Jebcare is still government-facilitated health care

Jeb Bush is releasing what he calls “Jebcare,” his health care plan he thinks is the best replacement for Obamacare. It has some okay things in it, but a lot of it is just a “big government conservative” spin on health care. The plan also shows a propensity among the GOP to “go small” with their solutions, instead of thinking radically and trying something which could be considered revolutionary. Bush’s plan focuses on three things: Promoting innovation in health care, lowering costs, and taking health care out of the hands of DC and putting it into the hands of the states. There are some good parts in the innovation part and everything else is kind of “meh.”

One thing about Bush’s plan which is really good is his promise to modernize the FDA’s regulations and do a review of health innovation regulations. The FDA is an agency which is partially redundant with the Department of Agriculture. There’s no reason why the government needs to know what food is fed to animals, just like there’s no business knowing what kind of food parents give kids. Looking into their regulations and trying to modernize them isn’t bad, but Bush should be willing to look at scrapping the entire FDA and either rebuilding it from the ground up or just letting it wither away. Milton Friedman complained how the FDA has actually hurt Americans because it’s increased research costs. Those costs are then passed down to the supplier and then the consumer. Daniel Klein suggested at Foundation for Economic Education in 2000 that the best way to protect patients from bad drugs is to trust doctors who are affiliated with health organizations, plus have independent organizations do various reviews of products. It’s great Bush wants to modernize FDA regulations, but he doesn’t say how he’d do it. Is he actually be willing to cut regulations or not and how many of them would he cut? Bush needs to be more clear. The same goes for the review of health innovation regulations. There’s nothing wrong with wanting to look at what regulations are killing health care companies and doctors, specifically those who get involved in research. Health and Human Services has almost 1200 pages of regulations covering everything from the Head Start Program (which is supposed to be education) to Medicare. Going through and looking at all regulations and programs which hurt more than help is a good thing. But Bush has to be willing to follow up by getting rid of the regulations which hurt. He might be willing to do this, he might not.

Bush’s next suggestion looks at lowering costs and making sure all Americans have health coverage. It’s interesting to note Bush doesn’t suggest getting rid of the individual mandate on health insurance, nor does he want employers to stop providing health insurance. It’s possible Bush is just assuming people will realize he wants the individual mandate gone, but you know what they say about people who “assume.” But here’s what Bush wants to do.

*Provide a tax credit for the purchase of affordable, portable health plans that protect Americans from high-cost medical events

*Increase contribution limits and uses for Health Savings Accounts (HSAs) to help with out-of-pocket costs

*Facilitate transparency on costs and outcomes

*Cap the employer tax exclusion to lower insurance premiums

*Allow employers to use financial incentives to encourage wellness programs

*Enable small businesses to make tax-free contributions to their workers’ individual, portable health plans

It’s a little frustrating to see some of these proposals, especially the employer one. It would honestly be easier to make it so people can buy health insurance from individual companies, instead of wanting their employer to do it. That would end up saving companies more money and allow people to keep more of their paycheck. It might also see premiums go down because there’s more of a direct connection between insurance companies and customers. Bush’s plan on HSA’s isn’t a bad idea, however, it still raises the question as to why there are limits on HSA’s to begin with? If someone wants to put cash in an HSA, it’s not the government’s business how much goes into it. The same goes for insurance in general. There’s a reason why cash only doctors are getting more popular in the U.S. They don’t have to worry about insurance and neither do customers. One Dallas-Fort Worth area doctor told WFAA last year, being cash only is just simpler.

“We don’t have to worry about health insurance; we don’t have to worry about pre-authorization. If you want to get your thyroid checked, we can do that; it’s 25 bucks.”

That certainly seems a lot better than billing insurance companies (or the government), then having to wait to be paid back. HSA’s do help people pay for medical expenses, so this is one way doctors would get their cash without waiting. As for the allowing employers to use financial incentive on wellness, there are companies which already do this. It doesn’t really make sense for Bush to say, “Hey do this,” if it’s already being done. The tax credit proposal for small businesses is okay, but it really seems easier to let individuals buy their own health insurance, instead of the companies they work for.

The third part of Bush’s plan is the one which is really bothersome, but there is some logic to it (emphasis mine).

States should have responsibility, freedom and accountability to make their individual insurance markets more competitive, enhance access to care and design solutions for vulnerable Americans. Instead of Washington standardization, this approach emphasizes transparent outcome standards. States will have streamlined, capped federal funding and be responsible for meeting transparent metrics…

Bush’s idea about states setting the standards is similar to what they do with car insurance. This isn’t a bad idea, but is it really the state’s job to set standards when it comes to insurance (health or car)? It seems like this would be something left up to the consumer and the insurance company. If the companies are transparent on the costs and what would be covered, then consumers know what’s covered and what isn’t. But Bush also gets into a smaller version of state-run health care by saying there has to be a strong safety net.

To achieve this, states may use a number of strategies: individualized, community-based benefit designs; coordinated care for individuals with behavioral health conditions and the disabled; tailored care delivery to reflect the diversity of state populations; personalized care solutions for high-risk individuals with proven data analytics; work requirements for able-bodied individuals; premium assistance for individual and employer-provided coverage; and consolidated funding from various programs to better coordinate care.

He may have gotten this from talking to Arthur Brooks at the American Enterprise Institute, who does believe a safety net should exist. The net has certainly helped people who truly need help, but I still think individual charity is best. There’s just better accountability that way because people know what the money is going to be spent on. Plus, less fraud happens under direct charity versus state charity. It’s easy to rely on the state to do this sort of thing, but it may end up being better to let the individual do it. The safety net isn’t going to go away tomorrow, so the only way to get rid of it is to do a gradual reduction in what it covers over a period of seven to ten years. This gives charities the chance to get started and start accepting money.

The other troubling aspect of Bush’s proposal is something he wrote in New Hampshire Union-Leader on pre-existing conditions and state-run markets.

• Encourage states to guarantee access for those with pre-existing conditions and to make affordable health plans available in their states.

This is a big problem because it’s again relying on the state to manage health care, instead of individuals. Why shouldn’t health insurance companies be able to say, “Hey, if you spend and extra $50-$100 we’ll cover pre-existing conditions”? Or why can’t a doctor or hospital say, “Hey, I’ll charge $XXXX for chemotherapy or surgery”? This certainly would make it easier for consumers, and possibly lower health care costs. It also holds insurance companies more accountable, and gives them reason to actually cover pre-existing conditions versus not. There’s no reason for the government to be involved in this, whether it’s federal or state.

Bush’s plan definitely has its supporters. James C. Capretta wrote at National Review how Bush’s plan is conservative and the best idea from the “repeal and replace” crowd.

Jeb Bush clearly understands what’s at stake. The former Florida governor and current candidate for the Republican presidential nomination released a reform plan yesterday that is a more-than-viable Obamacare alternative. It is a very strong proposal that builds upon years of growing consensus within the party over the essential components of an Obamacare replacement.

The problem is Bush’s plan isn’t bold. It’s got some good parts sure, but instead of doing a smaller government-involved health care proposal, Bush should be willing to let the free market loose. There’s a reason why 19% of Texas doctors aren’t taking health insurance and why 30% of doctors in the U.S. aren’t taking new Medicaid patients. There’s too much red tape and the money vs. the costs doesn’t work out. Doctors and hospitals should be able to set their own prices on anything from an ingrown toenail to heart surgery. If the left is willing to “go bold” on idea and start sucking in more power to the state, why can’t the right “go bold” and start promoting the free market more? This is where Bush’s plan fails. It leans closer to the center, instead of on one side or the other. Bush’s plan is certainly better than Obamacare, but it simply doesn’t go far enough.