Government already spend about 44 cents of each health care dollar. It’s a huge amount of Government funding and intervention.
The Democrats want to expand that further and are using ‘universal health care’ as their banner.
Romney’s observation, in his Harvard Business school-style thinking, was to observe that the same amount of Government funding was sufficient to get to a private-insurer-based universal health care system. The massachusetts system, by mandating health insurance coverage, enabled full pooling of health insurance.
This observation plus another observation, that it is overregulation of health insurance at the state level that drives up health care costs, is the key to a conservative solution. we can and should allow people to buy health insurance from any state, thus lowering the cost of health insurance.
“Romney’s health plan as presidential candidate focuses on a federalist approach in which states craft their own programs. Federalism is ok.”
Yup.
The Federal solution is to unshackle the states from Federal mandates that drive up costs, encourage Medical Savings Accounts that make more dollars by from the user of the services, reduce medical malpractice lawsuit overhead, and deregulate/reduce state-level mandates.
Looking at NRO’s review of Romney’s Federal plans, they are mostly in that direction. But now far enough IMHO. I’d like to see a candidate embrace the Health Care Choice Act...
http://www.nationalreview.com/murdock/murdock200601200808.asp
Maybe Mitt-supporter Sen Jim DeMint could get Romney to embrace this great idea.
Like the Mortgage interest deduction, this aspect of the tax code severely distorts incentives and is a big reason why our healthcare markets are so screwed up right now.
Because employer-based plan premiums can all be paid with pre-tax dollars, but copayments and out-of-pocket paymets to meet the deductible can't, employers have an incentive to offer health plans that have very low out-of-pocket patient expenitures. As a result, health insurance ceases to be insurance, but rather a subsidy, which in turn drives up the price.
Because so many people on plans in which they pay practically nothing out of pocket, they have an incentive to overconsume healthcare, as well as little to no incentive to shop around for the best deals on health services, further driving up prices and health plan costs.
Eliminate the deductibility of health plan premiums (I hesitate to call it insurance), and people will flock to high deductible plans that are true insurance. It would also eliminate the artificial link between employement and healthcare, which in turn would greatly increase labor market flexibility.