Replacing Obamacare

Obamacare mandated coverage and forced the healthy to subsidize the sick. That was unsustainable, especially for the lower paid contributors of this scam. 

Republicans are talking about what they would propose to use as a replacement for Obamacare. They are shifting the cost for indigents from insurance consumers to the federal budget.

Over 50% of the US population is healthy and spends less than $300 a year on health expenses, so these folks will want to protect themselves from catastrophic losses in the case of an accident or random catastrophic illness. Many consumers will choose to remain uninsured. Those who can will choose a high deductible plan to lower the premium and set up a health expense savings account to accumulate enough to pay the deductible.

Paul Ryan is talking about government subsidies for those sick and poor on Obamacare who need subsidies. These are the “really sick” and “really poor” who have very expensive treatment plans for their medical conditions.

Increasing choice of insurance companies will lower prices, but reintroducing a $1 million lifetime maximum on insurance policies would help lower the cost and send a message to providers that there is a bottom to this sand hole. 

Rand Paul says that the replacement plan will reintroduce health savings accounts with IRS 502 items. https://www.irs.gov/pub/irs-pdf/p502.pdf

But Form 1040, Schedule A Deductions still include a 10% hurdle to clear before we can deduct all of our health expanses from our income tax. This used to be a 0% hurdle before the 1986 tax reform changes hit the 1040. We need to return to the 0% hurdle policy, so that health expenses can all be deducted.

None of this will actually reform health care to lower the prices. It will have some effect on prices if patients have no insurance.  These hospital bills have been paid off with monthly payments for years with no interest paid.  These deals are negotiated by the patient with the hospital.

The new Federal Bill will also probably include requirements that health providers disclose their costs before patients receive treatment, so that patients can shop around for better prices. This will help to keep prices lower, but it isn’t really a free market mechanism. 

A real free market solution would require consumers to pay for health expenses out of their own pockets. They would walk away from most expensive treatments and give providers the incentive to reengineer their treatments to lower the costs. We still need to work toward real price control through supply and demand, where higher prices lower demand and higher supply lowers the prices.

Norb Leahy, Dunwoody GA Tea Party Leader