We are just a month away from the Supreme Court’s ruling on ObamaCare. So, what will Congressional Republicans do when the high court renders its decision? Republican leaders apparently have been mulling over their options, and Speaker John Boehner has said, “When the court rules, we’ll be ready.”
On Friday, Majority Leader Eric Cantor said in a memo that the House will vote on two partial repeal bills as early as June 4th. The first bill would repeal the health law's tax on medical devices, and the second would relax the law's restrictions on the use of health savings accounts (HSAs). While the medical device industry would be relieved to have the excise tax on their products repealed, the choice to focus on HSAs is an especially smart one for the GOP, since ObamaCare bans the use of HSAs for nonprescription drugs unless a doctor provides a prescription.
In addition, legislation that would ensure greater use of HSAs brings us back to the GOP’s “Pledge to America,” in which they promised to repeal ObamaCare, which was accomplished in the House, and to replace it with policies that would “lower costs, increase access to quality care, and strengthen the doctor-patient relationship.”
The policies mentioned on the GOP’s website include tort reform, allowing the purchase of health insurance across state lines, expanding health savings accounts, ensuring access to insurance for those with pre-existing conditions, and the prohibition of taxpayer funds for abortion. The repeal of two pieces of ObamaCare is certainly a move in the right direction. But, what about the rest of those great ideas to bring about lower health care costs? How will Republicans proceed once the Supreme Court renders its decision on the law?
If the Supreme Court upholds the law in its entirety, it sounds like some House Republicans will attempt to administer something like “first aid” to the nation. These leaders state that they will try to gut the president’s signature legislation of its core--the individual mandate--as well as the requirement that employers provide health insurance to employees, or pay fines.
That sounds good, but, like the attempts to repeal the medical device tax and relax HSAs, it is unlikely these bills will get very far in the current Senate and, even if they did, due to some election-conscious Democrats, the president would probably not sign them into law. In this scenario, the hope would be that the Republican nominee, presumably Mitt Romney, will win the election and give everyone a waiver from ObamaCare via executive order, followed, hopefully, by full congressional repeal.
However, in the event the entire law is declared unconstitutional or parts of the law are overturned, some Republicans say--get ready for this one--that they would want to propose bills that will allow the “popular” parts of ObamaCare to remain. Those parts that have “polled well” with the public include allowing adult children up to age 26 to remain on their parents’ health insurance plans, requiring insurance companies to provide coverage for pre-existing conditions, and keeping the Medicare “doughnut hole” closed so that the cost of prescription drugs does not increase dramatically for seniors.
Unless Speaker Boehner and House leaders have a plan that they are keeping under wraps, it would be a significant concern if Republicans, after two years of rightly assailing the boondoggle health care law, did not move to replace ObamaCare with a bill, or series of smaller bills, promoting free market principles in health care markets.
True, if the Supreme Court overturned ObamaCare, many Americans--even conservative Americans--would be so happy to be rid of it that they would be gun-shy about further intervention into health care policies. To give into this fear, however, could be a grave error. The reason why ObamaCare appealed to a fair number of uninformed people in the first place is because of the high cost of health care. With ObamaCare gone, health care costs will still be high. If Republicans leave the problems with health care costs unaddressed, they will open themselves up to attacks, from both the left and their conservative base, that they have, once again, done nothing when they had the chance.
It is worthwhile to mention that while, with ObamaCare, President Obama and Congressional Democrats turned health insurance into an entitlement program, the Republican health care proposals should not accomplish the same end. Republicans should be working to free up health care markets, voting to get government out of the way, and allowing competition to bring down costs. It should be the goal to enact long-term solutions to our dysfunctional health care system so that both young adults and those with pre-existing medical conditions have access to the health care they need. Votes based on what is “popular” in ObamaCare, when ObamaCare is the direct opposite of free market health care policy, seem grounded in what is politically expedient.
Common-sense, free-market health care policies that Republicans should consider include the ability for Americans to own their own insurance plans and an increase in the options and usage of health savings accounts so that Americans can take part in the decision-making process when it comes to health care costs.
For many, if not most Americans, health care has, quite inadvertently, become an “entitlement program” of sorts, not because of ObamaCare, but because of something that happened during World War II. Prior to the war, most health care was paid on a “fee for service” basis, whereby people paid doctors directly for their services. This was a time when health care was pretty much a “free market.”
The free market in health care, however, changed dramatically when WWII broke out, and factories needed to attract workers. One way they lured prospective employees was by offering fringe benefits, like generous health care “plans.” Then, both in 1943 and 1954, the IRS made the tax advantages for employer-based health care “plans” irresistible. Consequently, participation in health care “plans” rose from 9% of the population, in 1940, to 63% in 1963. Within less than 25 years, America moved away from a free-market, “fee for service,” health care system.
Even if a person pays for his or her own health insurance plan, most Americans today cannot even imagine paying doctors or laboratories directly for their services. When Americans pay “copays,” they pay the amount indicated by their insurance “plan,” without even knowing how much the doctor or laboratory is paid for services in total. The problem--and this is what needs to be addressed--is that most Americans are far removed from what their health care services cost, because employer-based plans have pre-arranged that for them. Imagine buying a house, a car, or a vacation without even considering the purchase price!
Employees might contribute to the costs of their health care insurance plans, often through payroll deduction programs, but they rarely, if ever, participate in the decision-making process about the direct costs of services themselves. Consequently, when health care costs increase, which they have already, employers may cut certain benefits, agree to “managed care” plans, in which the services of only certain providers may be used by employees, or expect employees to contribute more to their plans.
Throughout these changes, employees have little to do with the decision-making process, a main reason why health care costs are so high. When people become more directly involved in making choices for the highest quality service, at the lowest cost, the market will respond. And that’s where health savings accounts come in, allowing individuals to make more of those decisions. When we think about it, why do we want our employers making all the decisions for our family’s health care, based on what’s least expensive for them? Shouldn’t we want to make that decision? The answer, unfortunately, is that many of us do not. It’s a lot easier to have someone else do it for us. That’s called “entitlement” mentality.
If people owned their own insurance plans, it is likely that we would see a new industry of smaller insurance companies develop, businesses which would compete to provide Americans with health insurance that best suited their needs. Americans could purchase “catastrophic” health insurance plans, if they wished, to cover major medical and hospital costs, but, then, health savings accounts could be used directly by individuals for their discretionary medical care. When Americans are in the driver’s seat, people in health care industries will want our business, so they will become more competitive. And, if the Republicans follow through with tort reform as well, providers’ expenses will be less, a situation that will allow them to participate directly in the free market with their patients.
To get to that point, Republicans will need to put on their thinking caps, lead the discussion, and come up with a plan. It would be a shame to lose out on a chance like this--to lower the nation’s health care costs while still providing the best quality health care service in the world. Americans will get accustomed to having adult children on their insurance plans, just as they got accustomed to employer-based health insurance “plans.” Young adults, and those with diagnosed medical conditions, should be given the opportunity to purchase their own insurance plans. That means Republicans will have to get the government out of the way to allow that to happen.