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Monday, May 17, 2010

A Free Market Health Care Solution

A Free Market Health Care Solution

Presuming we witness a tsunami in November that brings in a large majority of men and women to Congress who believe in limited Constitutional government, how should they address the health care issue? 

Is there a free market solution that benefits consumers with lower cost and higher quality health care, while at the same time eliminates wasteful government and health insurance bureaucracy?  Yes, I believe there is such a solution, and more than that, a solution which will empower the consumer, encourage more young people to become health care professionals, reduce the size and scope of government, take care of the poor, and save Medicare.  Is that really possible?  Is there is a market place solution that will, unlike the Obamacare’s path to socialized medicine, improve medical care for all?  Yes, I believe there is, and the solution is not complex, nor will it take more than 1,000 pages and tens of thousands of bureaucrats to administer it.  It works like this—

1.  Step 1.  Every American would be entitled to an annual $7,500 tax credit above a $500 deductible amount to spend on his or her health care needs.  In other words, you would deduct all amounts spent annually on your health care needs above $500, up to a total of $7,500, directly from your income taxes (not taxable income).  There’s no magic in the $500 deductible amount or the size of the tax credit.  These could be modified and still have a similar impact.  All medical expenses above $7,500 could easily and inexpensively be covered by purchasing a catastrophic insurance policy, the cost of which should be deductible from your taxable income.  Just remember, each American would be able to deduct their own medical expenses directly from their own taxes up to a fixed amount.

2.  Step 2.  Those American citizens who have no income would receive medical and hospital coverage from health care pools operated by nonprofit organizations.  Contributions into such designated nonprofit groups (both secular and religious) would be deductible (from taxable income) at an annually adjustable rate of $1.00 or more.  The annual rate would be adjusted to make certain that the medical care pools have sufficient funds to cover all individuals.  In other words, a contribution into such a pool might be $1.50 or even $2.00 for every dollar contributed into such a pool, thus incentivizing donations to the pools and assuring that sufficient funds would be available to cover all American citizens.

3.  Step 3.  Outlaw and eliminate all punitive damages for medical care both by the doctor and by your hospital.

What would be the impact of this three step process on doctors, hospitals, medical research, consumers and uninsured, unemployed American citizens?

1.  Doctors.  Today doctors are burdened by a vast amount of paperwork required by both the government for Medicare and by insurance companies for corporate and individual plans.  On top of that your doctor may be paying $100,000 or more per year for malpractice insurance.  Of course, that cost is passed along to you in the form of higher insurance premiums.  The elimination of punitive damages for health care providers (both doctors and hospitals) would immediately and dramatically lower the cost of health care.  But far more important, the elimination of the need for any health care insurance under $8,000 ($500 deductible plus $7,500 tax credit) would get rid of all the paperwork and bureaucracy that doctors face, which has nothing whatsoever to do with your health care.  You would be paying by credit card, cash, or check for your medical services up to $8,000 per year.  Doctors could focus exclusively on being the very best at what they love and were educated for, providing top flight health care service.  They would benefit in handling their Medicare patients too, as I will shortly explain.

2.  Hospitals.  Free from punitive damage suits, hospitals too would be much less costly.  This would directly impact the quality of their service and the cost of catastrophic health care insurance, which would decrease.

3.  Medical Research.  This is something very near and dear to my heart since my wife has Multiple Sclerosis.  Today the United States drives health care research worldwide, providing hope to millions suffering with all sorts of currently incurable diseases.  With the rationing of healthcare that is an integral part of all government-run health care programs, Obamacare included, medical research is always one of the first casualties.  In a very short period, all health care research comes to a screeching halt.  That’s why the world depends on the United States to fund all advances in health care.  Of course, when we fund research that is successful, they take advantages of such advances, but their socialistic system provides no incentives whatsoever for such advances.  By strengthening our health care system through tort reform (the elimination of punitive damages) and the elimination of costly and unproductive government and insurance red tape, the United States will continue to develop cures for diseases that burden men, women and children around the globe.

4.  Consumers.  You and I and every American would reap the greatest benefit from a free market, non-government, limited insurance approach to health care.  You, not your company or the government, would be in charge of your health care.  Your health care would be your responsibility and you would not be dependent on your employer’s selection of coverage.  With the elimination of punitive damages, the cost of health care would decline.  For both those still working and those retired, the quality of health care would improve.  No more arguing with insurance companies or Medicare bureaucrats over coverage.  No more refusals by doctors of Medicare patients (for those who decide to opt-out of Medicare coverage up to $8,000).  That’s right, many, if not most, who are currently covered by Medicare may well opt-out of Medicare because of the advantage to them of deducting their health care costs directly from their taxes.  Seniors who choose to opt-out would receive better, less-regulated, health care service, and those who choose not to opt-out could rest assured that Medicare would not go bankrupt.  All seniors could either rely on Medicare for catastrophic needs only or choose to pay for a catastrophic insurance policy.  This program would save Medicare which is currently on the road to insolvency.  The more seniors opt-out of Medicare, the lower the total cost of Medicare, and the smaller government can shrink.  And that too is a benefit to consumers—smaller government, less bureaucracy.  With this free market approach there would be no need for government bureaucrats to decide who gets health coverage and who doesn’t.  There would be no shortage of doctors, nurses and hospital beds.  In short, there would be no need for government rationing of health care services that is always part and parcel of any government controlled health care program.  There is not one exception to this practice under socialized medicine in any nation in the world and there is absolutely no reason to believe that Obamacare would lead to anything different.

5.  Uninsured, Unemployed American Citizens.  While individuals should be responsible for their own lives, including health care, some make bad decisions and others suffer unanticipated calamities.  The Lord tells us that “the poor will always be with us” and that we should have compassion on them.  There are many instances in the Bible of collections being taken up and efforts being made to assist the poor.  By taking government out of the equation and making private, religious and secular nonprofit charities directly responsible for providing health care coverage, many, many good things will be accomplished.  The person in need will no longer just be another number processed by a bureaucrat, but will instead have their life touched by a caring, compassionate human being.  In the process both will be lifted up morally and spiritually.  The Church that initiated the development of health care and institutions to care for the poor will be encouraged to once again assume the responsibility for caring for the soul and the health of those in need.  Of course, the opportunity to generate large sums of charitable gifts would also incentivize non-religious groups to reach out to help those in need.  Nonprofit hospitals could solicit contributions to cover the cost of health care services for the poor and for-profit hospitals could establish tax-exempt foundations that could receive gifts to cover uninsured, unemployed US citizens.

Would this be a perfect solution to America’s health care needs?  There is no utopia on this earth.  As I have said repeatedly, those who try to create utopia always create nightmares and they have names like Hitler, Stalin, and Mao.  Of course what I propose would not be a perfect system, but it would be many, many times better than any form of socialized medicine including Obamacare.  Socialized medicine always translates to:

1.  Less medical research
2.  A rationing of health care services
3.  A shortage of health care professionals
4.  A shortage of hospital beds
5.  Worse medical coverage
6.  Skyrocketing health care costs that would add to the already dangerous financial predicament in which the US finds itself today
7.  Not everyone receiving quality health care
8.  More government control over our lives

In stark contrast, the free market health care program I propose would:

1.  Expand medical research and hasten the discovery of cures for some of our worst diseases
2.  Dramatically reduce the cost of health care services
3.  Encourage talented young people to enter the field of health care services
4.  Free doctors from bureaucracy to focus on taking care of your heath
5.  Put you in control of your health care, not your employer, not an insurance company, and not the government
6.  Reduce the cost of doctor and hospital services
7.  Encourage better decisions in health care
8.  Provide health care to every uninsured, unemployed American citizen
9.  Shrink government and insurance company control over your life  and mine
10.  Save Medicare and improve the quality of medical services for 
 senior citizens
11.   Receive strong support from a vast majority of American citizens

There would be some losers—

1.  Politicians, Bureaucrats and Union Bosses.  They would not succeed in gaining more control over your life, especially the quality of your medical care.

2.  Insurance Companies.   Their revenues would shrink in size because there would be no need for anything but catastrophic medical coverage insurance.  They too would have less control over your life.

3.  Trial Lawyers.   Ambulance chasing would no longer be profitable and therefore they would no longer become rich from punitive damage lawsuits.  Instead those dollars would go back in your pocket as the resultant medical and hospital fees decline.

So let’s do it.  Let’s throw out the bums—Republican RINOs and Democrats, take back our country, and start rolling back socialism—the enemy of all free people.

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