Friday, March 30, 2012

Magic Bullets Part IX

Ruth Bader Ginsburg unwittingly said a most ironic thing during the oral arguments this week regarding ObamaCare: 

"It's a choice between a wrecking operation … or a salvage job," groused liberal Justice Ruth Bader Ginsburg. "And the more conservative approach would be salvage rather than throwing out everything."

Apparently Justice Ginsburg has never tried to renovate a run-down building.  Anyone who has, knows that demolition and starting from scratch are always the most conservative ways to end up with a building that meets the need at the lowest cost.  The only reason to salvage a run-down building is for nostalgia or coercion.   

The healthcare bill known as ObamaCare was itself an attempt to salvage federal control over a mess of tangled laws and regulations dating back at least to the 1940s:
  • WWII wage controls sparked the practice of employer provided health insurance, which killed the individual market.  Businesses could deduct health insurance for tax purposes, and to this day individuals cannot.
  • The McCarran-Ferguson Act of 1945 effectively allowed states to prevent the purchase of out-of-state health policies, giving insurers state monopolies and further trapping individuals. 
  • Then came Medicare, which placed half the medical industry under a socialized system and forced all the profits to come from the other half, driving up costs and largely creating the current “crisis”. 
In other words, “a salvage operation” is what got us into this mess in the first place!   At some point we must stop adding new construction on top of an old run-down building and commence with a “wrecking operation” and then construction of a new modern structure. 

The Supreme Court may give us that opportunity.  If they do, here are some Magic Bullet solutions to fix the healthcare market and solve each of the major problems we have today: 

Question:  Why don’t Americans buy their own health insurance, and why does everyone think health insurance is someone else’s responsibility?
  • Re-establish an individual market by allowing individuals to deduct their health insurance expenses in the form of refundable tax credits.   (With refundable tax credits, lower income individuals who do not qualify for Medicaid, AND don’t make enough to pay taxes, would get a check.  This is only one of many ways to undo the damage from the uneven tax treatment which has gutted the individual market:  See The Healthcare Gecko )

Question:  Why is it that you can buy almost anything you want from another state except health insurance?
  • Repeal The McCarran-Ferguson Act and allow health insurance to compete across state lines.  (Follow the “commerce clause” as it was intended!)

Question:  If Medicare was an outgrowth of everyone getting their health insurance at work (After all, how could we ask retirees to enter the healthcare market for the first time at age 65?) and it shortchanges providers, is rife with fraud, and is bankrupt, do we need it anymore?
  • Repeal Medicare and phase it out for younger Americans who will be accustomed to insuring themselves in the new individual interstate market. 

Question:  Why is it that if you walk into a grocer and steal food, it is an obvious crime.  Yet, if you drive to a hospital in a Ferrari, demand to be treated by a team of doctors, and then refuse to pay, it is not?
  • Make theft of Medical Services a crime. 

Question:  How can we prevent insurance companies from dropping coverage for high risk individuals? 
  • How do we prevent car companies from selling dangerous or inferior cars?  Of course we can’t, but the market, the courts, and some level of regulation do the job quite well. 

Question:  What can be done about pre-existing conditions? 
  • Medicaid must be a viable option for those who become ill while uninsured, or refuse to obtain insurance until after they become ill.  Part of Medicaid’s role should be insurer-of-last-resort, but it should not be free to those who can pay.  

Question:  What about the poor? 
  • Once an individual interstate market is established, Medicaid will be less burdened and easier to rebuild into a better safety net. 

Question:  What about quality, cost, and availability of healthcare?
  • A vibrant individual interstate market is the only way to insure high quality, low cost, and abundant healthcare services in the future.     

Of course, there is a limit to the building analogy when it comes to laws.  Unlike buildings, laws don’t exist as distinct stand-alone entities.  They are more like electricity grids with tentacles going into every aspect of our lives and interactions, and each branch has a vocal constituency demanding it be preserved as is.  Laws almost never get repealed. 

The wrecking operation is going to take a political revolution.  As for the new construction, the market will do that overnight.