Healthcare Reform

Our healthcare system is fragmented and costly. We need to adopt a sustainable consumer-based system responsive to the diverse needs of patients, but this requires looking beyond today’s partisan politics.

We need to end laws that restrict the availability of doctors, end tax subsidies that favor employer based insurance, adopt an insurance voucher based program for people who cannot afford to purchase healthcare on their own, develop more responsive healthcare delivery systems that cover preexisting conditions, and allow more consumer choice in order to improve quality and allow lower costs.

 

(1) One approach that deserves to be considered for universal health insurance coverage would be a system of health insurance vouchers, where everyone would have healthcare insurance, because people who can’t afford it by themselves would receive a health insurance voucher, so that they can then choose their own health insurance, and pre-existing conditions would also be covered.

That kind of approach would have some similarity to the Netherlands system. It can also include using the health insurance voucher for non-profit health insurance organizations.

Allowing those choices is a better alternative than a single-payer, government-run monopoly – a compulsory monopoly is never the best system. In fact, few countries actually have a national single-payer system.

Among the countries that have a single-payer system, they tend to have it at a more local level, similar to the state level in the U.S. And among the few countries which have had a single-payer system at the national level, England has taken some steps away from a single-payer system, such as by allowing people to pay a doctor separately if they don’t want such a long wait. Canada has also been considering some similar steps.

A health insurance voucher system could be introduced by Congress, or any state or group of states could adopt it – for example, states could cooperate to form a regional or national-level system of that kind even if Congress didn’t act.

In order to facilitate the adoption of a health insurance voucher system, we need to end special tax subsidies for employer based health insurance. Employer based health insurance limits consumer choice because it anchors a person to the job they currently have, and also limits a person to the insurance choices offered by that company, rather than having portable health insurance.

Eliminating employer based health insurance programs may be equivalent to giving workers a pay raise without new regulations because a consumer based system can foster more competition as insurance providers work to keep their customers by providing high quality care that meets the needs of the patients who are directly paying for such services.

With the resulting lower costs, governments would not need to find additional revenue sources for healthcare expenditures if employer based subsidies were phased out in favor of health insurance vouchers.

States need to reform laws to make it easier for doctors to introduce innovative approaches if they wish, such as, for example, to form direct primary care models whereby patients pay a flat monthly subscription fee for a specified set of services. This type of model may reduce the strain on hospitals while giving patients the right to purchase the best type of healthcare that meets their needs.

 

(2) Politicians and the major media continue to promote the false choice that the only way to fund universal healthcare is by taxing labor, production, or sales – but any kind of tax that falls on labor, production, or sales raises the cost of products and services, hinders job creation, causes unemployment, and further contributes to poverty.

Instead, for funding universal healthcare, the only tax that does not hinder job creation or raise costs is a tax on the location value of land, because no person produced any locations, so it is the only kind of tax that does not punish job creation or raise the cost of products and services.

That approach actually leads to more job creation and more affordable housing, products, and services, because it puts a limit on land speculation and land hoarding, so it makes land much more affordable, for job creation, housing, etc. With lower taxes on products and services, that will further lower the cost of physician services and drugs, as would the other reforms described in this essay.

 

(3) As a further alternative to a monopoly or cartel over health insurance, allow people to have the choice of buying affordable health insurance across state lines, as long as there are some uniform basic standards.

That could include non-profit health insurance organizations. Currently, state laws forbid people from buying insurance from other states, even if the other insurance meets the same standards. Those laws raise the cost of health insurance. Instead, allow consumers to buy health insurance from other states, as long as the other insurance meets the same basic standards as insurance offered in their own state.

States could save money by promoting the individual health insurance marketplace through the adoption of policies that make it easier for consumers to select an insurance plan that is transferable from job to job.

States can collaborate to set minimum standards that would make it easier for those who relocate to keep their insurance or transfer their policies to a new provider that meets the same standards in the consumer’s previous state of residence at the same or lower monthly premium.

Additionally, the cost of drugs can be reduced if patients were allowed to purchase drugs from some other countries, such as Canada.

Managing chronic health problems through preventative care and consistent application of state standards would lead to a healthier workforce.

 

(4) Another reform that is needed is to change the laws that currently place arbitrary, artificial limits on the availability of doctors and paramedics, which raises the cost of medical care. For example, current government laws allow the American Medical Association to arbitrarily limit the number of medical students, regardless of the number of excellent students who wish to be trained as doctors. With an artificially lower number of doctors available, that raises he price of doctors.

Another example is that in most states dental hygienists have not been allowed to have their own offices, so they can only work within dentists’ offices, which raises the cost to patients. Some states have reformed those laws, and other states need to do so.

Those four reforms would offer an alternative to the false choice between a state government-created health insurance cartel, and a single-payer government-run monopoly over health insurance. The four reforms would allow lower costs for medical services and drugs, and provide universal healthcare.

Any meaningful approach to healthcare reform needs to go beyond the false choice between left and right.

Rebecca Skipper

 

Each policy essay is based on an interpretation of a way to apply the DFC Principles. Except where indicated by the author’s name, the policy essays are written by representatives of the Democratic Freedom Caucus

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