Bluegrass Beacon: Control costs, make health care great again

BluegrassBeaconLogoThe latest RINO to lose is the Repeal In Name Only health-care bill – also known officially as the American Health Care Act (AHCA) – meant to replace the Affordable Care Act (ACA).

To paraphrase Kentucky Sen. Rand Paul, what’s the point in replacing a program that subsidizes, taxes, punishes and practices conniving cronyism with a policy that promises a “refundable tax credit” (subsidizes), financially castigates those with good insurance (taxes), forces individuals who allow their coverage to drop to pay 30 percent more to insurance companies just to get reinstated (punishes) and props up insurance companies with $100 million of “reinsurance” funding (conniving cronyism)?

Nothing offered by Washington in either of these approaches effectively addresses the primary culprit in the current health-care fiasco: cost.

Forcing insurers, for example, to cover an array of 10 “essential health benefits” – from maternity care to mental health and drug abuse – greatly drives up the cost of premiums for everyone.

Why, for example, is a 65-year-old man forced to purchase a health-insurance plan that includes maternity coverage?

Such mandates drive up the cost of his plan, and, depending on his financial status, may require a taxpayer-provided handout to help him afford the premium, making him dependent on government to pay for his insurance that includes coverage for services he neither wants nor needs.

If we’re going to include government subsidies in our health-insurance policy, why don’t we at least do it in a way that actually helps some folks truly in need without penalizing everyone else?

Supporters fear getting rid of Obamacare would result in really sick people with longstanding illnesses being left without access to adequate coverage.

It doesn’t have to be that way if privately run high-risk pools are allowed as part of any “replacement” agreement.

Just like swimmers “share” the pool’s water, so participants with preexisting health conditions divvy up coverage costs.

Since participants in such a plan offer a much higher risk of filing claims and using health-care services, premiums will be higher than those of healthy consumers in the individual market.

Government can intervene in a limited manner by providing subsidies to people in these pools that help bridge the gap between lower incomes and higher premiums.

Taking this approach reveals a stark contrast between a safety-net program and sledgehammer-to-an-ant approach that happens when government tries to run the entire health-care system.

It’s the distinction between offering food stamps to low-income individuals to purchase their groceries versus government running the grocery stores.

Witness the disaster known as “Section 8 housing” and understand: there’s a considerable difference between government offering housing vouchers to assist lower-income citizens in finding a place in the private marketplace to rent and the demonstrated public-housing debacle found in cities in the commonwealth and across the nation.

Such a policy would help folks with preexisting conditions engage in their own care as they shop to find a plan that works best for them – the process of which will expose them to what their coverage truly costs and the care they can expect to receive.

Neither the ACA nor the ACHA does much of anything to engage individuals – with or without preexisting conditions – in their own care, especially when it comes to knowing the cost of products like prescription drugs or services such as surgeries.

The combination of consumers not knowing anything about the price tag of their care while government mandates products and services insurers must provide and then turns around and subsidizes them offers little incentive to providers to control costs – the primary obstacle to making America’s health-care system great again.

Jim Waters is president of the Bluegrass Institute for Public Policy Solutions, Kentucky’s free-market think tank. Read previous columns at www.bipps.org. He can be reached at jwaters@freedomkentucky.com and @bipps on Twitter.