Maggie's Farm

Going in to the 2010 November elections, should Congressional Republicans just be saying no to Democrats’ ObamaCare or offer their own program? 

Reluctantly, as there are some constructive remedies in the Republican approaches, no is the correct answer.  President Obama and Congressional Democrats in recklessly swinging their 2008 majority stick have blithely poked the hornets nest and are being chased by a popular uprising saying “no to Washington.”  There’s no reason to help Obama or Democrats or to damage Republican prospects.

Hard-core proponents of ObamaCare say they’re already damaged politically, and would lose more liberal support if delaying, so they might as well charge ahead, and even unilaterally ram it through. As ABC reports, however, the public has spoken, “no.”

Congressional Democrats still have a large majority and will not accept a Republican program unless large elements of the Democrats’ is included.  That would still move us down the road toward government control of individual choices, toward larger deficits and higher taxes. Most hard-core left Democrats have not and will not give up on getting their way.

Congressional Democrats and the liberal media would use a Republican alternative as an opportunity to shred Republicans as uncaring or not doing enough to meet their visions, and delusions, that there is a magic bullet that solves all real and purported problems.

Washington is still Washington, regardless of party, and lobbies would again kick into high gear to tilt to their own narrow advantage Republican proposals.  Enough Republicans, like Democrat politicians, would be swayed, and Republicans as a whole would be tarred and Republicans’ most energetic base be turned off by smarmy politics as usual in Washington.

Medicare, Medicaid, SCHIP, Tricare, civil service employees and other government health spending already have constituencies of almost half the population.  They will fight against almost any changes, especially benefit reductions or higher out-of-pocket costs or taxes, and many Republican leaners among them would turn away from Republicans.

If Republicans do get or get near a Congressional majority in November, there will be a better chance for enacting some strictly limited improvements. But, they must be highly focused and uniformly supported, without any addition of Democrat statism.  Rather than being put forth as going for too much and all-or-nothing like the Democrats have theirs, the Republican proposals should be presented as reasonable incrementals that improve without financial excesses or intrusion into personal lives.  That doesn’t mean that improvements will be minor but, rather, reasonable, respectful of individual needs, and limit government interference in free choices.

Here’s what would work, cumulatively helping the poor, the middle-class, and the more affluent, enlarging care for all without taking away deserved care.

1. Allow individual tax-deductions for premiums. Individuals who don’t get that deduction currently would be encouraged to obtain health insurance.  The poorer would be no worse or better off.  The middle-class uninsured would be on equal terms to those receiving employer-paid benefits.

2.  Broaden IRS Section 125 to allow individuals to use pre-tax income for health care  expenses.  Eliminate the current “use-it-or-lose-it” provision so such savings can accumulate toward catastrophic needs, Part D Medicare Rx “donut-hole” expenses, professional long-term care for loss of two or more of the currently defined “activities of daily living”, or other IRS Section 213 (the Section that lists allowed professional medical treatments) retirement medical care. Section 213 would be broadened to include Over-The-Counter medications, if prescribed by a doctor or dentist.  Again, the middle-class would be benefitted who aren’t employed and provided Section 125 plans or employed and not offered employer Section 125 plans.  Current health savings accounts, HRA’s and HAS’s, would remain the same, and be immediately vested if funded.

3. Retain Medicare Advantage programs, which have higher benefits and lower co-pays  than straight Medicare, and are more widely used by the poorer, but limit those higher benefits and lower co-pays to medical, dental and vision care, dental care not currently provided.  This would allow some reduction in government subsidies.  Other ancillary non-core benefits would be eliminated, so broader need core benefits would be provided.  Medicare Advantage plans use networks with negotiated rates and some gatekeeper-usage controls, which reduces their costs and, as presently, would have to compete with each other.

4. Require full portability of individual medical insurance to other carriers at the same or lower actuarial level of benefits, reducing loss of coverage when moving to another area and increasing competitive measuring across carriers that reduces confusion.  Rather than guarantee issue incenting individuals to wait until after they’re sick or injured, driving up the premiums of the more responsible, individuals would have more incentive to at least lock-in more affordable and more catastrophic benefits.

5. Allow insurers to offer their plans nationally, to increase choices of benefit levels.  Of course, premiums in each area would reflect local costs.  This would, also, increase measurement and knowledge of local variations in costs on an apples-to-apples basis, and competitive pressures reduce higher outliers.

6. Allow all immigrants, whether legal or illegal, to enroll in private or government health plans but require full payment of full-cost premiums.  This would reduce their uninsurance among the more more responsible and those able to afford premiums.  Legal immigrants would be required to provide proof of insurance, whether private or governmental, and could not be naturalized to citizenship unless providing proof of “credible” medical insurance (“credible” as per the current HIPAA law) from the date of entry to the US.

7. Provide means-testing (includes income and all financial assets up to, say, medical expenses of 10% of their combined total) of uninsured citizens and legal immigrants who obtain professional health or dental care, possibly professional long-term care (as discussed above) in order to apply for government assistance. The government assistance would be for the cost in excess of that 10% per year that is above the same rates as the provider’s highest rates negotiated with a private insurer + 20%. Currently, “list” prices charged those uninsured may be 30-100% higher than negotiated with insurers.  This would protect the poor while incenting obtaining coverage, at least cheaper catastrophic coverage.  Those qualified uninsured would be required to enroll in the appropriate government program.

8. Require tort medical cases to be heard by specialized courts, to reduce the sway of emotions in outsize judgments.  Tort attorneys would receive fees up to 30% of pre-negotiated settlements, but 25% of trial judgments, encouraging more reasonable and less legally costly results for those who deserve recompence.

9. State Medicaid or SCHIP programs offering benefits above the federal level of benefits or enrollee income would be ineligible for any federal subsidies. Higher “welfare” states would not be able to pass their largesse on to taxpayers elsewhere, and would have to justify them to their own voters.

10. Private or government retiree health programs would be required to become fully actuarially funded within 5-years, or face loss of tax-reduction in the case of private plans or be required to reduce of benefits in the case of government plans.  This would include previously negotiated union plans.

The Democrats’ vision of the “perfect” is the enemy of the “good.”  There is little public support for the Democrats’ overexpansive, excess cost, intrusion into our very lives.  There is widespread support for the above reasonable improvements.

A government fee is imposed on those who directly benefit from the government service, such as a fishing fee to support restocking, a fee for using a toll-road, or an extra fire insurance fee to support the local fire-fighting service in higher-risk areas near forests.  A government tax is imposed on everyone, or most, though the government service does not directly benefit the taxpayer.

Eminently sensible Robert Samuelson opines that President Obama’s tax on the financial industry benefits all taxpayers, who have had thrust on them the costs of bailing out excess risk-takers who themselves benefit in higher pay for taking higher risks.  However, Samuelson misses the fact that the tax would land on the well-run firms, acting to reduce their “reward” for acting responsibly.

More sensible, and targeted, would be a high, even confiscatory fee imposed on those in specific firms receiving a taxpayer-bailout who in the current or previous year received salary and bonuses above, say, $1 million.  That would make them think twice about reckless gambling and insufficient due diligence.  It may not raise enough to offset billions of taxpayer funds spent to stabilize markets, but it won’t stifle markets or penalize the responsible firms, and will encourage more responsibility by targeting rather than blunderbussing.