Saturday, September 21, 2013

The Obamacare “exemption” for Congress, explained in the Wall Street Journal.  The comments are just as interesting as the article.  It's ironic that Congress panics (and cuts themselves a special deal) at the effect Obamacare has on their own staffs, but seems to have trouble understanding why it's a problem for business.

Not that anybody will listen to me, but I think the only solution to this mess is the following five-step plan:
  1. Repeal Obamacare in its entirety.  Further effective reform isn't possible so long as Obamacare is in force.
  2. Stop allowing businesses to deduct the cost of health insurance as an expense.  Most businesses will then drop insurance benefits like a hot potato, replacing them with compensating salary increases.  They'll do this because the salary increases are predictable and controllable, unlike the insurance premiums.  The most important effect of this will be to expose the actual cost of healthcare to consumers, who can then make informed choices about their healthcare purchases – just like they do now for cars, houses, etc.
  3. Get rid of all health insurance mandates, federal, state, and local.  This will allow the return of “real” insurance policies that cover just unpredictable major medical expenses.  The most important consequence of this will be that consumers will start considering the cost benefit tradeoffs in all their ordinary medical expenditures – and medical providers will start competing on cost.  We'll all win, just as we have with other services exposed to market forces.
  4. Remove any regulation that prevents or impedes health insurance from being sold in all states.  This will enlarge the insurance pools that drive insurance premiums, and in a direction that favors consumers.
  5. Provide a system of subsidies for the poor who genuinely can't afford basic medical care, major medical insurance, or both.  We can have a good old-fashioned political argument about how much these subsidies are, and who gets them – but at least we'll all understand that we're talking about a welfare program.
But like I said, nobody is listening to me :)

No comments:

Post a Comment