All We Want for Christmas…

Published December 23, 2009

President Barack Obama and his Congressional allies talk a lot about the need to control health care costs and avoid pressure from special interests. We couldn’t agree more. Too bad the current “ObamaCare” proposals withstand neither litmus test.

The health care and pharmaceutical industries enjoyed unprecedented access to this White House during the crafting of both the House and Senate bills. As the recent WellPoint study indicates, under the Senate proposal costs are expected to increase, not decrease, for most individuals and families well beyond forecast increases under the status quo.

What’s more, there’s no shortage of political carve-outs in the Senate bill—bribes for “on the fence” Democrats to bring cloture to the bill.

Here’s a short Christmas wish list of three things not in any ObamaCare proposal that are absolutely essential for real health care reform.

Cross-State Purchasing

Obama and others have touted a “public option,” government health insurance, as a competitor that would “keep insurance companies honest.” One additional player in the market will do nothing, however, unless of course it has a competitive advantage, a claim these proponents adamantly dismiss as “fear-mongering.” In any case, the new player is unnecessary.

A loose interpretation of the Interstate Commerce Clause currently prevents the purchase of health insurance across state lines. Virtually all other forms of insurance—car, life, home—can be purchased by customers in a national, wide-open marketplace. If health care consumers were afforded the same freedom, individuals and families who reside in one state would be able to purchase more-affordable health insurance domiciled or licensed in another state. Americans would no longer be restricted to the anti-competitive, counterproductive regulations and mandates governing the health insurance markets in many states.

This simple fix would multiply the markets consumers could access by a factor of 50, allowing consumers to choose policies that fit their needs and budgets.

Tax Reform

It’s time to spread the health around. The federal tax code creates a bias favoring third-party payers of health insurance and puts individual purchasers at a disadvantage. This results in health care being owned by the federal government and employers instead of by individuals. Our health care system should empower people to make their own health care decisions, not subjugate them to HR managers and government bureaucrats. A system of refundable tax credits would remove third-party payers from the equation, leaving health insurance and health care decisions to individual consumers.

Tort Reform

Former Democratic National Committee chairman Howard Dean famously admitted medical malpractice reform was left out of the health care reform debate because the authors “did not want to take on the trial lawyers.” But medical malpractice abuse is a primary driver of our nation’s skyrocketing health care costs. There isn’t a single provision in the Democrats’ health care bills to address this.

Malpractice insurance and the need for “defensive medicine” make the practice of medicine unappealing and costly, reducing the number of primary care physicians and increasing costs to consumers. According to the American Medical Association, defensive medicine costs our health care system between $84 and $151 billion every year. In another AMA report, 45 percent of hospitals reported concerns over liability resulted in the loss of physicians or reduced coverage in emergency departments.

The regulatory and spending proposals currently on the table will at best avoid (though more likely exacerbate) the underlying problems of our current health care system. No amount of bureaucratic shell games or grandstanding against special interests will change that.

It needn’t take thousands of words and bitter, partisan battles to enact significant change that will help millions of Americans get affordable health insurance. If the president and his allies in Congress are serious about health care reform, they should start from scratch and consider serious solutions.

Peter Fotos ([email protected]) and John O’Hara ([email protected]) write from The Heartland Institute, a free-market think tank based in Chicago, Illinois. Fotos previously served as a health care policy advisor on Capitol Hill for Sen. Jim DeMint of South Carolina and Congressman Paul Ryan of Wisconsin. O’Hara is the author of A New American Tea Party (Wiley), available January 2010.