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If Only Scott Taylor and The GOP Tried Harder to Reform Health Care
To the GOP 2017 began with a legit chance of defeating public enemy # 1 since 2010, the Affordable Care Act. Speaker Paul Ryan brimmed with a 7-year confidence that his redeeming craft would become law. Then his bill, the American Health Care Act, spectacularly failed in his own House. It wasn’t even voted on. I applaud this failure.
The GOP got complacent – with full power they mocked their base’s idealism by believing that branding the ACA as theirs was all health care reform needed. The AHCA plagiarized 80 percent of the ACA’s framework and stripped basic funding features away. This would have destined the US budget to worsen over time.
Scott Taylor supported the AHCA. His district, the VA 2nd, is my political dream job. Taylor’s support came with the caveat that settling for 85 percent of what is wanted is an example of leadership. That feels hollow, and I think he simply wanted to be seen doing something. I can only project what try to do if I represented the 2nd congressional district.
I believe health care reform requires shoving the most passionate Democrat and Republican ideologues into a committee modeled after 1789’s Constitutional Convention, and the result should stand as solid as the Constitution.
I believe the compromise bill will have Democrats pushing for the full coverage area of Single Payer, while Republicans will push for expanding marketization to reduce health care costs.
Cost reducing regulations will be installed so that all health service providers, like hospitals or smaller patient care centers, will have to post prices up front before purchase. Knowledge of prices strengthens consumer discretion, for instance, last year I only became aware Patient First would charge $138 for a back-pain visit after they mailed me the bill a few months later. Price transparency would reduce costs as I know I’d have shopped around.
Without price transparency, the US will withhold Medicare funding to the establishment. Prices will be made uniform – meaning the posting of one price and charging another result in Medicare sanctions. Sanctions will also apply to health care providers charging higher prices for the same service but to different people – like out of network markups.
Insurance plans will be regulated in such a way that consumers can have advanced customization of coverage. In theory, purchasable plans would begin with basic catastrophic coverage, a low premium, and a higher deductible. Additional coverable items would be individually added – naturally modifying prices of premiums and deductibles. Yes, there’d be an ability to buy out of state plans.
Now for the radical parts. The federal government will be the most significant payer of insurance, but the bill will seek an intense streamlining of programs coupled with a replaced US tax code. The code will take themes from Milton Friedman’s Negative Income Tax.
The starting point reorganizes payroll taxes by inserting them into a lump gross income tax. Business taxes will be eliminated. The gross income tax rates will include income gained from investments, so as an example Warren Buffett would pay a much higher rate but Berkshire Hathaway pays nothing. Assume Buffett earns $1 billion for a year and the new gross rate is 45 percent, then his gross income tax burden is $450 million. Of that $450 million, Social Security and Medicare take their usual 15.3 percent but with a new 70/30 split ($48 and $21 million). Gross rates on lower income levels reduce like in a standard progressive system, but at the lowest rungs, the NIT will apply a subsidy that is larger than the tax burden, hence the “negative” aspect of the system.
The bill creates a nationalized individual health account, and a portion of the NIT subsidy will go toward it. Rand Paul’s ACA replacement had a similar idea. From this account, like with the current Health Care Marketplace account, you’ll be able to choose your insurance plans.
Medicaid will be deleted and Medicare takes up the slack. The higher tax receipts will increase Medicare funding. A market mechanism will also be injected into Medicare so it becomes a fully operational public option. It can be purchasable to even a 30-year-old like myself, with the plan fully customizable. The NIT subsidy will assist in premiums and deductibles.
Assuming there’s still a hole of uncovered individuals, the bill will not penalize them for being planless. In the event of a catastrophe, the individual will have a circuit breaker like inclusion into Medicare’s new base plan. After the individual becomes well a negotiable repayment plan can result similar to student loan finance, while the base plan remains their plan unless they purchase another.
A plan like this would be a better replacement to the ACA than the AHCA tried to be. This hypothetical compromise would truly not please everyone, but it would have sought ideas from everyone.