The battle over health care reform has taken to the streets as Congress goes on August recess, and we’ve already seen reports of some nastiness at townhall meetings. Bipartisanship remains in short supply, which is unfortunate for those of us whose views can only be enacted by drawing on the best that both sides have to offer. In reviewing my previous comments on this subject, I realized I hadn’t devoted an entire column to offering a complete health care reform proposal, as opposed to just commenting on individual component parts as they came up. So with the decisive month at hand, I’m going to lay out my own agenda for health care refor, what might be immodestly called "the Flaherty Agenda."
I would build reform around two key pillars, one from each party. The market for health care coverage must shift away from the employer-based system we currently have and into something similar to the market for auto insurance. People should own their own insurance and have the flexibility that comes with that. Along with this, the government should guarantee that everyone is included into the health care system.
This would start off by changing the tax code to make individual ownership of health insurance more realistic. People should be allowed to write off their premiums. They should be able to establish tax-free savings accounts to put money for health care expenses. One of the great innovations of George W. Bush, this would enable people to purchase high-deductible plans and set aside the money they save on premiums into a Medical Savings Accounts. The money might be needed to pay for the deductible, but could also be used toward home ownership, education, or any other worthwhile goal. You would still have the security of insurance coverage, but through a little creativity, you make sure the dollars spent don’t go down into the bottomless pit of the insurance industry.
Individual ownership of health care would also be the stimulus for controlling health care costs. The single biggest factor in exploding costs is that consumers, myself included, are not cost-conscious in shopping. We know what our co-pay is because that’s the only expense seen, but have no idea what expenses are being tacked on after that. But if the money to pay for those routine office visits is coming out of a Medical Savings Account, there’s incentive to shop for the best deal. And there’s incentive for physicians to make sure their own fees stay competitive.
With freedom comes responsibility though, and just like with auto insurance, individuals should be mandated to own coverage. Running to the emergency room for non-emergency reasons is incredibly inefficient from a financial sense. And when hospitals have to collect unpaid bills, the expenses are passed on to the rest of us. The most efficient way of paying for health care is through insurance, via a normal process. For the most part I share the view that citizens shouldn’t be forced to buy something they don’t want, even if it’s good for them. But health insurance is different. The odds are that somewhere along the line you’ll need it, and the reality is that Americans are not going to let someone die untreated, simply because they made an irresponsible decision. Again, the analogy to auto insurance applies—you may not want it, but you’re required to have it. Because if you suddenly need it and it’s not there, someone else ends up paying the bill. Owning a health insurance plan is a part of being in civil society. The mandate is also a vital part of keeping costs down, by making sure the healthy stay in insurance pools with those more susceptible to illness, lest the latter see their rates skyrocket.
Ninety percent of what I’ve written—with the notable exception of the last item—is straight out of the GOP playbook. Now we take the next step. If we are going to require health insurance ownership, the government needs to help out those who might not be able to afford it. The current means-based system, built around Medicaid is the answer. Anyone who can demonstrate need would be put on a government plan. While the public plan need not be lavish, it should also not be bare-bones. A single mom trying to get her life in order should have prenatal visits covered. A recovering alcoholic, still with a bad liver from a previous life, should get the care they need. Holding people accountable for bad decisions is one thing, but it goes too far to impose what amounts to a sentence of dying slowly, by denying them the normal health care measures available to everyone else.
Society’s generosity in this regard should not be taken advantage of. An alcoholic who won’t go into treatment needs to be denied public help. A single mom who’s on drugs and won’t get clean should be denied (though her kids should not). In this case, it’s not society shutting them out, it’s them refusing to accept the helping hand up being offered. The examples thrown out could be endless, but I think the general point is clear. Help people out, but not if they won’t help themselves.
This proposed combination of individual ownership coupled with a government guarantee is squarely bipartisan, but I should note that as proposals go through Congress, the practicality of working out compromise solutions tends to leave me siding with Republicans. Here’s the reason: if you could only enact half of what I’ve proposed, it would be infinitely better to do only the individual ownership components, rather than only the public components. Skyrocketing costs are the single biggest problem in getting everyone covered, and enacting this GOP-friendly part of the program would establish the market as a mechanism for controlling expenses. This in turn makes it possible for private charities to cover more than they do currently. While I don’t share the view of my conservative friends that private charity can do it all, this landscape would certainly be an improvement on the current situation. You couldn’t do the mandate of ownership (without the guarantee of government backup that becomes inhumane), but that only makes everything more appealing to Republican eyes.
Whereas if you go the reverse route and enact only the Democratic guarantees, you have everything in place for costs to go through the roof—consumers are still hidden from the ultimate costs and with the government picking up the tab, there’s even less incentive for medical providers to keep their fees under control. It sets up a potential disaster scenario of rationed care, something that would be no less than a moral and societal catastrophe.
With Barack Obama in the White House, Nancy Pelosi running the House and the Senate run by 60 Democrats, it’s the latter scenario that’s unfolding. This is why, even though there are some good component parts to the bills proposed, I want to see them defeated. Better to come back to the drawing board when politicians and voters are serious about a bipartisan solution. Because right now, that’s so much empty rhetoric.