Health Care Needs Free-Market Reform, Not Single-Payer

Health Care Needs Free-Market Reform, Not Single-Payer
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In the months leading up to the 2018 election, Democrats shifted their focus to health care, accusing Republican candidates of secretly plotting to destroy Obamacare and to end protections for people with pre-existing conditions. Democrats spent more than $184 million on campaign ads discussing these issues in the midterms, with many calling for the creation of a new single-payer health care model comparable to Sen. Bernie Sanders’ “Medicare for All” plan.

The Obamacare scheme has unquestionably failed to provide Americans with affordable health insurance. Premiums have increased nearly 140 percent since the Affordable Care Act exchanges first opened, from $232 in 2013 to $555 in 2018. Even worse, deductibles have grown so high that most middle-class families can’t afford to use their plan, even if they receive generous subsidies to help pay for the high premiums. An analysis by HealthPocket found the average deductible for an Obamacare Bronze family plan in 2018 is $12,186.

Democrats say the solution to these problems is to increase the power of the very same government that created the crisis in the individual health insurance market, and to do so by spending trillions of dollars the federal government doesn’t have. Researchers at the Mercatus Center say Sanders’ plan would cost $32.6 trillion in its first 10 years, a cost so exorbitant the government couldn’t pay for it even if it were to double all corporate and individual income taxes. This is especially troubling considering that the federal deficit for fiscal year 2018 was a whopping $782 billion.

While Democrats work to dramatically grow the size of government, the Trump administration is putting into place numerous health insurance reforms that could soon save families hundreds or even thousands of dollars per year.

On October 22, the Department of Health and Human Services issued a new guidance that will give states greater flexibility when determining which health insurance plans can be offered on exchanges. Under the Obama administration, only those health insurance plans that include “essential health benefits”—such as maternity care and drug and substance abuse services—can be sold on the exchanges, the only place where Americans can purchase insurance coverage using Obamacare subsidies. The essential health benefits mandate unnecessarily increases the cost of insurance because it forces people to buy coverage they may not want or need. A 2017 analysis from HHS estimates that without mandatory benefits and Obamacare’s other costly regulations, health insurance could be as much as 78 percent more affordable for working families.

The Trump administration’s new guidance will let states apply for a State Relief and Empowerment Waiver that would allow them to permit health insurance companies to sell insurance plans on Obamacare exchanges that do not include essential health benefits, so long as they also offer other plans that do include the benefits. States could also free up insurers to offer short-term, limited-duration plans, which, thanks to a rule change issued by the administration earlier in 2018, can be sold for terms as long as 12 months (compared to just three months under the Obama administration) and can be made renewable for as many as 36 months.

Short-term health insurance plans and traditional health insurance plans that do not include essential health benefits will be much more affordable than the plans currently being offered on the exchanges. And because consumers will be able to use subsidies to pay for these plans under the Trump administration guidance issued in October, many plans could be made available for less than $100 per month. Some people might even be able to purchase short-term plans at close to no cost.

Given that Democrats will soon be in control of the House of Representatives, the only hope Americans have of gaining greater access to more affordable health coverage is for their states to work with the Trump administration to enact these and other free-market reforms. Expanding the power of the federal government by imposing a single-payer health care system will only make the current failing system much worse.

Justin Haskins (jhaskins@heartland.orgis the executive editor of The Heartland Institute and the co-founder of Charlie Katebi (ckatebi@heartland.orgis a state government relations manager at The Heartland Institute.

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