Health Care Needs Market Solutions, Not More Gov’t

Published August 1, 2009

Health care reform has been a central goal of The Heritage Foundation since our creation more than three decades ago. We believe putting families, not the government, in control of the system is the key to success. We want to strengthen our health care system based on that principle.

There are legitimate concerns about what the White House has proposed this year. Americans need to understand the implications of the competing proposals, whether from the White House, Capitol Hill, industries, think tanks, or from interest groups.

False Advertising

Importantly, some proposals by the White House are being advertised on false premises.

Here are a few examples:

If you like your health care package you can keep it. President Barack Obama says a “public option”—a government plan—would just be one of many health care plans Americans could select. Actually, a public plan will lead many employers to drop private health coverage for their workers and dump them into the public plan—just as many employers in the 1990s pushed their workers into cheaper managed-care plans.

Further, many in Congress are eager to expand a public plan, with tight rules on what your doctor can do and how much he or she will be paid. There will be no “level playing field.”

We believe a public option will toll a death knell for private plans.

The end goal is not a single-payer system. This is another Washington euphemism that confuses people. Let us all be clear: The “single payer” here is the taxpayers, with Uncle Sam calling the shots and deciding what care every American will get—or not get.

The proposals are deficit-neutral. The president asserts a government system will be fully financed. However, analysts, including the nonpartisan Congressional Budget Office, have issued preliminary estimates the cost could be high as $2 trillion over 10 years. The nation’s families will be forced to bear these new costs.

The quality of your health care will improve. One need only look at current government health programs to test this premise. Medicare has huge gaps in coverage. Medicaid’s quality is notoriously bad. They both offer substandard care compared to most private insurance plans.

These persistent deficiencies are routinely overlooked in discussions of a government health plan. Instead of fixing Medicare and Medicaid, the government proposes to make these programs the foundations of a universal plan.

Prescription for Improvement

Opposing bad ideas is not enough, of course. We need to fix the gaps in our health care system and lower costs for Americans. The nation needs health care reform, not health care micromanaged by the government.

Specifically, a plan for fundamental, effective health care reform would do the following:

Give families control of their health care. We need to let families choose the coverage they want. For this to happen, private health insurance has to be portable, owned by the individual or family so they can take it from job to job.

The health care system we have today was conceived in the World War II era, when many Americans worked for the same company all their lives. That is not the case today.

But we do not need a public plan, or mandates on businesses, to have portability. We need changes in government rules and the removal of tax penalties, to allow families real choice and ownership.

Reform the tax system. Portability requires tax reform. Right now, families can get a tax break for their insurance only if they hand over control of their insurance to their boss and leave their plan behind if they change jobs.

That needs to change. In a world of empowered families, plans would have to compete to satisfy customers, not compete to cut costs for employers.

Bring on competition. Americans will get quality health care only through the mechanism that has given us quality in all other aspects of life: competition. The way to get quality care is to have insurers compete to satisfy families in an insurance market, one that provides transparent information, ease of delivery, and quick results, and which is fair to families and their doctors.

Members of Congress pick and choose plans in such a market. The rest of the nation should also have that right.

Recognize states know better than Washington. The challenges of organizing and delivering health care vary greatly across the nation. Rural Mississippi is not the same as midtown Manhattan. States have always been smarter than Washington at figuring out how to get the job done.

To the extent government must play a role, the states should take the lead in devising the best ways to reach our national goals. The last thing we need is one-size-fits-all health care.

Empowering Consumers

A reckless, expensive, and one-sided rush toward “reform” would not only be damaging to our public discourse, but it could fundamentally change our society in ways that have far-reaching consequences.

Rather than expanding the failed central-planning approach to health care, with the government controlling who gets what, let’s ensure access to affordable health care for all Americans. Let’s use the tried and tested approach of the empowered consumer in a truly competitive market.

Edwin Feulner, Ph.D., is president of The Heritage Foundation. This article originally appeared on the Heritage Foundation’s Web site, Reprinted with permission.