A Conservative Blueprint for Health Care

Ryan Ellis is the Tax Policy Director at Americans for Tax Reform

The liberals are setting us up for a tax increase, and they’re using health care to do it.  They want to double federal taxes as a percent of the economy from roughly 20% today to 40% over the next half-century.  Most of these new taxes would go toward socialized medicine.

That’s their game plan—what’s ours? 

Let’s start with principles, and move toward policy goals.

Principle 1: Conservative health care reform should neither raise taxes nor increase the size of government.  You’d think this would be a no-brainer, but trust me that it isn’t.

Principle 2: Health insurance should have nothing to do with your job unless you want it to.  In any event, health insurance should be 100% portable.

Principle 3: Shopping for health care should look more like currently shopping for prescription drugs, dental, vision, and cosmetic surgery, and less like going to the hospital or getting a checkup.  The former is price transparent and market-responsive.  The latter is bureaucratic and doesn’t work

So what’s in the conservative package?  Thankfully, someone has already put that together—the Health Care Freedom Coalition (full disclosure—ATR is a charter member).

This is quite literally the free market package of health care reforms.  It doesn’t raise taxes—it cuts them.  It doesn’t grow the size of government—it shrinks it.  It doesn’t curtail the consumer—it liberates him.  If this plan were passed, the size of government wouldn’t just stay at 20% of GDP—it would shrink to 10% over time.

So here’s the question: what do you think of the policy list?  Anything missing?  Anything which should be tossed?  Anything need tweaking?  Unless we get positively engaged in the details of the healthcare debate, the Left (who knows this stuff far better than most of us) will eat our lunch.

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Principle 4

Every american has a basic right to affordable health care

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Health care is not a right but a privilege.

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nailing people who try to game the system

The whole question of mandates vs no mandates comes down to how government deals with the free riders who deliberately forego health nsurance because they know society is not going to let them die or suffer a major disability if they show up at the hospital without insurance.  My answer would be to wait till they do show up, treat them, than calculate what it would have cost them to obtain insurance from the time they turned 18 until the time they went to the hospital and send them a bill for the insurance or hospital costs, whichever is less.  Make them pay!!!! If they lose their home or end up with nothing for retirement except SS- too bad, that is the price for trying to be a freeloader.  After some fairly well publicized cases, the whole mandate question will go away as people voluntarily obtain insurance.

There Are Mandates and There Are Mandates

I want to make sure that people know the distinction between the two types of mandates that are bandied about:

  1. A mandate to be insured.  This is what WoodbridgeVA is referring to.  Newt is for a means-tested individual mandate.  Some are for an employer mandate.  Personally, I'm against forcing people to buy anything
     
  2. Benefit and coverage mandates.  These are requirements state bureaucrats put into state insurance laws which require health plans to cover this or that heart-tugging disease.  An example would be "all health insurance in Minnesota must cover breast cancer treatment from dollar one."  The media goes "ahhh" and pictures kittens, and everyone is happy.  The problem is that every one of these mandates raises the price of health insurance by a bit less than 1%.  Slap on 50-75 of these bad boys and you have yourself a New Jersey.

 

Principle 4 Isn't Conservative

Conservatives believe that rights are a limited thing.  Under no sensible conservative theory of government is health care a "right."  Freedom of worship is a right.  Free speech is a right.  Health care is a consumption item.

Another important factor.

Immigration. Rates of illegal immigration have contributed greatly to the rise of healthcare costs as hospitals cannot turn away aliens for medical treatment. As a result, many medical facilities near the southern border have had to close.

Let's...

Make those illegal immigrants legal by opening up the immigration process. We can encourage them to become legal and active members of our society. Instead, they have to hide now and head to the emergency room when they need care, which drives up the costs of health care.

This Is an Argument for Legal Immigration

If someone is here illegally, they cannot easily sign up for health insurance.  That's why they end up at emergency rooms when they get sick.

The answer is to let people work here legally, and make health insurance coverage a condition of their work visa.  Both problems solved.

But I beg the Fox News/NRO/CPAC conservatives on here: please don't run this health care discussion down the bunny trail of immigrant-hate.  Doing so would detract the post from its intention--health care policy and tactics.

If you want to bash immigrants (because that worked out so well for us in 2006), please do so in another post.

We needn't get into an immigration debate, but....

It is dubious at best to suggest that the GOP lost Congress in 2006 due to party skepticism regarding amnesty comprehensive immigration reform. If anything, the opposite was true. Consider the success of conservative Democrats that year in ordinarily conservative areas of the country. Regardless of where one stands on immigration policy, however, the health care debate remains incomplete without discussion of the topic.

It Does Need to Be Discussed, But...

It's truly sad that some on this forum choose to focus on 5% of the problem just because they can't get over their hangup on another, unrelated policy issue.

If you compare illegal immigrants in emergency rooms to, say, the aging Baby Boomers, it isn't even in the same ballpark.  Yet I'm the first to mention this much bigger problem, while it took about 5 seconds to mention immigrants.

How exactly does one think big when relevant issues are ignored?

Any "big plan" or strategy for conservatives to embrace on health care should be in-line with conservative principles and take into account the many factors which play into high health care costs. Lapsed enforcement of immigration laws is one of many aspects pertaining to this issue.

The Question Is One of Relevance

Yes, immigration law is a factor - but it's an extremely minor one when compared to the issues of taxation, costs, impact on new medical R&D, etc. By focusing on what is only barely relevant to the discussion attention is pulled away from the big problems.

And if you want to talk about looking at the big picture, how about doing the same on immigration. Why just focus on lapsed enforcement rather than the injustice and longterm unsustainability of the laws currently on the books? Once again, your comment is a case of looking at 5% and ignoring everything else.

Let's not

The per unit cost savings of moving undocumenteds from ER care to regular old Medicaid will be swamped by the increased number of people seeking such services  

Strongly disagree

I strongly disagree with you on this point. You're basically accusing every undocumented worker of not being able to find a job that would take them above the poverty line. The only people eligible for medicaid really are the poor.

Opening up the immigration process would allow them to purchase health care upfront because they are legal workers with decent salaries.. Therefore, they will not be driving up the medicaid rolls and costing us more money.

Most Illegals Wouldn't Be Eligible for Medicaid

In order to qualify for Medicaid in most states, you need to be at or below the poverty line.  Most illegals are single and childless, so for them the poverty line is about $9000.

At a minimum wage of $7 per hour, someone working part time would earn $14,000 per year, making him Medicaid-ineligible.

Numerous assumptions in prior posts

That undocumented immigrants are single, childless folks earning well above the poverty line. 

I will also posit one other data point which the open borders people neglect to consider.  Someone whose job skills are limited to physical labor are likely to be unemployable well prior to the new retirement age of 67.  I doubt many will return to a home country that they have not lived in for decades. What social program will be located to address this problem in 15-20 years?   

And What Exactly...

Does this have to do with the discussion about a conservative health care strategy?

If our entire response is, "no Medicaid for Mexicans," then we deserve to lose.  I remember when being a conservative meant we out-thought and out-worked the other side.  Now it's all knee-jerk reactions.

C'mon, people: think.  Engage.  Sink your teeth into a complex policy issue.  We used to do it all the time (remember welfare reform and HSAs?)

Our minds have been dulled by the flashy graphics of Fox News and the "long" issue pieces of NRO, et al.  We need to read books, think critically, and re-enter the public debate.

Let's start with health care.  Re-engage.

Doesn't re-engaging means looking at long term costs?

I posited a serious structural concern with open borders. I think a party that "out-thinks" its opponent can;t ignore this.

Mind you, I jumped into this when I saw an effort to try and use health care reform as the justification for immigration reform. If you don;t want that door opened, don't be the one who turns the key.

Trust me, if we think that having the GOP be painted as favoring more federal benefits for the previously undocumented isn;t going to elect a regiment of Heath Shulers and Don Cayavoux's in red districts, we are not thinking clearly at all.

'Choice' doesn't mean only HSAs

I agree with the principles and the vision outlined in the Health Care Freedom Coalition document, but it’s important that we give people true freedom of choice.  The principle about Health Savings Accounts says HSAs “are the only health plan that allows free choice of doctors and hospitals while providing incentives to reduce health care spending.” But there may be other market innovations and options that people prefer other than HSAs. We shouldn’t lock this in, even though it might be our preferred choice.

-- Grace-Marie Turner, president, Galen Institute www.galen.org  

The Compelling Government Interest Concerning Healthcare

Thanks, Ryan for posting this incredibly important topic and helping to create dialog on the issue in this context.

What I would simply like to add to this is something that I think needs and deserves some equal debate, concerning what IS the compelling government interest concerning healthcare.

First, I think as many Jeffersonian Republicans and Libertarians would agree, the compelling interest in these matters is to prevent substantial and immediate harm--not "potential" harm, and certainly not in the context of supporting a lifestyle preference or a "standard of living," as our Liberal friends in Congress would like to pursue in promoting the social welfare state.

Without question, healthcare is an important topic for everyone concerned. But how and when the state decides to intervene into our private lives should be of utmost concern to every American--Republican, Democrat, or otherwise.

When I hear people talk of "universal healthcare for all," I think about what this type of growth of government [in general] has done for Canada, Quebec in particular. Ask anyone who has thoroughly researched the issue [in Canada] and what you'll find is not only a poorly thought-out healthcare system, but in addition, the promulgation of the social welfare state that goes far beyond merely this issue. That MUST be calculated as part of this equation, like it or not. 

Michael Burns
Chicago, Illinois

 

Health Care

 

I don't know if these observations make the cut in terms of "principles" but I think we should change our premises.
 
I don't see anything in here about small local clinics like some Walmarts and CVSs have been experimenting with.  Basically using PAs (with Physician backup) and simple blood tests etc.  (Naturally the left hates these things)
 
The graphs, necessarily, can not take into account future medical breakthroughs.  Maybe I'm being optimistic, but i think adult stem cell research can massively change our medical system.  Many chronic diseases are very expensive. 
 
Kidney dialysis for one takes a huge share of the Medicare budget relative to the small number of people it services.  This creates real distortions in the payments for dialysis.  Stem cell treatments for diabetes (or kidney failure itself) could have a substantial impact on budgets.
 
A rationing based care model will make medical care totally political, the spoils will go to those in power.  It is stagnant, not dynamic.  In that sense this is much like the left's energy proposals. 
 
Government bureaucrats/politicians are not capable of running these enterprises.  The end-state will be a sclerotic, non-innovative medical care.   Unfortunately, if the US medical care system goes south, the world will suffer.
 

 

Late to the party, but...

...beyond expressing my agreement with some of the above (notably Grace-Marie Turner and stl), I'm less concerned with the broad policy outlines and more worried that I don't see this set of proposals being translated into communications that voters can relate to.

How will this system work for an average family? Or one that's fallen on hard times? In the city or suburbs or rural areas? Where would I go to get care, what can I expect when I get there, and how much will it cost? Will I have a choice?

Most importantly, how will it be better than the something-for-nothing message being delivered by the Left?

If my kid's sick and I haven't got much money or any insurance, do I really want to hear about HSAs?

A completely irrelevant health care policy list.

1.    Conservative health care reform should neither raise taxes nor increase the size of government. 

The issue here is with the precipitous raise in health care costs, not raising taxes, nor increase in the size of government.

2.  Health insurance should have nothing to do with your job unless you want it to.  In any event, health insurance should be 100% portable.

Portable health care insurance is a very good idea that could have and should have been done years ago. As far as controlling costs go, it is largely irrelevant.

3. Shopping for health care should look more like currently shopping for prescription drugs, dental, vision, and cosmetic surgery, and less like going to the hospital or getting a checkup.  The former is price transparent and market-responsive.  The latter is bureaucratic and doesn’t work.

The problem is, health care DOES look like shopping for prescription drugs, dental, vision, and cosmetic surgery...they are all raising at far greater rates than inflation.   The Democrats might, indeed, be after bigger government, but unless the Republican plan can control the rising costs of health care, your list is largely irrelevant.

ex animo

davidfarrar

Changing the pricing power equation

I agree with davidfarrar. Healthcare policy must address the unsustainable growth of healthcare costs. Conservative healthcare policy must devise market means that change the pricing power equation currently driving cost growth.

I don't know anything about healthcare policy, thank god, but the issue is not tax policy or government/gdp targets. The issue is how to unleash market pricing for care (rather than insurance?) that delivers sustainable and affordable quality.

The left might say that the market cannot deliver sustainable and affordable quality care. Conservatives need to show how this can be achieved.

I think the reason goes back to WWII

but one problem is that health insurance is perceived as basically part and parcel of employee compensation. Many people take jobs with less cash compensation in exchange for better benefits. Decoupling the work=insurance paradigm will cause great consternation among people who've already made the trade off, since it is unlikely the employer will turn around and add the value of the insurance to their take-home pay.

I wonder how the mass of collective bargaining agreements are going to be dealt with here. Will bargaining for insurance be banned? How feasible is that?

I know the "health care is a human right" people will oppose any change that isn;t single payer-no rationing (and Weimar-style  inflation). But maybe we ought to look at food and shelter. Those are basic human needs, too. The way these problems are dealt with for those of low income is primarily with subsidy vouchers (food stamps/Section 8) to enable consumers to buy their own food or rent their own apartment. 

Would some form of "health stamps" work better than the various reforms proposed to date?

 

I don't think you are one the right track.

Creating more and more ingenious ways to feed the beast isn't going to make the beast eat less, but demand even more. And even when the money begins to run out (the cost gets too high for most people, corporations, governments, unions, et cetera, to pay for health care) service will increasingly deteriorate, as is the present case with our public school system. 

Structural competition is the only way I know of to control a large, powerful structural monopoly such as our present private health care provider system. The only enity that can provide structural competition to a private sector monopoly is the government. It needs to create a "public" health care provider system that will allow the individual health care customer to choose between the two systems, private or public.

ex animo

davidfarrar

doesn't that exist with food stamps or rent vouchers?

I mean, you have a choice of hundreds of food stores or landlords in the average sized community. isn't that a quantum leap better than building projects or setting up soup kitchens?

The Leftist answer to health care would be akin to having the government buy up Safeway, Krogers, Stop & Shop et al  and create a single supermarket chain stocking only those products it wanted to carry and charging everyone the same price. I think the American public clearly understands why this would be a disasterous way to deliver groceries . Single payer would be the same disaster delivering health care.  

The issue is rising costs, not access.

Speaking in general terms, what I am suggesting -- and some might think it wrong -- is that there a structural monopoly that is the real cause of unjustifiable rises in health-care costs.  As I say, this is a structural issue, not a supply issue. "Structural", meaning the flow of money within a given system. At present there is only one source of health-care providers and that is from the private sector. Even if every, single private health-care provider acts to keep costs down as low as possible, as long as there is only one source of health-care providers, a structural monopoly exist and it WILL do what monopolies always do, increase costs beyond market limits.

To put it simply, I am suggesting that we, as fiscal-conservative Republicans, should recognize that we already have a "single-payer" system and that is the private sector health-care provider system, and that it is time to realize that as fiscal-conservative Republicans, we should act to insure that we have a "dual-payer" system, one public, one private. 

The problem is, the Right, has opted for a single-payer (private health-care provider) system, while the Left demands a single-payer (public health-care provider) system.  What I am suggesting is that we strive for a "dual-payer" system, one private, one public, and let both systems compete for their customers, us.

I would also suggest we have a "dual-payer" health "insurance" system. One that offers either a public health-insurance provider or a private health-care insurance provider. But, again, allowing the customer to choose the health insurance plan they feel will best serve their needs.

In conclusion, my whole approach is to recognize that government does have the right to regulate the market in a marketplace economy, and that sometimes, the only way to regulate a structural issue within the marketplace is to change the structure itself. I feel that within the health-care industry, that time has come. In fact, it has come and gone, which is why this issue has been gaining strength with the Left.

ex animo

davidfarrar 

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