Now that the legal issues surrounding the constitutionality of the Affordable Care Act, also known as Obamacare, have been resolved by the creation of a constitutional extra-constitution ability to tax nothing, we can now move on to fixing our countries health care issues.
As I have mentioned previously, the first step in resolving an issue is to determine what the true problem is. If we try to solve a problem with a band-aid, we will likely just make the problem worse. What is the true problem with our healthcare system? Obamacare was designed to force people to purchase insurance and prohibit denying coverage on the basis of preexisting conditions.
Is the problem in healthcare that everyone does not have insurance? Why do people need insurance? People need insurance because the costs of getting healthcare are rising. The reasons for rising costs are hotly debated.
One reason costs are rising is our dependence on third party payments. Since the government or insurance covers the majority of healthcare costs, there is no incentive for consumer to show around. Demand becomes incredibly price inelastic.
A recent letter to the editor in the Reno Gazette-Journal made this point very clear. The gentleman who wrote in informed us that his wife had a CAT scan that was billed to her insurance for $4500. Since he did not have insurance, he shopped around and was able to get a CAT scan for $500. This kind of price disparity could not exist if the consumers where responsible for the full cost.
Eliminating our dependance on third party payments will for the market to behave in a more efficient manner. Health insurance should continue to exist for the purpose of cover insurable events, but should be eliminated for non-insurable evens. An insurable even is one that the insured cannot control. This pretty much leaves us with health insurance that covers only catastrophic events like cancer, heart attacks, accidents not covered by other insurance, etc.
One could argue that chronic conditions are insurable against beforehand. However, I do not think that insurance as currently constructed is the best way to pay for these. There exists discount plans under our current system that help patients get prescription drug and other medical devices at discounted rates. These could be utilized for those who have chronic conditions.
Another option is Health Saving Accounts (HSAs). As currently envisioned, HSAs as intended to be used with high deductible health insurance to help cover the costs of the deductible. They are tax deferred and unlike Flexible Spending Accounts, money rolls over at the end of the year and continues to accumulate.
Few people think that Obamacare is the ideal solution to our health care crisis. I do not intend this list of ideas to be comprehensive no do I assume that any particular proposal is the ideal solution. However, critics of Obamacare rarely talk about alternatives. We need serious reform but few people are talking about it. The Libertarian candidate that I support, Gary Johnson, does not mention his plans for health care at all. Mitt Romney has a plan, though like most campaign promises it will likely never be implemented. And Obama is more interested in promoting the plan he implemented then working on a real solution.
There are more issues that need to be tackled and I hope to address some of those in the future.