Conservatives should articulate a vision for Patient Power.
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These reforms should be complemented by the Consumer Choice Tax Credit, which would effectively level the playing field and give everyone the same tax relief enjoyed by employer-provided health plans. Anyone could use the refundable credit to help pay for insurance coverage. Paul Ryan proposed $2,300 for individuals and $5,700 for families.
Workers would then be free to choose the health insurance coverage they prefer, using the credit to help pay for it, rather than being stuck with the insurance chosen for them by their employers. Their policies would be their own property, and therefore would be completely portable, so the worker would not lose health coverage if he changes jobs or becomes unemployed. The credit could be financed on a revenueneutral basis by replacing the Obamacare tax credits for the purchase of health insurance.
Allowing consumers to buy health insurance across state lines would maximize consumer choice and competition, which would further reduce costs. Unnecessary regulations should be repealed. That includes the thousands of state special-interest benefit mandates, guaranteed issue and community rating, and rules that prevent new health providers from entering markets, such as requirements for a “certificate of need.” Tort reform, of course, would also reduce health costs.
PATIENT POWER CAN BE EXTENDED to provide a complete safety net, ensuring that no one will suffer lack of essential health care, for just a small fraction of the cost of Obamacare. Moreover, this can and should be accomplished with no individual mandate or employer mandate. Obamacare, by contrast, for all of its trillions in future taxes and spending, and both its individual and employer mandates, still leaves millions of Americans uninsured.
Conservatives should begin by giving Medicaid block grants back to the states, as we discussed in the June issue. Each state could then tailor its plan. Some might use the money to provide vouchers that the poor could use to purchase private health insurance, liberating them from the Medicaid ghetto.
A second step necessary to ensure a complete safety net is to allow each state to use part of its Medicaid block grant to set up a high-risk pool. Those among the uninsured who become too sick to purchase health insurance in the market, perhaps because they have contracted cancer or heart disease, for example, could receive guaranteed coverage through the high-risk pool. They would be charged a premium for this coverage based on their ability to pay. Federal and state funding would cover remaining costs. Such high-risk pools already exist in more than 30 states, and for the most part they work well at relatively low cost, because few people actually become truly uninsurable.
The law already provides that insurers cannot cut off existing policy holders or impose discriminatory rate increases because people become sick while covered. That would be like a fire insurer cutting off coverage for an already burning house. If this law needs to be modernized, it should be.
With these reforms, those who have insurance can keep it; those who can’t afford it are given the necessary help to buy it; and those who still remain uninsured and then become too sick to buy it have a backup safety net in the high-risk pools. Everyone can be assured that they will get essential health care when they need it—no individual or employer mandate necessary.
Those who have insurance can keep it; those who can’t afford it are given the necessary help to buy it; and those who still remain uninsured and then become too sick to buy it have a backup safety net in the high-risk pools.
Stephen Moore is senior economics writer for the Wall Street Journal. Peter Ferrara is director of entitlement and budget policy for the Heartland Institute and senior fellow at the National Center for Policy Analysis.
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