Beyond the Supremes: A Better Health Insurance System

WASHINGTON- It's Thursday, the Supreme Court has finally issued its ruling on the Patient Protection and Affordable Care Act, and it's time for Americans to think about a better health insurance system.

American families need better options for health insurance. A health insurance system needs to be accessible, portable, and inexpensive, just like other forms of insurance.

In contrast, PPACA mandates a one-size-fits all, overly-generous plan, with required free routine care, mandatory mental health and drug abuse coverage, and no lifetime maximum. Combined with the requirement that people can sign up anytime, health insurance becomes very expensive, with the young subsidizing the old.

There's no reason that America's economy can't produce more health insurance choices. The economy provides a wide range of insurance products-home insurance, auto insurance, life insurance, renters' insurance-that Americans choose to buy without mandates. Why? Because they're a good deal. Americans want them. Health insurance should be the same way.

Life insurance and renters' insurance are not required. Many Americans go beyond the required minimum auto and home insurance because these policies have value.

America knows how to help people with low incomes. Those who can't afford housing get housing vouchers. Those who can't afford food participate in the Supplemental Nutrition Assistance Program, formerly food stamps. Public housing has been a failure, and we don't deliver baskets of groceries to the doors of low-income Americans, we give them a debit card to purchase food. SNAP has been subject to abuse, but no one is proposing to replace it with one-size-fits-all bags of groceries.

The same should be true of health insurance. Those who can't afford it should be offered refundable tax credits, or vouchers, to purchase it themselves, so they can have the same choice of doctors and services as other Americans.

Just as in other forms of insurance, we can lower costs by reducing unnecessary regulation, increasing competition and patient choice. Patients should decide what type of coverage meets their needs, not be told what they must purchase by the federal government.

For example, if some people want their children to be on their insurance plan until age 26, or age 28, or age 30, they should be able to purchase plans that cover their children, at a price. Others who do not have children, or who do not want their children on their plans, should not have to pay the costs.

How would such a system operate?

Give All Americans Tax Credits for Health Insurance Purchase. You don't get your auto insurance through your employer, why should you get your health insurance? The answer: due to a quirk of history, health insurance from your employer is a tax-free benefit, but if you purchase it yourself, you pay for it with already-taxed dollars.

One way to give Americans more health insurance choices is to give them refundable tax credits to buy health insurance, individually, not through their employers. This amount could be adjusted up or down depending on income. Congress could pay for this by ending the tax-free status of employer-provided health insurance.

This would end the employer advantage to providing health insurance, and encourage insurance companies to compete for clients. Now people hear "Call Geico to get a 15-minute quote and cut your auto insurance premiums." Soon they could hear "Call Kaiser/Aetna/Blue Cross-Blue Shield for a 15-minute quote and cut your health insurance premiums."

Allow Plans to Compete Over State Lines. Breaking down barriers to national competition in insurance (which, by act of Congress, is still regulated by states) would enhance competition and give consumers more choices, just as consumers are allowed to buy goods and services from companies in other states.

Prospective purchasers should be told the state of origin so that they can seek information about the vigor of each state's regulation. Such a broader choice of health insurance plans would reduce costs through competition and shopping around.

State Risk Pools. If coverage is more easily affordable there will be fewer uncovered families with uninsurable conditions. But about 2 million to 4 million people a year have uninsurable conditions-about one to two percent of the U.S. population of 313 million.

In order to enable insurance companies to offer health insurance with low-cost premiums, those with severe illness need to be offered the option of special health insurance programs through the state, known as risk pools, as has been proposed by Ethics and Public Policy scholar James Capretta.

States are laboratories of innovation and have different needs in their populations. They can also learn from each other as to what works best and what does not. The federal government should be prepared to help states set up risk pools if they request such assistance. This would be less expensive than the trillion-dollar cost of PPACA, and provide more choice for those who really need extra help with difficult to insure conditions.

Those with pre-existing conditions would receive health insurance, subsidized by the state, through regular insurance companies. They would be able to choose their health insurance, with the price of the premiums depending on income. Alternatively, states might select one insurance company to insure all those with uninsurable conditions.

Several fully-developed health care plans with scope for a wider consumer choice have been drafted and are ready to be debated in committee.

The Empowering Patients First Act, H.R. 3000, sponsored by Georgia Congressman Tom Price, a physician and chairman of the House Republican Policy Committee, allows individuals a tax deduction for health insurance, just as employers have such a deduction. Workers who want to use their deduction to continue to be covered by their employer would be able to do so, and those who want to purchase health insurance on their own would have their own tax deduction.

House Budget Committee Chairman Paul Ryan's Path to Prosperity contains patient-centered options for refundable tax credits for health insurance, as well as Medicare and Medicaid reforms.

California Republican Devin Nunes has proposed replacing Medicare and Medicaid with a Medi-choice card, a debit card used for purchase of health insurance and copayments.

In America, we know how to provide insurance. We know how to provide benefits for low-income Americans. We just need to apply this know-how to health insurance.

Regardless of the Supreme Court's verdict, we can succeed.