It Is Not Rocket Science: Here’s How To Fix Obamacare

Donald Trump meeting with health insurance executives at the White House

What’s wrong with Obamacare?  Is it rising premiums and lack of choice, as some Republicans would have you believe?  Or is it that insurance companies don’t like the increased transparency and competition that comes with health care exchanges?

Or, as Libertarians such as Ron Paul argue, is Obamacare just another expensive “entitlement” program that fosters a culture of dependency on government handouts?

To be sure, rising health care costs are a problem.  But that was the case long before Obamacare, and the recent Republican proposal is likely to make matters worse, not better.  Simply providing tax credits, as Republicans propose, does virtually nothing to constrain costs or improve quality of care.

Instead, the way the Republican plan controls costs is to pay individuals a fixed amount based on age.  This approach effectively cuts benefits and disproportionately hurts the poor and middle class.

What is really going on is Republicans (and some Democrats) appear most concerned about protecting insurance companies from competition – and from the government using its leverage to negotiate prices.  Others seem to want to limit health care subsidies in order to constrain the size and scope of government and avoid higher taxes – even if that means most Americans will not have access to decent, affordable health care.

It is not rocket science: To fix Obamacare, we should provide everyone with a Medicare buy-in option with subsidies scaled to age and income.  Government would continue to negotiate prices directly (or through subcontractors) with health care providers.

Medicare has the advantage of a network infrastructure already in place.  Providers are accustomed to using it.  It is efficient and cost effective and the quality of care, as many Medicare participants will attest, is excellent.

A similar proposal was debated when Obamacare was first introduced, but dropped because it was considered unlikely to pass at the time.

However, now is the time to act.  Democrats must push back hard on Republican orthodoxy that big government is universally bad.   Not only is single payer health care efficient and cost effective, it is good for the economy.  Providing health care to employees is a major cost of doing business, and lower overall costs have the potential to make American business more competitive.

Moreover, under a Medicare buy-in approach, individuals could still be given the option of using credits to buy directly from the insurance companies (although it would likely be more expensive), or purchase supplemental or “Cadillac” coverage.

By almost every major measure, costs are lower and overall health outcomes better in countries, such as Canada and the Netherlands, that offer single payer, universal health care.

What’s not to like about quality health care at affordable prices for all Americans – along with additional options for those who want it and can afford it?

Well, for one thing, insurance companies likely won’t make as much money.  And members of Congress would probably see a sharp reduction in campaign contributions from the insurance lobby.

It comes down to this:  high quality, affordable health care for all Americans v. bigger profits for insurance companies.

We’ll let you know how that works out.