Post-Obamacare Reform

The time is overdue to get alternatives into the public consciousness.

failureFor all of the daily noise about the latest casualties of the Obamacare train wreck (Senator and Obamacare author Max Baucus’ term), from the nonpartisan Congressional Budget Office (CBO) predicting major long-term damage to employment markets to the President’s illegal delay of the black-letter provisions of the employer mandate, there is very little public discussion of what to do about all of it. The time is overdue to get alternatives into the public consciousness.

Obama and the Democrats love to say that Republicans never offered any alternatives to the Patient Protection and Affordable Care Act, a.k.a. Obamacare.  They pretend to ignore the proposed Patient's Choice Act of 2009, the Empowering Patients First Act of 2009, the Patient Option Act of 2013, the American Health Care Reform Act of 2013, and now the Burr-Coburn-Hatch plan, a.k.a the Patient Choice, Affordability, Responsibility, and Empowerment Act, a.k.a. the Patient CARE Act (PCA), to name a few. They get away with this feigned justifiable ignorance because they know that the dominant media will hardly give those proposals any ink, tweets or air time, even to let the public know that they exist.

There are plenty of options for healthcare reform besides the ACA, as even Obama tacitly acknowledges every time he issues another royal decree in contradiction to the law’s (rare moments of) plain, unambiguous language; and we will have to discuss them in order to repair the damage left behind by this law and renew the world’s best medical system. Let’s first take a look at what is perhaps more important than the individual proposals themselves: the principles upon which reform should be based.

Principle Number One: Incremental (as opposed to comprehensive, all-or-nothing, take-it-or-leave-it) reform. Each policy should be a net positive in and of itself, a move in the right direction rather than a costly kludge that has to be offset somewhere else in the tangled web of taxes, fees, accounting gimmicks and legalese.

One of the biggest problems with Obamacare, as with the immigration reform and too many other bills besides, is their sheer size and scope. No one can read it apart from a handful of unaccountable ‘experts’ to whom we are supposed to surrender our common sense, our money and our liberty. We’re still learning, four years later, what’s in the Obamacare ‘law’.  And then when we do look at individual elements, whether actually in the law or made up after the fact, they are almost all negative: taxes, penalties, prohibitions, exemptions, delays, arbitrary and capricious power granted to unaccountable officers and boards, cost shifting (or it is SHAFTing?) to those least able to protect their interests by hiring lobbyists.

An important aspect of the policy proposals that I list below is that each of them can be taken on its own as a stand-alone bill, to be proposed, debated in the light of day, and voted up or down more or less independently of the others. If one seems less important or less urgent than others, we don’t have to get bogged down; we can come back to it later while we pass the low-hanging fruit. Let the political horse-trading be expressed by the ordering and prioritizing of policies in separate bills, rather than in Cornhusker Kickbacks buried in the omnibus bill cooked in the smoke-filled back room.

Principle Number Two: Empower consumers, patients, families, physicians, insurance companies, counties and states -- in that order -- not the federal government and the Department of Health and Human Services (HHS). At this point in our big-government evolution, solutions consist largely of divesting power from Washington and returning it as far as possible to the individual citizen.

Principle Number Three: Free markets. Private property and limited interference from government results in the best products at the lowest prices for the largest number of people. Think iPhone; apply to health care. We need a market environment for healthcare that is just as free and dynamic and innovative as that for computers and orange juice and mutual funds and automobiles and beer. Consider that the reason we have such contention over immigration policy is that America, because of Capitalism, has become the most attractive place in the world for people to live and work. The US healthcare system, for all its warts, was until 2010 the best in the world because it was the freest.

Principle Number Four: Use the ‘Bush/Romney Standard’: That is, we should not give any powers to Barack or Bill or Hillary that we wouldn’t be equally eager to give to President Bush or President Romney, to say nothing of President Cruz. You wouldn’t let them raid Medicare to the tune of $760 billion or make the rules up as they go along.

Discretionary powers should be clearly and explicitly enumerated, and those not so enumerated must be assumed not to exist; in other words to require the legislation and/or approval of the people’s representatives in Congress.

Principle Number Five: Get out of the way of the unmatched generosity of the American people to help each other.

Private, voluntary charity is not a failure; it is a blessing to be honored and cultivated. Americans donate more of their time, talent and treasure than any other nation, through their churches, synagogues, non-profits and other voluntary organizations. They serve the poor and the disadvantaged that they know personally, without need for nor interference from bureaucratic codes and protocols. They do this without demanding salaries, benefits, job security and unfunded defined-benefit pensions that are demanded by our public employee unions who run our government programs.  Voluntary giving is many times more effective and efficient than government-run poor relief and creates no burden on the economy or public finances. It is an important and integral part of the solution for which we make no apologies.

Principle Number Six: Envy is not a principle.

With these principles in mind then, the specific policy proposals include but are not limited to the following:

Promote competition among insurance companies across state lines without interference or dictation from state insurance commissioners. If we can buy oranges from Florida, mutual funds from Tokyo and wine from France we should be able to buy financial products like insurance from whomever gives us the best deal. As I have written before, those products are relatively freely sold in highly competitive markets across not just state lines but national borders. Health insurance, on the other hand, for decades prior to Obamacare, has been sold in severely and increasingly constrained markets, dictated to by 50 different state insurance commissioners, each with his own favorite list of mandatory coverage provisions. Competition and innovation have been crushed under the jackboot of bureaucracy and compliance. Patient-consumer choice has been reduced. If any plans are "sub-standard", "lousy", “cut-rate” or "bottom-feeding", as Obama and his supporters like to say, that’s why.

In a truly free market, many more people than today would be able to find a plan that works for them at the intersection of their needs and their means, with consumer reports, reviews on social media and word-of-mouth from friends and family members to guide them. Companies that offer products and services in free markets live and die by their reputations. In the era of Facebook and Twitter, no insurance company could survive if a significant number of its customers assessed its products and services as "sub-standard", "lousy", or "bottom-feeding". We need competition, not control, to bend the cost curve downward.

Eliminate the mandates and let consumers negotiate with insurance companies for the features they consider essential (or not).

In particular, re-open the market permanently to low-premium, high-deductible catastrophic coverage plans which are the baseline standard for all true 'insurance'.

Not everyone needs coverage for maternity services, contraception, fertility treatments, quitting smoking, acupuncture, hair plugs, chiropractic, naturopathy or massage therapy. But by mandating these services and more, regulation drives up the cost of plans unnecessarily while potentially denying consumers access to things they need and want more urgently, like better customer service, lower prices, coverage for other conditions not mentioned in Obamacare or greater catastrophic coverage – or just more insurance companies willing and able to participate in the market.

Mandates are a dead weight on the economy, causing costs to rise unnecessarily, making us all (especially us 99%) poorer.  In 2012, the 6 most expensive states (average family premium per enrolled employee for employer-based health insurance) had premiums on average 28% higher than the 6 least expensive states ($17,167 vs. $13,387) and 43% more mandates (48 vs. 34) [Sources: Kaiser Family Foundation and Council for Affordable Health Insurance].

If the consumers want something covered, they will demand it anyway by their buying and not buying, preferring the offerings of one company and plan over those of others. If consumers don’t want it, it’s an extra unnecessary expense, no different economically or in terms of moral hazard than compelling non-smokers to buy cigarettes; might as well smoke ‘em if they’re ‘free’. Either way, the army of bureaucrats needed to enforce the mandate, with their guaranteed salaries, iron-clad job security and (unfunded) defined-benefit pension plans – not to mention health care – must be paid for somehow (hello taxpayer and grandchildren). Mandates are taxes dishonestly imposed. We should have no taxation without honest representation.

Repeal the medical device tax, the Medicare tax, the new 2014 tax on small-business and individual-market health insurance premiums and all the other taxes that only serve to destroy innovation and make healthcare more expensive to everyone now and forever.

Promote Health Savings Accounts (HSAs) and Flexible Spending Accounts(FSAs). These help people pay for medical expenses with pretax dollars and encourage people to spend health care $$ wisely.

No one spends other people’s money more wisely than they spend their own.  The cost curve will be bent downward to the degree that resources and decision-making power are pushed back to the people to whom it makes the greatest personal difference.

Reform the tort liability legal casino so that doctors don't have to spend a hundred thousand dollars apiece fighting frivolous lawsuits (which 90% of malpractice suits are found to be). Doctors should only order costly and/or hazardous tests if they are in the patient’s best interest, not because they need to triple-cover their own legal backsides.

Texas put a cap of $250,000 on non-economic damages in 2003 and reduced the number of cases by over 80%, and the number of physicians attracted to practice in the state increased 18% in four years.

Implementing ‘loser-pays’ laws, in which any plaintiff filing a claim found to be baseless must pay the legal costs of the defendant, would bring restraint to this out-of-control arena of legalized extortion.

Make all health plans and medical expenses tax-deductible from the first dollar. Level the playing field between individuals and employers, because World War II is over and we thought we won.

Our current model of employer-provided health insurance dates from WWII when wage and price controls led employers to resort to non-wage benefits to attract workers (now where’s a great law like that when we need one? – MAXimum wage laws!). There is no moral or economic justification for letting one group of Americans deduct medical expenses from taxable income and others not.

Allow physicians to take a tax deduction or credit for services rendered pro bono (serving the poor and/or uninsured), without micromanaging their work. If we want the poor to be served, encourage it.

Eliminate government subsidies for unhealthy products like sugar, corn syrup and tobacco (yes, you read that right; in spite of all the government anti-smoking campaigns, tobacco growers received $1.3 billion in subsidies between 1995 and 2011).

Abolish the IPAB. This is the Independent Payment Advisory Board, created by the ACA. Its members are as unaccountable as members of the Fed – the Federal Reserve Banking system – and all they can do is issues price control edicts and deny care.  There’s a reason they are called the ‘death panel’.

Reform Medicaid according to the terms of its own mission.

If you ask the average intelligent Joe what Obamacare was supposed to accomplish, he might reasonably answer, provide health coverage for the very poor, uninsured and uninsurable. Well guess what? That’s what Medicaid was supposed to do! Only problem is, it’s a failure. A recent study demonstrated that people with no insurance at all had better health outcomes than those covered by Medicaid.  If we insist upon helping the poor through a federal government program, then let’s fix the program that has been targeted at the poor for almost 50 years.

Medicaid does best in the states where it is block-granted rather than micromanaged by the Feds. And States that take the money and buy insurance for the poor do even better.

Finally, Honor the Medical License.

There is a reason we confer licenses of different degrees of authority and responsibility upon people who have dedicated decades of their lives and hundreds of thousands of dollars of debt to medical education, training, internships, residencies and professional practices.  In economic terms, it is a cost saving mechanism. We do it precisely because no matter how well the website works or how brilliant our genius leaders in Washington and their cadre of lawyers are, there is no way that they can know everything about medicine and every patient in the country. We need trained professionals that we can trust to make the correct judgments in the field better than anyone else possibly can, regardless of what the computers and MBA’s flowcharts say.

The Nobel laureate economist Milton Friedman was opposed to government licensure of physicians.  Most physicians and many right-thinking people consider that view to be ludicrous; of course we need a recognition of the highest levels of professionalism; otherwise, who will protect us from charlatans and quacks? But the  government seems increasingly uninterested in using licensure as a way of delegating and trusting, and more as a sucker’s game; a means to controlling, micromanaging and manipulating. It's about power, not about doing the right thing.

Traditionally in America, doctors have been self-employed, running their own practices and referring within a circle of reputable colleagues.  But the overwhelming trend now is herding the majority of doctors into employee roles at big hospital corporations and Accountable Care Organizations or ACOs (anyone on the anti-corporate Left paying attention?). A provision of the ACA actually prohibits doctors from pooling their resources to be owner-investors in new hospitals. Lawyers and hedge-fund managers are welcome, but physicians need not apply.

In other words, those with the most knowledge of medicine in general and their own patients in particular are being stripped of their power by those with the most ambition and the most Harvard Law degrees.  This is not an improvement for the American health care system or for patients.

We must eliminate the mandates that require doctors to suppress their own professional experience and judgment to comply with cookie-cutter protocols, Electronic Medical Records (EMRs) and codes dictated by Washington bureaucrats who are without any medical training or knowledge of the individual patient.

Right now as you are reading this, individual doctors and patients, churches, citizens, foundations and insurance companies are finding the solutions all across this great country of ours.  That is the solution, not Washington D.C.


Obamacare is  now a dead letter.  If its 2,700 pages of ‘law’ and 20,000 pages of regulation do not mean what they say but only what Obama or Sibelius say that they say depending upon their transient mood and the shifting political winds of the moment, then it means nothing and doesn’t even have to be formally repealed in order to be gotten past. We can ignore it and move on. The task for us, citizens and our representatives, is to construct an alternative system, one brick at a time, major priorities early, improving with each increment, without Rube Goldberg contradictory constructions, violations of the sovereignty of the individual and of the patient-doctor relationship, or massive and dangerous concentration of centralized power. The greatest health care system the world has ever known can yet be greater than it ever was.

It begins with We the People. It begins with liberty.

Howard Hyde is author of ‘Pull the Plug on Obamacare’, available in Kindle and paperback editions from He edits the website Email: [email protected] Follow on Twitter: @HowardHyde.

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