Healthcare Reform

On September 25th of this year, Senator Chuck Schumer, a member of the Senate Finance Committee, stated in reference to recent Democrat healthcare efforts: “The first week showed Democrats laying out a plan to achieve better health care for American families while Republicans tried to score political points that will do nothing to make the average American’s life better. Republicans have no plan of their own.”

Is there really not a Republican plan for healthcare reform in America? Many within the realm of liberal politics repeat this line in every cable interview and blog entry. The Democrats in Congress would lead Americans to believe that the only option other than Obama’s “plan” is that of doing nothing. Republicans are said to be fighting for “the status quo” as opposed to any other health plan. But is this really the case?

Currently, Democrats have control of the White House, 59 seats in the Senate (including the Independents who vote with the Democrats), and almost 60% of the seats in the House of Representatives. One of the main reasons that only Democrat proposals are getting coverage is that only Democrat proposals have any chance of passing. Republicans don’t even have enough votes or sway to get bills out of committee, much less voted on or signed in by the President. This does not mean that conservative ideas do not exist for healthcare reform.

To understand solutions, one must first understand the problem. Democrats attempt to direct America to believe that American healthcare is below standards of countries with government-run systems. In actuality, Americans have the best quality of care in the world. That is why people in need of urgent treatment come to America from countries like Britain and Canada, which both have socialized medicine. Democrats also claim that the lack of health insurance equals a lack of healthcare access. This ignores the fact that many people choose not to purchase insurance and instead pay for treatment as needed. We also have laws that force emergency rooms to give life-saving care to anyone who enters, regardless of their insurance situation.

The true issue with America’s healthcare system today is that the consumer is not involved enough in the loop of price, which means there is very little opportunity for competition to impact the market. Competition is the mechanism that lowers costs in a free-market system. The compounding side effect of this problem is the rising costs of healthcare on every front, which is the actual problem of American healthcare today. Presented below is a list of conservative ideas to improve our current healthcare situation by lowering costs:

1. Make insurance available across state lines

As mentioned earlier, competition is the tool within the free market that lowers costs by forcing producers to fight for the dollars of consumers. Currently, Americans can only buy health insurance within their state. This leads to monopolization within states. Obama’s response to this problem is to include a government-run “public option.” Since the public option would not have to compete within the market, this would do nothing to lower prices in the market. A true option to increasing competition is to abolish laws that force individuals to purchase insurance within their state. This would open up an abundance of options for consumers, increasing competition and lowering prices. Another benefit is that insurance companies would be able to make national-scale plans, not tailored to any specific state. This would lower the costs for insurance companies, which would then be passed on to consumers.

2. Allow individuals and small businesses to form “health-insurance groups”

One major advantage that companies have in purchasing insurance for employees is that they get group rates. Just like how a single roll of toilet paper costs more per unit than toilet paper in bulk, individual and small-business health insurance costs more per person than insurance purchased by a huge company. The advantage comes in the quantity of insurance that is purchased by larger companies. Currently, there is no way to simulate that quantity in order to get cheaper policies. If individuals, families, small businesses, or even communities could all pitch in and buy a group policy, they would be able to obtain that group rate to which large companies now have exclusive access. This would lower costs per person and increase access to affordable health insurance.

3. Low-income tax credits

One side effect of the rising costs of health insurance (caused by the rising costs of healthcare in general) is that certain low-income individuals make too much money to qualify for Medicaid (health-insurance for the poor), but they make too little money to purchase an individual insurance plan. One option that the government can take is offering a tax credit of some moderate dollar value ($3K to $10K) to low-income individuals. This tax credit MUST be put toward healthcare costs, or it would be lost. One method of portability for this tax credit is the option of putting the money onto a debit card that can only be used for approved healthcare costs. The benefit of these options is that people would have a limited amount of money and would be forced to try to stretch their dollar, thus increasing competition. This also would allow low-income families to pay for some of their healthcare if it goes over the tax credit limit, thus giving the consumer more impact on the demand side of the market.

4. Health-savings accounts

If a tax credit is put onto a debit card, it could essentially be considered a type of health-savings account. This concept originated as a way to allow individuals or families to save money specifically for healthcare costs so that the costs don’t have to be paid directly out-of-pocket every time. There are several options for how these savings accounts would be implemented. Individuals could opt into one of these plans, either through their employer or on their own, to take a certain amount out of each paycheck to put into the account. Employers could also provide one of these accounts as an alternative to traditional health insurance. The benefit of this idea is that people would end up paying for most health treatments without having to rely on insurance. If insurance stops being used as “unlimited healthcare” and becomes what it was originally intended to be, coverage against catastrophic costs ONLY, then costs will drop substantially.

5. Tort Reform

Some people refer to our time as the “Age of Litigation” in America. People sue everyone for everything, and doctors are a prime target for expensive malpractice lawsuits. Even if a doctor ends up winning in a malpractice tort, they still have to deal with the enormous cost to cover the lawsuit. To help protect them from these type of costs, doctors have to purchase malpractice insurance. While it isn’t as expensive as the multi-million dollar lawsuits they may encounter, malpractice insurance costs tens of thousands of dollars annually to buy this insurance. To help fix this problem, it needs to be more difficult for people to sue their doctors. This is the basic idea behind tort reform.

One option to implement this is to change the way doctors are judged. If a special court of medical personnel oversees the malpractice lawsuit, they would be better able to decide whether the doctor is at fault. Another option is to limit the amount of money that a tort could seek against a doctor for malpractice, which would help with insurance against the multi-million dollar torts. A third option is to allow doctors to recover lawsuit money from people who unsuccessfully sue them. This would save doctors money and reduce the amount of malpractice lawsuits. These options would lower costs by lowering malpractice significantly over time. Doctors would also be less likely to do extra tests just to cover their butts, thus allowing patients to save money on unnecessary treatment.