The concept of free health care for American citizens is a myth and creates false hope. Under any system that our government adopts, all of us will have to bear the cost of caring for the sick and elderly. Therefore, it is imperative that Congress enact policies which focus on reducing bloated costs and excessive regulations which only serve to hurt all consumers regardless of their income level. I believe that our health care system should foster choice for consumers, maintain flexibility in plan selection and require accountability from all participants.
Make Health Care a Consumer-Driven System. We must migrate away from an outdated employer-based health care system to one where individuals have more control and choice over plans that suit their families. Employers are not – and should not be – in the business of finding suitable health insurance for their workers. The federal government must align the tax code to eliminate huge tax breaks for employer-sponsored health insurance. This exemption for employers is the single largest tax break in the code and increases costs across the board for everyone. Simply put, our own tax code encourages people to have more health insurance than is necessary and favors employer-based coverage over other more suitable types of coverage. Rather than favoring health care spending, I believe in health care savings. Individuals should have a choice over how to spend their health care dollars, much like they retain the ability to handle a mortgage or a child’s college tuition. Health care should not be a tool to discourage people from finding a better job, but too often access to health care results in “job lock.” Access to coverage must not stand in the way of greater opportunity.
Give Individuals Control Over Health Care Dollars, Particularly Through Health Savings Accounts. Health care dollars should be portable. To achieve this, Congress must do more to encourage the use of Health Savings Accounts (HSA). Initial reforms have been a positive step, but we must advance on this early progress. The HSA acts as a personal savings account for medical expenses, and the money deposited into it is untaxed. At any time, HSA funds can be withdrawn tax-free, and unused balances grow tax-free. This is the essence of consumer control and creates positive incentives for all of us. HSAs return decision-making to the health care consumer and reduce waste and bloated administrative expenses. I would support reforming the tax code to permit greater HSA contribution limits. Growing HSAs helps fill the gap in Medicare that is upon us as we fulfill promises made to future retirees.
Congress must also adopt policies that allow health care dollars to be allocated the same way as 401(k) plan benefits. I favor the policy of allowing employers to designate a specific amount of money for their employees’ health care in the form of a defined contribution. Employees can use this tax-free income to make health care decisions they see fit.
For employees who elect not to participate in an employer-based plan, Congress should level the playing field and provide immediate, prepaid, refundable tax credits to these workers. This tax credit can help equalize the big break that our government gives to employers who provide coverage.
HSAs, defined contribution plans and tax credits are necessary components to a health care system based on individual choice and control. Studies are clear that individual choice reduces costs and causes consumers to act more responsibly. Families will have a set of incentives to seek preventive care, disease management and wellness activities, and they won’t be penalized for seeking out smart medicine before a devastating problem arises. We cannot sustain a health care system that is based on perverse incentives, government mandates and inefficient coverage.
Invest in Preventive Care. We can save money in our health care system by supporting and investing in preventive care. For too long, this has been ignored. Our health care system provides no real incentives to treat and seek help for legal addictions, such as tobacco and alcohol use. The use of HSAs, and allowing employers to return health care dollars back to employees, will provide a natural incentive for individuals to utilize wellness programs. This will reduce future medical costs (including prescription drug costs) associated with diabetes, kidney disease and degenerative joint disease. We should also continue to support alternative treatment programs for destructive drug addiction. Successful “drug court” programs reward non-violent offenders for seeking treatment. By treating addictive behavior early on, our health care system benefits from reduced trauma and other health care costs related directly to substance abuse.
Support Cost Containment Initiatives. The costs of unnecessary and excessive regulation are staggering. No industry is more regulated than health care, a sector which represents 1/6 of our nation’s economy. Studies have shown that excessive regulation costs the average family up to $1,500 per year. By eliminating waste and inefficiencies, and by removing the government from every facet of the doctor-patient relationship, families will have more money to seek appropriate care for the sick and the elderly. We also must invest in and support information technology systems which improve record-keeping and allow for more efficient sharing of information. Our health care professionals should never have to reorder tests simply because they cannot locate the right medical file. Sadly, this is all too common and contributes to bloated health care costs.
I would support the following cost containment measures:
- Eliminating excess insurance coverage mandated through the employer-based system;
- Streamlining unnecessary and costly regulation of health facilities and professionals;
- Enacting medical tort reform measures to reduce excessive non-economic and punitive damages awards;
- Reforming the federal Food and Drug Administration approval process so that the costs of bringing safe, new and effective life-sustaining drugs to market are reduced, and so that companies have the incentive to conduct valuable research and development;
- Ensuring that the federal government is not in the business of setting price controls on prescription drugs;
- Removing regulations that ban interstate competition for health insurance; and
- Creating health courts to hear medical negligence claims expeditiously and efficiently, without interference from “hired gun” expert witnesses but with appropriate due process safeguards and state court rights of review.
Americans are famously conservative about their health care. We rejected a single-payer system several years ago and do not want rationed care that is endemic to other countries with a nationalized health care sector. Reform must be comprehensive, but measured. The consumer-driven plan advanced by Senator Tom Coburn (R-OK), the Universal Health Care Choice and Access Act, merits strong consideration by Congress. In addition, certain aspects of the Healthy Americans Act, advanced by Senator Ron Wyden (D-OR), indicate broad, bipartisan support for migrating away from our current employer-based coverage model. Although I would not support certain provisions of that law, Senator Wyden’s proposal presents an alternative that warrants further consideration. I will work hard to enact sensible policies that bring the benefits of competition and choice to our health care system.
For additional reading concerning health care, and the challenges that we face, please read the following informational materials:
(1) April 10, 2007 Heritage Foundation Lecture Transcript
• Senator Coburn discusses on proposed Universal Health Care Choice and Access Act
• Excellent comprehensive proposal on competition-based, consumer-driven system by the leading conservative Congressional voice on health care
• Includes key statistics, as well as discussion on Medicaid and Medicare
(2) December 2006 News Release By Senator Ron Wyden
• Discusses Senator Wyden’s plan on moving away from employer-based coverage health care system
(3) May 2005 Cato Institute Tax & Budget Bulletin
• Excellent short synopsis on the benefits of Health Savings Accounts
(4) February 16, 2001 Heritage Foundation Position Paper
• Summary of ten fixes to expand health care coverage and access
(5) February 19, 2007 McKesson Interview
• Summary of information technology advances in health care sector
(6) October 2004 Cato Institute Policy Analysis
• Summary of costs of health care regulation with abundant statistics