Opinion

Let’s repeal and replace Obamacare

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John Goodman
Senior Fellow, Independent Institute
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      John Goodman

      John C. Goodman is Senior Fellow at the Independent Institute and author of the award-winning and widely acclaimed and award-winning book, Priceless: Curing the Healthcare Crisis from the Independent Institute. The Wall Street Journal and the National Journal, among other media, have called him the “Father of Health Savings Accounts.”

      Dr. Goodman is frequently invited to testify before Congress on healthcare reform, and he is the author of more than fifty studies on health policy, retirement reform and tax issues plus ten books, including Living with Obamacare: A Consumer'sGuide; Lives at Risk: Single Payer National Health Insurance Around the World (with Gerald Musgrave and Devon Herrick); Leaving Women Behind: Modern Families, Outdated Laws (with Kimberley A. Strassel and Celeste Colgan); and Patient Power: Solving America's Health Care Crisis, that sold more than 300,000 copies. His other books include The Handbook on State Health Care Reform, National Health Care in Great Britain: Lessons for the U.S.A., Economics of Public Policy: The Micro View (with Edwin Dolan), Fighting the War of Ideas in Latin America, and Privatization.

      He received his Ph.D. in economics from Columbia University, he has been President and Kellye Wright Fellow in Health Care at the National Center for Policy Analysis, and he has taught at Columbia University, Stanford University, Dartmouth College, Southern Methodist University and the University of Dallas. In 1988, he received the prestigious Duncan Black Award for the best scholarly article on public-choice economics.

      Dr. Goodman regularly appears on television and radio news programs, including those on Fox News Channel, CNN, PBS, Fox Business Network and CNBC, and hisarticles appear in The Wall Street Journal, Investor’s Business Daily, USA Today, Forbes, National Review, Health Affairs, Kaiser Health News and other national publications. He was also the pivotal lead expert in the grassroots public policy campaign, “Free Our Health Care Now,” an unsurpassed national education effort to communicate patient-centered alternatives to a government-run health care system. The initiative resulted in the largest online petition ever delivered on Capitol Hill.

Now that the Supreme Court has declined to strike down the Patient Protection and Affordable Care Act (Obamacare), the time has come to repeal and replace the entire law. Here are five reasons to do so.

1.) The health reform law is a Rube Goldberg contraption that no one can explain. The reason: It was the result of a special interest compromise, with each group claiming a slice of a 10-year, trillion-dollar pie. Big Pharma’s collusion with the White House to pass Obamacare is just one of many examples of how crony capitalism tried to shape our health care system.

2.) The law is not paid for. The Congressional Budget Office (CBO) estimates that $523 billion of health reform’s first 10-year cost will be paid for by spending cuts on Medicare enrollees. That means that over half the costs of this reform will be borne by some of the most vulnerable Americans: the elderly and disabled. The Medicare chief actuary’s report explains that as a result of Obamacare, half the seniors in Medicare Advantage plans (7.5 million) will lose coverage and the remainder will face higher premiums and benefit cuts. Nearly one in seven medical facilities is expected to become insolvent and drop out of Medicare altogether in the next eight years. Medicare patients will have increasing difficulty finding a doctor who will see them.

3.) The law will impose heavy costs on employment at the very time we can least afford it. Employers of $15-an-hour workers will be forced to buy insurance whose cost (for a family) will equal half the employees’ wages. The uncertainty the law creates is already making employers reluctant to hire new workers and is contributing to our anemic economic recovery.

4.) Obamacare institutes a bizarre system of subsidies that will prove extremely disruptive to American businesses. The law offers radically different subsidies to people at the same income level, depending on where they obtain their health insurance — at work, through a health-insurance exchange (a state-regulated health insurance market) or through Medicaid.

Generally, the more money you make, the greater the subsidy at work and the lower the subsidy in the exchange. Therefore, low-income workers will seek work from companies that do not provide insurance, while high-income employees will seek out employers who do. Firms that ignore these worker preferences will not survive, meaning companies and entire industries will be forced to reorganize as they compete for labor. The subsidies and accompanying mandates will cause millions of employees to lose their employer plans and potentially their jobs. At a minimum, these subsidies will incite a huge, uneconomical restructuring of American industry.

5.) Obamacare’s approach to health care delivery is bureaucratic and top down. The law creates a slew of pilot programs in an attempt to make health care more efficient. Yet in three separate occasions, the CBO has found these demonstrations are not working.

The time is ripe for health reform that liberates patients and doctors and encourages innovation and creativity along with real prices and a real marketplace. It’s time for a consumer-driven system of care that gives power back to the people.

John C. Goodman is a research fellow at the Independent Institute, president of the National Center for Policy Analysis and author of Priceless: Curing the Healthcare Crisis