A simplified solution to the healthcare reform debate

Next week, the Senate is expected to vote on its revised bill to repeal and replace ObamaCare.  As of this moment, there are at least two Republican senators doubtful that they can support the proposal.  This would doom the bill; since reconciliation can be used once during a session this may preclude any meaningful repeal of the failing Affordable Care Act.  After seven years of the promise by Republicans to undo the healthcare funding and regulatory legislation passed in 2010 under reconciliation they have exhibited inability to govern in the most “deliberative” body in the world.  Since no Democrat will help in this process (putting the lie to the principle of compromise) a totally different approach is necessary.

In the House, a compromise was reached between the conservatives and moderates within the Republican party utilizing the repeal of various sections of ObamaCare and maintenance of others favorable to some.  However, in the Senate this approach has not secured enough votes among Republicans.  Sweeteners such as funds for opioid addiction treatment (the usual Washington method to gain votes) has not changed the calculus.  Further, the revised bill keeps some taxes that were imposed by ObamaCare on the wealthier (increased payroll taxes) to deflect liberal criticism. This also fails to unite moderate republicans. 

Recently, Texas Sen. Ted Cruz (among the most conservative Republicans) proposed an option for insurance companies to offer both Obama-styled policies and reduced ones that would be less expensive at the individuals' choice (which was incorporated into this bill).  Maine's Sen. Susan Collins (among the most moderate republicans and opposed to this bill) and Louisiana's Sen. Bill Cassidy (a physician) previously proposed allowing each state to decide for themselves whether they wished to continue ObamaCare.  This principle of choice could be the basis of all reforms.  If we combine this with the Mitt Romney ideal put forth during the 2012 election, that each state is a “laboratory of innovation” in the nation, then perhaps this impasse could be solved.

As a disclaimer, I must state that I prefer a clean repeal and then a replacement plan (if it is market-based) much as Kentucky's Sen. Rand Paul (also a physician and opposed to this latest bill) has proposed.  It appears that this is unlikely at this time.  So, I realize that the dysfunctional Republican caucus needs more flexibility.  This could be done by allowing choice in all aspects.  This might be radical for Washington where politicians have large egos and disregard for the Tenth Amendment to the Constitution.  

Simply put, the first change to the bill would allow each state the option to leave the Affordable Care Act.  This would eliminate all provisions within that state and allow them to innovate any approach to healthcare they prefer.  Further those states could be given the freedom to accept Medicaid funds through block grants.  They would then be able to create a system that works for their population.  Free from almost all the regulations imposed from Washington, they could create an efficient Medicaid system that could substitute greater at-home care for nursing home payments.  They could allow poorer citizens to buy into Medicaid through a sliding scale premium base upon income.  These states would have to manage their finances and could more easily be held accountable by voters.

Second, all citizens could be allowed the freedom to purchase medical policies that suit their needs even if their state continues ObamaCare.  This will allow lower cost premiums for private purchases.  This year my family premium will be $12,000 with a $13,000 deductible for in-service care, and an additional $13,000 for out of network care.  This is hardly affordable for most Americans.  Some of the ten required services in ObamaCare are worthless for my family.  Republican senators might not be able to argue against those in their states being given this choice.

Coverage for pre-existing conditions must carry some penalty for lapses in coverage, whether it be reduced coverage for some period or higher premiums.  Insurance requires some assessment for risk.  Higher costs for coverage for older citizens is understood as handling this risk.  This could be limited to a reasonable amount.  Such policies could be more flexible when purchased as Medicare deductible coverage, reducing this cost to seniors.

The taxes imposed upon citizens would be removed and replaced by a user fee imposed upon those participating in the older (Obama) system that would then be used to subsidize premiums for poorer persons.  This would be limited in scope so there would be reduced incentive to continue the failing system.

States that accepted enhanced Medicaid funding under ObamaCare fear the loss of these additional dollars.  This includes some Republican governor-led states, putting pressure upon senators.  To encourage block-granting in these states, the initial funding could be pegged at a higher level with their ability to alter regulatory complexities.  Again, the aim is flexibility and choice.

Further, the idea of large group healthcare purchases should be expanded, including purchases across state lines.  These principles further market forces which allows for cost controls.  Liberals have argued that the efficiency of government regulations can limit unnecessary costs, but this has not worked.  Few argue that transparency at the grocery store (where prices are clearly visible) is bad.  This could be done through publishing statistics on cost and outcome at larger institutions.  Further, in future legislation malpractice liability could be reformed; this would be opposed by trial lawyers.

Failure to remove the onerous aspects of Obmacare and its regulatory burdens dooms our healthcare system.  We have the best medical care in the world.  The argument is about how to finance it.  Liberals seek a single payer system while conservatives wish to return to market forces.  The present system is unsustainable and weary Republicans must replace it or suffer at the polls.