Your first mistake is thinking the government has to do something big to “health care” to replace Obamacare when you repeal it. You don’t. You simply have to do something small.
Romney apparently delivered a mish-mash of a speech that I have neither listened to or read, but I don’t have to right now because I don’t plan to refute him point-by-point. Apparently in bizarro-world, he thinks individual mandates are a good idea, but plans to give every state a waiver out of Obamacare anyway. Huh?
And then there was probably a bunch of gook about what he’s going to do instead. Which leads me back to that First Mistake: You don’t have to do something big. You merely have to do something small, and it’s something a whole batch of politicians would like to do anyway: Raise taxes.
I’m No Economist(TM), and I freely admit I may have this wrong. I’m a blogger who is, yes, still in her PJs today (but cut me a break, I just finished the first year of law school YESTERDAY). The fact that more people, smarter people than I, aren’t talking about this suggests I must be wrong about some part of it. But I’ll put it out there anyway:
1) Health care is paid for through, and handed out by, our employers, mostly, because there’s no income tax on that money that’s paid to the health insurance company, either for individuals or the employers.
2) Therefore employers want to offer you a big plan that covers everything, including every trip to the pediatrician every time your kid sneezes. (What? I’m not criticizing you, I’m lampooning the way I myself take my son to the doctor. A lot.) They want to offer you a “good plan” because it’s cheaper to pay the health insurance company than it is to pay you more salary. If they paid you more salary, you’d have to pay taxes on it, and so would they.
3) These plans are wasteful and encourage both a) overuse and b) overcharging. Why should the doctor’s office care what it charges for a routine visit about what’s probably a routine cold or flu if their customer isn’t paying for it? If the customer isn’t paying for it, the customer doesn’t care what it costs. So the doctor’s office will charge more than it would if it were charging you, as high as the insurance company will pay for. It’s not because they’re nefarious, it’s because the market encourages it. When the customer is not shopping carefully, the prices rise. Sure, why not? What would an oil change cost if your insurance company paid for it every time and you paid for THAT by fifty bucks per month more on your car insurance? Do you get your oil changed every month or pay $50 a time? But you’d pay for it as if you did if it was covered by insurance.
4) If we were paying for routine doctors’ visits ourselves, we’d use more thoughtful judgment in how often we went to the doctor and we’d jolly well pay attention to how much it cost. We’d shop for the best balance between a good doctor and a good price for a routine visit, not just take whatever doctor will take a payout from our insurance companies.
5) If insurance didn’t have to cover every last little routine visit to the doctor, it’d be a lot cheaper. If we paid for it fully ourselves, without our employer paying some of it, we’d make sure we had the best balance of the coverage we wanted vs. the monthly payment. We could decide between a plan with a high deductible and no coverage of routine visits vs. a plan with everything covered and a low deductible. Our employers wouldn’t be choosing for us, and they’d have to pay us more salary to make up for the fact that they no longer kicked in on health insurance.
But all of this starts with taxing health insurance payment money just like every other bit of income. That way companies no longer have the incentive to collude with the “health care” insurance companies to roll out plans that cost too much and pay out too much, we’re on our own to choose the best plan for us, and a certain amount could be added to the Standard Deduction on the IRS form to cover what we pay out for health insurance. In other words, tax it on the front end like everything else and then include it in the back end as part of the standard cost-of-being-a-living-human-in-America on the tax refund.
What’s so hard about that? It keeps our individual power of choice and smart shopping intact, it gives great incentives for the “health care” insurance companies to bring out a number of competitively priced options, and it gives great incentives to doctors and hospitals to price-compete. Win, win, win.
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