Sunday, March 6, 2011

Conservative Health Care Proposal

I came across this comment recently, which is a response to a question asking for a conservative alternative to federally based health care policy. I've been looking for a community-based conservative perspective to round out some of the views I've expressed; the author graciously acceded to my request to publish it on HealthMatters. 
It's hard to lay out a program that will satisfy you given that you want something which deals with all issues better than Obamacare. But that rests on what your opinion if of those issues. For me, liberty is a major issue, for instance, but perhaps for you it is irrelevant to this debate. Still, there is an answer, though I doubt it will help you much.
First is to figure out how we got to the point we have, where most people using medical services use a third party payer to pay the bulk of the cost. Tax code provisions is the answer, along with wage controls, all during WW2. This matters because if any commodity is provided to you at a cost lower than its actual cost (someone else has to pay the difference) then you are likely willing to use more of it (health care services) than you otherwise would if you had to pay the full amount yourself.
So, if you want to control costs, which was a claim of Mr. Obama and which nothing has been done in this "reform" to do so, then you must connect the user of the service more closely to the cost of the service. Ah, but medicine is expensive, you might say. And you are right, but for most uses the costs are within the ability of most consumers to pay. Like regular check-ups, or visits to urgent care for colds, simple cuts, and so on. But you'd also want to connect consumers to those higher cost services more as well. Higher co-pays, higher deductibles, and so on, could help.
Second, eliminate all tax preferences for medical care costs. Employers should get no tax benefit to provide medical insurance for you, OR, you should have to declare the benefit as income. But we should not be able to both deduct the cost as a business expense and not have you declare it as income. It's this kind of irrationality that has helped to lead us to an era where we feel entitled to someone else's money in order to gain some personal benefit with it.
Third, for the millions in the USA unable to afford their own insurance, your state, or mine, but all states in total, should be able to provide intra-state benefits if they want. This is not a federal issue, and about the only thing, imo, that Romney gets right about this subject is that the feds have no constitutional authority to involve itself. How the states do this is up to them, but I would think that wise states might offer a refundable tax credit for state residents to buy their own major medical policy. But for those who want the benefit provided more directly I think there is a way to both help insure more people and cut costs.
Provide a voucher to each person who qualifies that provides to them something slightly less that what a regional policy for their status might cost. And if, during the covered year, those people using those vouchers are able to use less medical care, and so save money for the state, we should reward their frugality with a "savings sharing" policy--for every dollar saved to the state the person in question might get some percentage, say 25%, of that amount. Say a year of coverage costs $5,000 where you live. Give the beneficiary a voucher for $4,200 and let insurers work out ways to provide coverage for less. But say you end up finding a plan for $3,500 that is suitable, so you save $700 for the government. Well, let's reward you with part of that amount, in your pocket.
If taxes can be said to guide behavior, then certainly putting money into your pocket could guide your behavior too. So, everyone who wants coverage can get it, and incentives that would cause people to use less medicine though not punish them if they want to use more would be in place. More people covered, structural cost controls put into place which don't require some form of governmental rationing, and your liberty is not diminished. Add to that the fact that the US Constitution isn't once again peed on, and I think many conservatives would be right there willing to help.
But, and I mean this sincerely, you really didn't want someone to present a valid alternative which solves the problems you claim exist and does it without the oppresiveness of a federal program, did you?