We need to start taking a look at the implications of Nullification. When we strike down Obamacare here in Oregon, that leaves us free to pursue another model established by us here in Oregon. Since we are saddled with John Kitzaber, we may very well be forced to make that system the HB2009 that is so feared by many of my Conservative friends…. I really hope not. What if we are not forced to that course , we could follow a few different courses. I would like to make some suggestions in this column.
1. Total Free Market
Of course this would be the Libertarians’ preference. We could privatize the current welfare-state functions by giving them each a small lump-sum upfront and require that they start fund-raising (as a private charity) to provide the functions which they now fill. We would stop giving state preferential treatment for healthcare contributions made by employers to employees’ health “insurance” payments. We would drastically reduce the fees and license costs to providers of healthcare. These kinds of reform would start us towards a free market in healthcare. The biggest single thing we could do to almost single-handedly arrest the out-of-control price inflation within the healthcare sector would be to find a way to eliminate (without the use of coercion) the use of the third-party payer system in healthcare. If we could find a way to create an actual Free market in healthcare (vice the Fascist model of corporations providing entitlements that we use now) it would revolutionize the industry… instead of spiraling up, the prices would start spiraling down. Pricing pressure could be brought to bear against the industry.
Of course, the fully free market solution will likely not be palatable to enough of us to get it in place, but it is always interesting to look at an area and ask ourselves “how much would we have to do to get to a free market?” This gives us a good idea of how far we have progressed down the rabbit hole. There are a number of other things which would have to be done to allow such a system to operate in an economy so state-centered as ours currently is, sad huh?
2. Modified Third-Party Payer
If we cannot get to an actual “free” market in healthcare, there are some other steps which could help. Namely, we could modify the third-party payer system to resemble in function an actual free-market system. To this end we could replace the current health insurance model with one modeled on a consumer-driven healthcare plan model used in some private companies. For those of you unfamiliar with this idea, rather than your healthcare provider sending the bill for services you’ve consumed to your insurance company, they would send it to you. You would pay 100% up to a certain point (some moderately low deductible such as $5000 in one year) and you would pay it out of a pool of money that you received at the beginning of the year say $400 – $1000 per dependent. This money would be replenished each year, and any unused portion of it would roll over from year to year. All preventative checkups would be covered at 100% regardless of your deductible, and would not count towards meeting your deductible. Drugs would be purchasable using the pool of money in the beginning of the year.
This sort of insurance product would encourage thrift in our healthcare spending. I really hate to encourage State coercion, so in the beginning this would only be for subsidized healthcare (Medicare/Medicaid) or for Government employees (these two groups actually account for >50% of healthcare dollars spent- so it should be sufficient). After the market gets used to this setup it should catch on – as I believe this model for Health “insurance” would fix 95% of our inflation problems, and would be much freer than our current system.
One addition to this system that was brought up when asking for input has been a fix for the mandatory hospital care that we all pay for in the end. I would think this is easily addressed by simply signing people up in the hospital who have no insurance, or who do not pay at the time of service. Thus (for the welfare state cases) we will find enforcement at no cost in the hospitals. Hospitals would be paid out of this insurance pool. and free care should no longer be a “tax deduction”. After the fund is depleted, care needs to be deferred until the next year, or paid for out of pocket (I’m sure charities would also step in to fill this void).
That one is a real “hail Mary”, but easily doable with the current framework of government. But if not those then what?
3. Interstate Competition, Tort Reform, Drug Re-importation, Etc…
The ‘Conservative” fixes. These are the panacea that conservatives were arguing for during the Obamacare Debate. Some of these are real good ideas, such as interstate competition between insurance companies. This one is good for obvious reasons… any time you increase the number of consensual choices you have for pricing/quality of the service you are buying, the price will always be lower than it otherwise would be. Another good one is relaxing the number of unnecessary regulations that are imposed upon the insurance companies. A healthy male could probably afford to be uncovered for the service of yearly breast-cancer screenings. Tort reform is another good one – it will however need to be very carefully crafted to avoid throwing the baby out with the bathwater.
For the most part, I view these fixes as temporary slowing measures at best. As long as we leave the link between payer (insurance company) and consumer (patient) broken, then these fixes will only slow the increase in prices. This is something, but not nearly enough.
If we enact choice one or two, we (Oregon) are likely to lead the country out of the medical spending death-spiral we are in. If we choose the third… we will simply be the last in the ditch after the rest of the country is dragged there by “Obamacare.” I don’t need to tell you that these are very important choices, and I am a novice when it comes to legislation… but my sense is that we have a solid chance of Nullification on Obamacare this session. If that is the case, we need to have a plan to capitalize on the success to lead the rest of this great country of ours.
Tim Reeves is the State Chapter Coordinator for the Oregon Tenth Amendment Center.
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