Video: What comes after ObamaCare repeal?

posted at 11:36 am on July 13, 2010 by Ed Morrissey

The Center for Freedom and Prosperity offers another in its Econ 101 series, but to be fair, this one’s a little more advanced — more like a 300-level course. Eline van den Broek delivers the lesson for today on ObamaCare and its repeal, and how that is really only step 1 of the necessary action needed to restore market forces back to the American health-care system.  That would return the system to a status quo ante that still involves too much government intervention and disconnect from pricing mechanisms:

I wrote about the issue of third-party payers extensively last year, and it will be even more of an issue if Republicans succeed in dismantling ObamaCare.  Van den Broek is entirely correct in pointing out that we didn’t have a free-market system for health care as much as we had one for health insurance, and even that wasn’t so free, thanks to endless government mandates at the state and federal level.  The entire basis for the health care of most Americans is spending other people’s money through the overuse of comprehensive policies that only make sense in the warped environment of tax policy that doesn’t count health insurance coverage as income.

A quick look at the economics show that most people wouldn’t choose comprehensive coverage if given a rational choice and a level field.  In 2007, the average individual comprehensive policy in Minnesota cost $3600 per year, or $300 per month.  That would cover two, and perhaps three, clinic visits every month.  Most healthy individuals only use a clinic once or twice a year, which means they throw away $3000 per year on coverage they never use.  But why would people who get comprehensive coverage for $50 a month through their employer and pay no taxes choose catastrophic insurance instead when the employer doesn’t compensate them for making a wiser choice — and even if they did pay the difference in higher wages, the government would tax it as income?

As painful as it will be, repeal has to be followed by reforming the tax system to get rid of the distortion our current tax policies create in health insurance.  We have to make the system more rational in order to get people into realistic and less expensive catastrophic coverage, and let them pay out of pocket for routine care, which will then become much more price competitive and more plentiful as providers shed the overhead costs of dealing with insurers.  Repeal is just the first step to real reform, and if we don’t take the next step, we will put ourselves at risk that the next attempt at ObamaCare will not be reversed.


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Ed, thank you for keeping Obamacare on the front burner. Your regular posts on its failures is fueling the momentum for repeal. THANK YOU!!!

parteagirl on July 13, 2010 at 11:38 AM

Step 1: Repeal ObamaCare.
Step 2: ???
Step 3: Profit!!

But yes, tax reform is needed.

tigerinexile on July 13, 2010 at 11:40 AM

Coverage needs to require options for sex change operations, botox, and glute enhancements, you know, the things that are really important for our daily health.

Bishop on July 13, 2010 at 11:41 AM

No RINO’s!

Repeal, repeal, repeal.

pain train on July 13, 2010 at 11:42 AM

What comes after healthcare repeal? Assuming that can happen and if it did it would be a first since government has yet to roll back any of its welfare programs, the next step should be to get the federal government completely out of the healthcare picture except maybe for tort reform since megabuck liability suits have been a major factor of driving up the healthcare costs.

docdave on July 13, 2010 at 11:43 AM

As painful as it will be, repeal has to be followed by reforming the tax system to get rid of the distortion our current tax policies create in health insurance. We have to make the system more rational in order to get people into realistic and less expensive catastrophic coverage, and let them pay out of pocket for routine care, which will then become much more price competitive and more plentiful as providers shed the overhead costs of dealing with insurers. Repeal is just the first step to real reform, and if we don’t take the next step, we will put ourselves at risk that the next attempt at ObamaCare will not be reversed.

are you listening GOP leaders?

cmsinaz on July 13, 2010 at 11:44 AM

What comes after ObamaCare repeal?

Obama repeal.

fogw on July 13, 2010 at 11:45 AM

Repeal first. Ask questions later.

Christian Conservative on July 13, 2010 at 11:46 AM

I’m tempted to say burn the whole damned edifice to the ground and let us start over.

Aitch748 on July 13, 2010 at 11:46 AM

As painful as it will be, repeal has to be followed by reforming the tax system to get rid of the distortion our current tax policies create in health insurance

Well said, Ed. If it’s repealed or modified(most likely)the GOP has to be very careful to craft replacements that have a chance of working. It will be a difficult job and one which the public will be watching carefully. I hope the new ranks of GOP are very aware of this. their survival may just depend on it. And, I hope that the far right will not stridently demand that which may be impossible in the eyes of most of the public. We can only hope! Something about not being able to please all of the people all of the time?

jeanie on July 13, 2010 at 11:47 AM

Good luck getting any politician of either side to voluntarily remove their mitts from a pie as big as that of health care.

I don’t know, maybe a Bachmann or Palin or Ryan would have the seeds to really move on making HC, but most pols aren’t about to test themselves.

Bishop on July 13, 2010 at 11:49 AM

As painful as it will be, repeal has to be followed by reforming the tax system to get rid of the distortion our current tax policies create in health insurance.

Trying to make this point to most uninformed folks who just want their “Obama stash” will only paint the informer as an out-of-touch elitist who doesn’t care about the little guy.

VibrioCocci on July 13, 2010 at 11:50 AM

What comes after ObamaCare repeal?

Obama repeal.

fogw on July 13, 2010 at 11:45 AM

Obama probably gets repealed before ObamaCare can be sent packing. Overriding the Presidential veto is a tall order.

hawksruleva on July 13, 2010 at 11:50 AM

As for me….I will be doing the Happy Dance!

Winebabe on July 13, 2010 at 11:51 AM

fogw,
I believe we will have to reverse the order.

rob verdi on July 13, 2010 at 11:58 AM

Off thread but only a little: another thing the GOP msut be careful to do well is be transparent, bi-partisan and carefully explain and justify their actions or lack of them to the public. The days when pols could hide are gone and I hope they know this and act accordingly. How very, very much I’d like to be proud of the way my Party handles themselves and the future of this country.

jeanie on July 13, 2010 at 11:58 AM

Repeal may be the easiest part of the puzzle to solve. I can see groups like the AARP spending a gazzillion dollars on attack ads if anyone attempts to monkey around with any of their “special” programs, count on it.

Johnnyreb on July 13, 2010 at 11:59 AM

hawksruleva on July 13, 2010 at 11:50 AM
rob verdi on July 13, 2010 at 11:58 AM

Right you are.

But impeachment could begin anytime. (more wishful thinking)

fogw on July 13, 2010 at 12:02 PM

As much as I would like to believe they will repeal this welfare program, I know that it will never happen. No entitlements have ever been repealed, GOP majority or not. So I don’t understand why Eline is talking like that. I would like to have a word with her in person, perhaps over dinner. There’s so much to discuss.

keep the change on July 13, 2010 at 12:04 PM

At this point, even the prostitutes at the AMA might well turn over on The One.

GarandFan on July 13, 2010 at 12:04 PM

If, as Ed suggests, the problem is approached via financial and regulatory reform of various kinds, the issue may be partially solved. As for the entitlements, yes a very sticky problem. One of the foremost reasons for careful, honest and fair explanations for any change. People may not like it but getting them to understand it and the reasons for it will help I think.

jeanie on July 13, 2010 at 12:06 PM

Ed, under a system like the one you advocate can it be said that “If you like your plan, you can keep your plan?”

Mark1971 on July 13, 2010 at 12:06 PM

We have to make the system more rational in order to get people into realistic and less expensive catastrophic coverage, and let them pay out of pocket for routine care, which will then become much more price competitive and more plentiful as providers shed the overhead costs of dealing with insurers.

Yes!

Connie on July 13, 2010 at 12:09 PM

But impeachment could begin anytime. (more wishful thinking)

fogw on July 13, 2010 at 12:02 PM

If you had the votes to impeach, you’d have the votes for repeal…

tigerinexile on July 13, 2010 at 12:10 PM

OT: Dingy Harry says no illegals in construction in Nevada

ConservativePartyNow on July 13, 2010 at 12:11 PM


Grahamnesty strikes again

cmsinaz on July 13, 2010 at 12:13 PM

What I really liked about this video was that she explained what was REALLY wrong with health care BEFORE Obama got a hold of it!
It was this argument (Spun to their own advantage) that they used to try to pass it and when that didn’t work they shoved it through anyway.
Finally some truth!

I have some personal experience with these kinds of health care systems my niece has almost died twice because of denial of services…

-Wasteland Man.

WastelandMan on July 13, 2010 at 12:13 PM

What comes next?

An immediate priority should be a thorough investigation of the DoJ, its chicanery regarding voter fraud and its race-based selective enforcement of laws that clearly violates civil rights laws and is inherently discriminatory.

hillbillyjim on July 13, 2010 at 12:15 PM

Well said, Ed. If it’s repealed or modified(most likely)the GOP has to be very careful to craft replacements that have a chance of working. It will be a difficult job and one which the public will be watching carefully. I hope the new ranks of GOP are very aware of this. their survival may just depend on it. And, I hope that the far right will not stridently demand that which may be impossible in the eyes of most of the public. We can only hope! Something about not being able to please all of the people all of the time?

jeanie on July 13, 2010 at 11:47 AM

Excellent points. ObamaCare won’t get repealed during the next Congress, even if Republicans take the House–the BEST that can happen is it gets de-funded, setting the stage for a REAL public debate, with the participation of both parties over what should replace it.

People are starting to find out that ObamaCare might mean less coverage for Medicare, and that it gives incentives for employers to dump private health insurance for their employees, and ObamaCare creates huge numbers of losers for very few winners.

Previous Republican majorities in Congress were content to ignore the health-care issue, but they need to address it in the next Congress, by proposing:

1) Serious tort reform, with caps on damages
2) Enabling purchase of health insurance across state lines
3) Enabling for-profit co-ops for purchase of health insurance by individuals and small business, prohibited by law from trading in the stock market or risky investments
4) Allowing people to purchase minimal catastrophic-coverage only, probably at low cost
5) Providing vouchers for low-income people (on a sliding scale, based on income) to purchase PRIVATE health insurance, funded by Medicare taxes. To those who pocket their vouchers and don’t buy insurance, if they get sick, too bad!

Such a proposal probably couldn’t get past a Presidential veto in 2011-12, but it would be a good platform to run on, both against Obama, and for 2012 Congressional elections. Republicans could also say that people are paying extra taxes FOR ObamaCare but will not receive any benefits until 2014, and propose repealing ObamaCare taxes in 2013 and refunding them to the taxpayers.

Steve Z on July 13, 2010 at 12:16 PM

The problem originated in WWII wage/price controls that made it illegal to give workers a raise. Employers started giving “benefits” to certain key employees to get around those rules. One such benefit was health insurance. Because the employer deducts the cost of the benefit in calculating the profit taxable by government, but the employee doesn’t count that cost as part of his own taxable income, third-party payments have an unnatural tax advantage.

Medical Savings Accounts attempt to address that imbalance, encouraging workers to manage their own health care costs with high-deductible, low-premium policies, but Obamacare will make those policies illegal.

The Monster on July 13, 2010 at 12:17 PM

What comes after ObamaCare repeal?

That should say: What to repeal after Obamacare?

faraway on July 13, 2010 at 12:17 PM

Steve Z on July 13, 2010 at 12:16 PM

Vetoes can be over ridden. If these are good policies arrived at in open and bi-partisan fashion, they probably will be. The thing to watch out for is the habit both Parties have of slipping some part of their wish list into these bills. That has to stop. Little is more troubling to the process of making law than that practice.

jeanie on July 13, 2010 at 12:24 PM

How about after health care a reform of the way Higher Education is funded.

rob verdi on July 13, 2010 at 12:28 PM

The HSA is still alive. And when it’s allowed to compete, it wins.

applebutter on July 13, 2010 at 12:41 PM

Step 2 should be getting the incompetent federal government the hell out of all areas of health care, period.

Dave R. on July 13, 2010 at 1:01 PM

This:

Madam Speaker, I rise to introduce the Private Option Health Care Act. This bill places individuals back in control of health care by replacing the recently passed tax-spend-and-regulate health care law with reforms designed to restore a free market health care system.

The major problems with American health care are rooted in government policies that encourage excessive reliance on third-party payers. The excessive reliance on third-party payers removes incentives for individual patients to concern themselves with health care costs. Laws and policies promoting Health Maintenance Organizations (HMOs) resulted from a desperate attempt to control spiraling costs. However, instead of promoting an efficient health care system, HMOs further took control over health care away from patients and physicians. Furthermore, the third-party payer system creates a two-tier health care system where people whose employers can afford to offer “Cadillac” plans have access to top quality health care, while people unable to obtain health insurance from their employers face obstacles in obtaining quality health care.

The Private Option Health Care Act gives control of health care back into the hands of individuals through tax credits and tax deductions, improving Health Savings Accounts and Flexible Savings Accounts. Specifically, the bill:

A. Provides all Americans with a tax credit for 100% of health care expenses. The tax credit is fully refundable against both income and payroll taxes;
B. Allows individuals to roll over unused amounts in cafeteria plans and Flexible Savings Accounts (FSA);
C. Provides a tax credit for premiums for high-deductible insurance policies connected with a Health Savings Accounts (HSAs) and allows seniors to use funds in HSAs to pay for medigap policies;
D. Repeals the 7.5% threshold for the deduction of medical expenses, thus making all medical expenses tax deductible.

This bill also creates a competitive market in heath insurance. It achieves this goal by exercising Congress’s authority under the Commerce Clause to allow individuals to purchase health insurance across state lines. The near-monopoly position many health insurers have in many states and the high prices and inefficiencies that result, is a direct result of state laws limiting people’s ability to buy health insurance that meets their needs, instead of a health insurance plan that meets what state legislators, special interests, and health insurance lobbyists think they should have. Ending this ban will create a truly competitive marketplace in health insurance and give insurance companies more incentive to offer quality insurance at affordable prices.

The Private Option Health Care Act also provides an effective means of ensuring that people harmed during medical treatment receive fair compensation while reducing the burden of costly malpractice litigation on the health care system. The bill achieves this goal by providing a tax credit for negative outcomes insurance purchased before medical treatment. The insurance will provide compensation for any negative outcomes of the medical treatment. Patients can receive this insurance without having to go through lengthy litigation and without having to give away a large portion of their awards to trial lawyers.

Finally, the Private Option Health Care Act also lowers the prices of prescription drugs by reducing barriers to the importation of Food and Drug Administration (FDA)-approved pharmaceuticals. Under my bill, anyone wishing to import a drug simply submits an application to the FDA, which then must approve the drug unless the FDA finds the drug is either not approved for use in the United States or is adulterated or misbranded. This process will make safe and available imported medicines affordable to millions of Americans. Letting the free market work is the best means of lowering the cost of prescription drugs.

Madam Speaker, the Private Option Health Care Act allows Congress to correct the mistake it made last month by replacing the new health care law with health care measures that give control to health care to individuals, instead of the federal government and politically-influential corporations. I urge my colleagues to support this bill.

Rae on July 13, 2010 at 1:02 PM

Step 1: Repeal ObamaCare.
Step 2: ???
Step 3: Profit!!

But yes, tax reform is needed.

tigerinexile on July 13, 2010 at 11:40 AM

No need for step 2 — though a good step 2 would improve step 3.

Count to 10 on July 13, 2010 at 1:06 PM

That would return the system to a status quo ante

Is that something to do with Obama’s illegal alien relative getting to stay in the US?

KS Rex on July 13, 2010 at 1:13 PM

Just keep giving the patient more morphine.
The question, simply put is:do you want to experience economic pain now or a lot more economic pain later? And when that excruciating pain comes, the first response will be to look for someone else to blame other than self (the voter ) who brought these politicians into office in the first place.
The American voter just keeps letting himself be fooled, deluded and deceived.
Problem is, they want to take me over the cliff with them.

Amendment X on July 13, 2010 at 1:27 PM

Don’t forget Healthcare Savings Accounts. Obamacare reduced what you could use them for, and they remain a “use it or lose it” annual benefit.

Give folks the option to use HSAs for prescriptions, copays etc. (as now), add vitamins etc., and let us roll the $ over year-to-year.

If your current plan costs you $3000 and your boss $4000, let the company give you a $3000 raise and no insurance. Put $4000 into an HSA to spend as you need/choose, buy a catastrophic policy for maybe $1000, and let capitalism work its magic.

Oh, and if you only spend $3000 of the HSA for 10 years, that other $10K is a nice cushion if you need it.

cs89 on July 13, 2010 at 2:02 PM

Many excellent ideas in this thread. Dr. Paul Hsieh has written ably on pro-freedom reform of healthcare:

westandfirm.org

AshleyTKing on July 13, 2010 at 4:05 PM