It makes no sense to tell a young, moderate income worker who wants to buy $1,000 of catastrophic health care coverage that he must buy a more expensive policy costing $3,000 -- admittedly with a $1,000 rebate from Uncle Same -- or face a $1,000 tax or “penalty.” As long as medical and financial catastrophes are covered, why should we force him to buy more health care than they really want? Especially when doing so increases the demand for medical services that may not actually be needed, but which may be utilized simply because they are "free" or at least already paid for. It's like forcing someone on a diet to get the full five course-tasting menu, when all they really want (and need!) is soup and a salad.
The same thing goes for the employer mandate. If an employer is willing to pay $1,000 per employee to subsidize or provide a catastrophic policy, supplemented perhaps by a health savings account, why force the employer to ratchet that up to $3,000, at the risk of a $2,000 penalty. In many cases the employer will take the path of least resistance and simply opt-out of a health and wellness program that may be the best available solution both financially and in terms of wellness.
Insurers, as well, should then be forced to offer only catastrophic health insurance policies to all comers, without regard to preexisting conditions. Only this way will we restore the concept of “price” to medical decisions at the level of the individual physician and patient. That is the only rational way to keep costs under control, while keeping control over medical decision making in the hands of physicians and patients.
This won’t be repealing Obamacare – it will be restoring it to the president’s original vision.
2. Restore LBJ's original requirement of a 20% co-pay to bring Medicare closer to solvency
By the same token, Medicare costs need to be reduced to avoid national insolvency. A solution that should be politically acceptable to all would be to return to the plan as LBJ designed it in 1965 -- with mandatory 20% co-pay. For every dollar charged by a physician or hospital, the patient was required to pay twenty cents, something most of us face in our private insurance plans.
Unfortunately, health insurers were allowed to eliminate this important cost-saving feature by offering “Medigap” policies that eliminate the co-pay. But the result is not a zero sum game. While insurance companies profit from selling more insurance, and the elderly as a group pay and receive about the same amounts, there is no longer any incentive for the patient and doctor -- at the point of purchase -- to consider the cost-benefit ratio of every additional procedure.
By restoring the deductible – eliminating Medigap insurance – the elderly as a group won’t pay a dollar more for health benefits. But the result will be lower health care costs for all, since we won’t be overusing the system thinking that each marginal procedure is “free”. This change clearly won’t be eliminating “Medicare as we know it” as some like to say. This will merely be restoring Medicare to LBJ’s sound, original plan.
Increased government regulation of healthcare has increased costs by progressively increased red tape and central planning bureaucracies. The ACA will only lead further inefficiencies and ultimately rationing by that same central planning bureaucracy.
Dr. Oskoui is associate clinical professor of medicine at Georgetown University School of Medicine