Health Care Doesn’t Need More Government
President Joe Biden is a man with the health care plan(s). He’s promised to shore up the Affordable Care Act with $750 billion, received an endorsement from progressive leader Senator Bernie Sanders (I-VT) for a “public option” health care plan, and announced Medicare-for-All supporter and California Attorney General Xavier Becerra as his pick to lead the Department of Health & Human Services.
Biden’s approach to health care contrasts sharply with Republicans, who famously couldn’t repeal the Affordable Care Act in 2017 despite having control of Washington’s levers of power. The party was lambasted late last year by The Wall Street Journal and former Louisiana governor Bobby Jindal for not coming together behind an alternative to Biden’s progressive platform.
But where Republicans struggle to offer alternatives to Biden’s socialism and socialism-lite plans, the private sector is delivering. Dean Clancy’s “personal option” is a plan which puts more money and power in the hands of workers by expanding Health Reimbursement Arrangements (HRAs) and Health Savings Accounts (HSAs). HRAs provide a tax-free allowance from employers to cover health care expenses, while HSAs are tax-free savings accounts for additional out-of-pocket health care expenses. And best of all, both HRAs and HSAs are portable, meaning that today’s transient employees can take the accounts with them from job to job.
HRAs and HSAs were created by government to free people from our broken insurance and government-influenced health care system -- just like low tax policies are government-created freedom from giving the IRS more control over your purse or wallet. Clancy’s personal option combines HRAs and HSAs to reduce workers’ health care tax burdens, give workers money to spend if uninsured between jobs, and help workers avoid expensive COBRA plans while between jobs. By giving patients access to personalized, portable health care dollars, the option also provides average people the opportunity to pursue meaningful work instead of settling for a worse job because of health care benefits. Millions of people feel this pressure; tax-free health care dollars and employer-funded -- but employee-chosen -- health insurance lets patients make better choices for their individual circumstances.
Another alternative to Biden’s public option is Direct Primary Care (DPC), which provides low-cost monthly memberships to DPC patients. DPC memberships make everyday care affordable without insurance, and the results are overwhelmingly positive. A 2020 study by the Society of Actuaries shows that patients at a DPC practice had 40% fewer ER visits and sought 12% less overall care than patients who used traditional insurance. Additionally, DPC practices reported a short average wait time of 4 minutes, with appointments often being made within the same day. Many DPC patients feel closer to their doctor, since they receive 38 minutes of physician care, over twice the national average of 17 minutes.
This growing model of care is held back in some states by confusion as to whether DPC is part of the insurance market. Governors, regulators, and lawmakers can easily free DPC physicians and their future patients from uncertainty – and give everyone better care – through simple clarity…not the burdensome regulations which are often the government solution to market challenges.
The personal option and DPC are two robust health care plan alternatives, but their political support is often from free-market advocates. This may limit their short-term, wide-scale implementation. However, again, the free market provides. Telemedicine is a well-known practice which recently took off in response to the COVID-19 pandemic and the related lockdowns which limited in-person care. The permanent application of emergency government allowances which increased telemedicine availability should be made permanent because every demographic benefits. Thanks to telehealth technology, patients no longer have to wait on a doctor’s office to meet social distancing standards or wait in long lines for short appointments. You can talk to your doctor from your kitchen table, something that is especially important for COVID-risky people, patients with chronic illnesses, city dwellers without cars, and families in rural areas without access to a doctor. All of these people can connect at a moment’s notice with a provider when something goes wrong, and for regular check-up for preventive care.
One critical change state lawmakers and governors should make to increase telemedicine access and other critical care is cross-state licensing for doctors. Emergency licensing reforms have already proved valuable during the COVID-19 pandemic, allowing doctors in good standing to provide emergency care and telemedicine in other states. Outside of a pandemic situation, if patients have a trusted doctor but have to move due to work or other reasons, their doctor could provide telehealth services no matter which state they live in. And while they’re at it, being allowed to choose insurance across state lines could help even further. Cross-state insurance competition reduces oligopolies, drives down costs, and gives patients access to better health plans.
A final measure that has limited financial implications but massive political benefit is competition to reduce prescription drug prices. Generic drug alternatives break up prescription monopolies, which gives greater access to patients who can’t afford name-brand medications. The Food & Drug Administration found that the Average Manufacturer Price (AMP) of a just one generic drug alternative is 39% less than brand name drugs, and the more competition, the more savings. When six or more companies produce generic drug alternatives, the cost is over 95% less than name brand drugs. Generic drugs are a great cost-saving alternative to Biden’s price control plan, which proposes to artificially reduce name brand drug prices. Unfortunately, like former President Donald Trump’s price ceiling plan, Biden’s plan costs more in the long term, with pharmaceutical companies taking the fall for the artificial price reductions, thereby cutting out the funding necessary for new medical innovations. And if America, the world leader in innovation, doesn’t keep innovating, everyone will be stuck with ineffective, old drug treatments rather than the life-saving medications we need during and after the pandemic.
As is often typical, the Washington approach to complex problems is to either foist money and government on the problem or rely on one-liners to hide a lack of leadership. Patients need none of it. All they need is for government to provide legal clarity in some cases and simply get out of the way in others. The free market will take care of the rest.
Dustin Siggins is founder of Proven Media Solutions