In March 2009, President Barack Obama said,
“If there is a way of getting this done where we’re
driving down costs and people are getting health
insurance at an affordable rate, and have choice
of doctor, have flexibility in terms of their plans,
and we could do that entirely through the market,
I’d be happy to do it that way.” This paper
explains how letting workers control their health
care dollars and tearing down regulatory barriers
to competition would control costs, expand
choice, improve health care quality, and make
health coverage more secure.
First, Congress should give Medicare enrollees
a voucher and the freedom to choose any health
plan on the market. Vouchers would be means-tested,
would contain Medicare spending, and are
the only way to protect seniors from government
rationing.
Second, to give workers control over their health
care dollars, Congress should reform the tax treatment
of health care with “large” health savings
accounts. Large HSAs would reduce the number of
uninsured Americans, would free workers to purchase
secure health coverage from any source, and
would effectively give workers a $9.7 trillion tax cut
without increasing the federal budget deficit.
Third, Congress should break up state monopolies
on insurance and clinician licensing. Allowing
consumers to purchase health insurance
licensed by other states could cover one-third of
the uninsured without any new taxes or government
subsidies.
Finally, Congress should reform Medicaid and
the State Children’s Health Insurance Program
the way it reformed welfare in 1996. Block-granting
those programs would reduce the deficit and
encourage states to target resources to the truly
needy.
The great advantage of a free market is that
innovation and more prudent decisionmaking
means that fewer patients will fall through the
cracks.
In March 2009, President Barack Obama said,
“If there is a way of getting this done where we’re
driving down costs and people are getting health
insurance at an affordable rate, and have choice
of doctor, have flexibility in terms of their plans,
and we could do that entirely through the market,
I’d be happy to do it that way.” This paper
explains how letting workers control their health
care dollars and tearing down regulatory barriers
to competition would control costs, expand
choice, improve health care quality, and make
health coverage more secure.
First, Congress should give Medicare enrollees
a voucher and the freedom to choose any health
plan on the market. Vouchers would be means-tested,
would contain Medicare spending, and are
the only way to protect seniors from government
rationing.
Second, to give workers control over their health
care dollars, Congress should reform the tax treatment
of health care with “large” health savings
accounts. Large HSAs would reduce the number of
uninsured Americans, would free workers to purchase
secure health coverage from any source, and
would effectively give workers a $9.7 trillion tax cut
without increasing the federal budget deficit.
Third, Congress should break up state monopolies
on insurance and clinician licensing. Allowing
consumers to purchase health insurance
licensed by other states could cover one-third of
the uninsured without any new taxes or government
subsidies.
Finally, Congress should reform Medicaid and
the State Children’s Health Insurance Program
the way it reformed welfare in 1996. Block-granting
those programs would reduce the deficit and
encourage states to target resources to the truly
needy.
The great advantage of a free market is that
innovation and more prudent decisionmaking
means that fewer patients will fall through the
cracks.
Michael F. Cannon is director of health policy studies at the Cato Institute and coauthor of Healthy Competition: What’s Holding Back Health Care and How to Free It.