Friday, May 21, 2004
Consumer driven health care an answer to the uninsured
[Nina Owcharenko, "Curing Health Care with Choice," The Heritage Foundation, 19 May 2004.]
The dust is settling from the media attention surrounding "Cover the Uninsured Week," but what is there to show? Heritage Foundation policy analyst Nina Owcharenko offers some insights on what is left to do:
Last week's "Covering the Uninsured Week" brought a slew of ideas from across the health care policy spectrum. Politicians and activists offered a variety of solutions to help reduce the troubling number of Americans without health insurance (about 43 million people, roughly one out of every seven). Unfortunately, their proposals are just more of the same.
They either offer a piecemeal approach that would make only minor adjustments to current policy, or they rely on the existing, fractured health care system to promise change. Either way, they leave untouched the root of the problem: the continued absence of personal choice and control of health care options.
While some consumer-directed efforts are emerging within the employer-sponsored health-care system, what is really needed is a more aggressive and comprehensive approach to reform. One that offers a fresh perspective that would revolutionize the health-care system. A system based on personal choice and freedom.
There are two fundamental changes that are needed to take place in order to jump-start a health care revolution:
1. Fix the tax treatment of health care. The tax code provides unlimited tax relief for the purchase of health insurance, but only through the workplace. As it turns out, lower-wage workers, particularly those in small firms, get less tax relief than high-wage workers. And if an individual goes outside the place of work to buy a health plan, he or she must do so with after-tax dollars, which often makes the cost of a plan prohibitive.
Ideally, current tax exclusion for employer-based health care should be replaced with a national system of refundable health care tax credits, with more help going to those with need it the most. In the short term, offering low-income individuals and families a health care tax credit would enable them to obtain their own health care coverage, regardless of their place of work or work status.
2. Design a consumer-friendly marketplace. In order for individuals to become more involved consumers of health care, there needs to be a marketplace where individuals are able to select from a wide variety of plans that best meet their individual needs.
Unfortunately, some states have over-regulated their markets, making coverage less accessible and less affordable. So the first step for policy-makers should be to encourage states to fix their markets to better serve consumers.
"Covering the Uninsured Week" is over, but the problem remains. And while politicians deserve some applause for trying to deal with it, the solutions they've offered so far don't go far enough. Half-measures relieve some symptoms for a while — but they can never really cure.
[Nina Owcharenko, "Curing Health Care with Choice," The Heritage Foundation, 19 May 2004.]
The dust is settling from the media attention surrounding "Cover the Uninsured Week," but what is there to show? Heritage Foundation policy analyst Nina Owcharenko offers some insights on what is left to do:
Last week's "Covering the Uninsured Week" brought a slew of ideas from across the health care policy spectrum. Politicians and activists offered a variety of solutions to help reduce the troubling number of Americans without health insurance (about 43 million people, roughly one out of every seven). Unfortunately, their proposals are just more of the same.
They either offer a piecemeal approach that would make only minor adjustments to current policy, or they rely on the existing, fractured health care system to promise change. Either way, they leave untouched the root of the problem: the continued absence of personal choice and control of health care options.
While some consumer-directed efforts are emerging within the employer-sponsored health-care system, what is really needed is a more aggressive and comprehensive approach to reform. One that offers a fresh perspective that would revolutionize the health-care system. A system based on personal choice and freedom.
There are two fundamental changes that are needed to take place in order to jump-start a health care revolution:
1. Fix the tax treatment of health care. The tax code provides unlimited tax relief for the purchase of health insurance, but only through the workplace. As it turns out, lower-wage workers, particularly those in small firms, get less tax relief than high-wage workers. And if an individual goes outside the place of work to buy a health plan, he or she must do so with after-tax dollars, which often makes the cost of a plan prohibitive.
Ideally, current tax exclusion for employer-based health care should be replaced with a national system of refundable health care tax credits, with more help going to those with need it the most. In the short term, offering low-income individuals and families a health care tax credit would enable them to obtain their own health care coverage, regardless of their place of work or work status.
2. Design a consumer-friendly marketplace. In order for individuals to become more involved consumers of health care, there needs to be a marketplace where individuals are able to select from a wide variety of plans that best meet their individual needs.
Unfortunately, some states have over-regulated their markets, making coverage less accessible and less affordable. So the first step for policy-makers should be to encourage states to fix their markets to better serve consumers.
"Covering the Uninsured Week" is over, but the problem remains. And while politicians deserve some applause for trying to deal with it, the solutions they've offered so far don't go far enough. Half-measures relieve some symptoms for a while — but they can never really cure.
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