Jay Reding.com

Winning On Health Care

Karl Rove has an interesting piece in The Wall Street Journal on how Republicans can offer a compelling solution to the nation’s healthcare woes. His solution is to put more control in the hands of consumers through Healthcare Savings Accounts combined with low-cost catastrophic insurance that is portable from job to job.

It’s the right plan for American workers. The current system is completely idiotic — there’s no good reason why health benefits should be tied to your employer. It hurts small businesses, the unemployed, and drives up the cost of healthcare for everyone. The first step in restoring sanity to the nation’s healthcare system is to decouple heath benefits from employment. Employers don’t buy food, they don’t buy transportation, and we wouldn’t expect to live in corporate-owned housing. The healthcare system in America is a throwback to the days of the company store, and that needs to change.

The Hillarycare solution is the same solution that’s failing in Canada and Britain. Because we have a larger, more diverse population, the rate of failure in the United States would be even faster. The inevitable result of a socialized single-payer system is the rationing of health care, the loss of consumer choice, and a system that costs more and more money. There is no such thing as “free” health care — and like anything else, the more intermediaries that exist between payor and payee, the higher the cost.

Mr. Rove is correct: what we need is a system that offers people choices. A combination of MSAs and tax benefits can cover the small stuff — routine doctor’s visits, preventative healthcare, and other minor medical issues. For catastrophic coverage, programs like AFLAC already provide low-cost catastrophic care insurance. Allowing for better risk pooling will keep those premiums low and ensure that Americans can be protected from more serious issues. The more control people have over healthcare, the more options they have and the more incentives the system has for keeping the quality high and the costs low.

We have a competitive marketplace for life insurance, for annuities, for car insurance, and for just about everything else. The cost of those products hasn’t seen the sort of dramatic inflation that healthcare has. The reason why healthcare in this country is so expensive isn’t because we have a free-market system, it’s because we don’t have a free-market system.

The GOP has to stake their claim on this issue. The principles of a sane free-market system are the best principles for America. We can ensure that every American has access to affordable and quality healthcare without creating yet another stifling bureaucracy. In fact, that’s the only way that Americans can get access to quality, affordable healthcare. However, the GOP will lose unless they’re willing to put up a fight against the special interests who want to keep the current system in place. The pro-worker side lost the Social Security fight specifically because they never bothered to counter the inaccurate and misinformed attacks being thrown out by the side wanting to keep the statist status quo.

When conservatives stand on their principles, they tend to win. When conservatives run away from their principles, they tend to lose. America needs leadership willing to stand up for the right principles. If the current crop of GOP candidates are unwilling to do so, we could end up with a socialized system of healthcare that will result in thousands of needless deaths and a healthcare system that will end up like the collapsing Canadian and British systems — except we’ll get their faster and with more devastation in our wake. The American people deserve better than that, and if the GOP leaves the field to the advocates of socialized medicine, they’ll have betrayed both their principles and their constituents.

11 responses to “Winning On Health Care”

  1. Karl Rove on Health Care Reform…

    In today’s WSJ, the Prince of Darkness has an editorial that will no doubt produce spittle-flecked monitors throughout the wackosphere. He correctly avers that health care reform is a winning issue for Republicans, if they are willing to be bold:
    T…

  2. Mark says:

    New rule: every free market ideologue diagnosing health care savings accounts as the cure-all to the American health care system has to forfeit their own health care plan in favor of an HSA. Wonder how many takers we’ll find. I wonder if Karl Rove would give up his sweetheart government health insurance for the same HSA available to Wal-Mart clerks.

    Saying that HSA’s are the solution to the crippled American health care system is tantamount to saying the solution to our traffic problem is to turn every road into a toll road. Pay to play….and he who pays most monopolizes access. Let’s privatize fire departments while we’re at it too, forcing lower-income residents to finance their own fire protection services under the guise of “offering people choices”.

    This isn’t 1993 anymore. The same old mindless “ownership society” propaganda isn’t working the way it used to. I hope Rove continues to counsel Republicans to run on HSA’s and similar pay-to-play fire protection services. After all, Rove really hit the nail on the head when advising George Bush to spend all his “political capital” on privatizing Social Security….the latest fine example of Republicans “running on principle” and finding out the American people only voted for them because they hate gays.

  3. Jay Reding says:

    Saying that HSA’s are the solution to the crippled American health care system is tantamount to saying the solution to our traffic problem is to turn every road into a toll road. Pay to play….and he who pays most monopolizes access.

    That analogy is so tortured I’m tempted to sic Amnesty International on you.

    The health care system in America is already “pay to play.” Other than emergency room care, which has to be provided to all comers by federal law, you still have to pay for health care. In fact, in socialized systems you still have to pay for health care, the difference being that you pay the government which then pays for you. The problem with that arrangement is that the government controls the access.

    There’s no monopoly problem because nobody’s fixing the amount of healthcare. You can only have a monopoly if there’s a fixed pie. There’s not a single product or service in the real world that works in the way you described. The government doesn’t provide healthcare right now, except under specific circumstances. There’s no “pay to play” in here at all — in fact, there’s less of that because it gives incentives to lower costs and make healthcare more competitive.

    I wonder if Karl Rove would give up his sweetheart government health insurance for the same HSA available to Wal-Mart clerks.

    Actually, the way the plan works is that it’s giving the same kind of healthcare plan that a former government employee like Mr. Rove enjoys and letting the clerks at Wal-Mart have a similar system.

    Your argument is just silly. It doesn’t even make sense. You might as well say that if we passed a plan like this we’d all be eaten by dragons. The reality is that this plan is fundamentally democratic — your health care benefits are no longer tied to your employment situation, your employer can no longer take all your unused healthcare dollars, and you can choose whatever plan you like.

    It’s simple: HSAs empower working Americans at the expense of government. Apparently radical statist ideologues like yourself just can’t stand that idea, which is why you seem to so consistently stand against the American worker and on the side of more and more Big Government.

  4. Aaron B says:

    The problem, with HSA’s and FSA’s is that they still require individuals to actually have the money in order to save the money. If you were to tell me that to have a family health plan comparable to the one I get through my employer today would cost me even $5000, it still means I need to have that money to set aside which I dont. we first need to do several things. One, make electronic records and databases system standrad fair for all healthcare providers and institutions of all kinds. The Brookings institute has said this woudl save the healthcare industry and the economy billions of dollars. Second make health and physical education mandatory from Kindergarten through HS graduation. if we know more about nutrition and health from choldhood we are better prepared and educated to take care of and responsibility for our own health. Eliminate long term patents on drugs thereby reducing the high costs to consumers for drugs with no generic….limit malpractice and liability suits by instituting maximum award limits. Malpractice costs go along way towards increasing healthcare costs.

    Doing all the above will save the economy billions and lower insurance costs. Next offer both HSA and FSA accounts as well as offering substantial tax credits and deductions. Ive already paid over $16000 in Federal income tax this year…you mean to tell me that the federal government does not have enough taxpayer money that it cannot afford to provide some sizeable credit to each of us which we could in turn use for health care premiums….we waster billions on pork alone, the money is there. I am not suggesting the fed foot the bill, what I am saying is that if the government told me that $4000 of my $16000 already paid or say roughly 25 percent of my tax bill was being credited back to me but had to be used to purchase a health care plan, the country could not afford it? of course we can….the government can fix this tomorrow if they chose to…..problem is they dont want to….

  5. Eracus says:

    The Democrat Party doesn’t want to allow anyone to address their own healthcare and insurance needs. They want us all to go down to the new Federal Healthcare and Insurance complex, sign up for our “free” Federal health insurance, pay the license, registration, and administrative fees, and pick up our little chip-embedded ID card just as we do when we renew our automobile registration and license tabs. Since everyone must do this, everyone is equal and will receive equal healthcare at equal expense. Now, that’s fair, isn’t it? Of course it is. We’re all equal. We’re all the same. Didn’t you get the memo?

    Since the government will fix the price for healthcare for all patients, there won’t be any more rising costs. And since doctors won’t have any special profit motive anymore, we can do away with expensive medical schools and outlaw private practice. This way, the nice fella taking out your appendix will have the same salary as the nice fella who drove the ambulance, and both will be as equally qualified to provide the healthcare the Federal government has determined is fair and equal for your treatment. And since only the rich will pay for all the healthcare we need, you don’t have to worry about the cost. It’s all FREE!! Just look how well this system worked in the Soviet Union! And Cuba!! And North Korea!! Not to mention what a swell result socialism has produced in the American public school system and the automobile and airline industries.

    You can’t beat success like that!

  6. Mark says:

    There’s not a dime’s worth of difference between health savings accounts and no health care coverage at all. People too poor to afford health insurance now are not going to be able to invest enough in their HSA accounts to finance even the smallest maladies. If I’m living paycheck to paycheck as most uninsured Americans are, the nickels and dimes I’m gonna be able to invest in my HSA are not even gonna be sufficient to send my kid in for treatment of his strep throat before the HSA is bankrupted. Health care coverage has to come in the form of insurance, not whatever can be scrounged from a poor person’s piggy bank.

    All of the rising costs associated with the health care system will continue rising if your HSA fantasy comes to fruition. If I’m a Wal-Mart employee with $350 in my HSA, I’m just as unlikely to seek immediate help for that nagging cough of mine as I would if I had no insurance at all. It’s a recipe for dangerously defensive health care treatment and, if accompanied with “low-cost catastrophic insurance”, would hyperinflate the number of people who fail to get preventative health care treatment and thus defer their costs onto “catastrophic insurance.”

    Republicans want the perfect solution of appeasing their business peeps with a “get-out-of-health-insurance free” card and a vacuum of government health care alternatives. The HSA solution they propose is, for all intents and purposes, taking away health care coverage from nearly every American, as a culture already wallowing in debt will not be sufficiently capable of financing its own lifetime health care needs. I really hope Karl and his ilk push as hard on this as they did privatizing Social Security though. For a guy who supposedly has his finger on the pulse of the peasantry, he sure isn’t reading the tea leaves very the way he used to.

  7. Jay Reding says:

    There’s not a dime’s worth of difference between health savings accounts and no health care coverage at all. People too poor to afford health insurance now are not going to be able to invest enough in their HSA accounts to finance even the smallest maladies. If I’m living paycheck to paycheck as most uninsured Americans are, the nickels and dimes I’m gonna be able to invest in my HSA are not even gonna be sufficient to send my kid in for treatment of his strep throat before the HSA is bankrupted. Health care coverage has to come in the form of insurance, not whatever can be scrounged from a poor person’s piggy bank.

    That’s why you finance the HSA with mandatory pre-tax payroll deductions. People don’t save, and the only way to make the system work is to make sure that the money is put into the HSA and only can be used for legitimate medical expenses.

    I even think that Aaron’s suggestion isn’t a bad one: have there be an additional tax credit that goes right back into your HSA.

    The HSA isn’t designed to cover for catastrophic illnesses, which is why you have a catastrophic insurance system that goes on with it — something like AFLAC already offers at very low premiums. You pay a small premium every month — a few bucks or so, and that goes into a national risk pool that provides catastrophic care coverage.

    All of the rising costs associated with the health care system will continue rising if your HSA fantasy comes to fruition. If I’m a Wal-Mart employee with $350 in my HSA, I’m just as unlikely to seek immediate help for that nagging cough of mine as I would if I had no insurance at all. It’s a recipe for dangerously defensive health care treatment and, if accompanied with “low-cost catastrophic insurance”, would hyperinflate the number of people who fail to get preventative health care treatment and thus defer their costs onto “catastrophic insurance.”

    Why wouldn’t you? You have that money in the bank. Already Wal-Mart offers $45 walk-in clinics in several of its stores — Target is doing something similar. You go in, get tested, get your prescription, and you’re done. That $350 is more than enough to cover those costs. For someone living paycheck to paycheck, having $350 you can spend on healthcare is exactly what you need, especially if it’s matched with a more competitive environment for services. Granted, you still have to have catastrophic care insurance for people who need it, but we only need to solve one problem to improve the system. If we can get a system where the minimum wage worker has enough in their MSA to get an annual physical and not have to go to the emergency room for things that could be treated at a walk-in clinic, we save billions of dollars in costs.

    Republicans want the perfect solution of appeasing their business peeps with a “get-out-of-health-insurance free” card and a vacuum of government health care alternatives. The HSA solution they propose is, for all intents and purposes, taking away health care coverage from nearly every American, as a culture already wallowing in debt will not be sufficiently capable of financing its own lifetime health care needs. I really hope Karl and his ilk push as hard on this as they did privatizing Social Security though. For a guy who supposedly has his finger on the pulse of the peasantry, he sure isn’t reading the tea leaves very the way he used to.

    Again, you keep making silly arguments that don’t have anything to do with the actual program.

    – Everyone gets an MSA.
    – That MSA is funded by mandatory pre-tax deductions – you don’t have to worry about saving for it, because it’s automatic.
    – You own that MSA, and your employer can contribute to it, but they can’t ever take it away or take away funds from it.
    – You pay an additional premium (or deduct from your MSA) for a catastrophic insurance package that pays for emergency catastrophic care.
    – Any unused funds at the end of the year you keep. Your employer doesn’t get the unused money like they do now. (Which is why current MSAs don’t work nearly as well as they should.)
    – There’s no rationing of medical care. There’s a competitive market in healthcare that encourages lower cost providers offering the best quality for the dollar. The same as every other market works.

    As opposed to a government-run program which is already failing in the UK and would fail even faster when scaled up to a country of over 300 million. The plans for socialized medicine mean government bureaucrats denying patients life-saving procedures and the rationing of healthcare. No wonder Canadian politicians (and those who can afford it) go here for medical care they can’t get in Canada.

    Government-run healthcare doesn’t work. MSAs have their problems, but they’re better than the status quo and better than embracing a failed system of socialized medicine.

    Interesting isn’t it that you keep referring to American workers as “peasants” and the like — I do believe your Freudian slip is showing…

  8. A says:

    So how much is in your HSA, Jay?

  9. Jay Reding says:

    So how much is in your HSA, Jay?

    Unfortunately, I only can get a student insurance plan at the moment. I’d love to have the option of an HSA, as I’d be far better off with that than what I have now.

  10. Master of None says:

    Jay,

    Mark doesn’t want affordable health insurance, what he wants is free health care. These are two completely different things.

  11. Night Writer says:

    I’ve had an HSA for three years now, and it has accumulated several thousand dollars, from which we’ve withdrawn relatively nominal amounts for some prescriptions and dental care. Where did I get the monthly HSA contribution? From the “savings” I received from not purchasing the HMO or PPO options in my employer’s benefit package. I pay roughly a third of the HMO premium for a high-deductible catastrophic plan (folks used to call this “major medical”) and the rest of the difference goes into the HSA where it accumulates and carries over year-to-year for me and my family instead of disappearing, never to be seen again like my HMO premiums did. The dollars are automatically deducted from my paycheck just like they always were, but now I know a significant percentage is going to stay with me year to year.

    Because we’re relatively young and healthy our medical requirements are low, allowing us to accumulate HSA funds for later years (with compounding interest) for days when we’re older and perhaps in need of more care. Meanwhile, should a catastrophic event occur in the interim, I know my out-of-pocket is capped at a certain amount (plus a co-pay beyond a certain point). Yes, the deductible is more than I’d like to pay out if it came to that, but not so much as to be devastating. We would manage to get by. Perhaps it’s not a perfect solution, but it’s better than facing a catastrophic medical problem without any coverage at all.

    Two things come readily to mine that would improve my situation: 1) more transparent, market-based pricing of medical services when I’m shopping for treatment within my deductible, and 2) true portability where I can take the plan if I move from one employer to another. As to #1, just try to ask a clinic today how much you’d pay for, say, an EKG. You’ll get transferred four times before someone in Coding says the “Usual, Customary and Reasonable” charge that’s been set for your community is $xx. There’s no incentive for the clinic to try to compete for my business by charging a little less. As for #2, employers can go back to using health benefits as a way to compete for employees, offering a defined contribution to my portable plan (that I can compare to other prospective employers), while knowing their ultimate obligation is fixed (do you think that would interest GM?).

    It’s not a perfect solution, but if allowed to develop I believe it will result in more people getting more coverage (and care) with less inflation in healthcare costs.