states choosing to manage Medicare and Medicaid monies down the Democrat route to health care can be expected to reclaim VA and similar facilities while implementing increasingly bureaucratic rules for all of healthcare. That, as Canada, the U.K. and every other country from Cuba to Holland adopting nationalized healthcare have shown, will be followed by institutionalized mediocrity, the development of long waiting lists, huge annual deficits, removal of quality indicators from public review, and wildly enthusiastic claims that all will be well if only a politician promising to root out fraud and waste in the system is elected.

In contrast, those states opting for the capitalist approach along the lines of the VA privatization will thereby create incentives for medical investment, medical training, and the in-migration of patients and health care professionals from other states. As a result, these states will develop lively markets in which health care quality improves as costs go down.

Trigger this process in 2017, and by 2020 people in those states that are essentially just muddling along waiting for the politics to settle will start to see both significant contrasts between the cost and care available in states representing the two extremes and the effect of socialist state attempts to cut costs by freezing out people who aren't legal, permanent, state residents. More importantly, those differences will become both more obvious and more dramatic as long as democrats in interventionist states stick to their policies - by 2024, therefore, most Americans will understand the differences well enough to more or less permanently reject leftist dreams of bringing Canadian or British style nationalized health care to the United States.

3. A federal reinsurance program budgeted in the $140 billion range should drop the cost of a basic individual policy for a 30-something with no known health problems and a $500 annual deductible to perhaps $35 a month -- and this will require very little in federal administrative effort because there simply aren't many reinsurers in the business.

The expected result, as long as Congress prevents the reinsurance carriers from laying off all their risks on the federal government, is that retailers will move rapidly down market and then start to compete by strategies like sliding downslope to benefits management for smaller groups or building consumer value through policy linkage to financial products like permanent life.

Note in this, that insurance companies dealing with people with pre-existing conditions have their risks limited by the reinsurance carrier which, in turn, passes costs in excess of the limit set by congress to the federal government. This program therefore greatly reduces the retail cost of coverage for people with no pre-existing conditions, and caps the cost essentially at the reinsurance limit for those facing known or imminent catastrophic health care costs.

Thus the net on this strategy is that it provides exactly what Trump promised and most conservatives want: essentially universal health care coverage in a free health care services market, while practically forcing the Democrats to destroy themselves in states where their majorities give them the ability to grow Medicare/Medicaid into fully socialized systems. 

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