Please write your senators and urge them to allow a parallel healthcare system run by consumers in the next attempt to replace Obamacare. Action Alert!
As of Monday night, the Senate health bill is dead. Sens. Mike Lee (R-UT) and Jerry Moran (R-KS) joined Sens. Rand Paul (R-KY) and Susan Collins (R-ME) in their opposition to the current draft, meaning Sen. McConnell (R-KY) does not have the votes to bring the bill to the floor.
ANH-USA has fought in particular to legalize catastrophic-only insurance policies, which are key to allowing a consumer run system. Under Obamacare, such catastrophic policies were theoretically legal for under thirty year olds, but in practice were unaffordable, costing just as much, sometimes more, than Obamacare bronze policies.
Legalizing catastrophic policies is essential because they offer consumers the freedom to choose a genuine insurance plan that covers real emergencies while using Health Savings Accounts (HSAs) to cover day-to-day needs. Note that HSA’s, can be used to pay for some integrative services, and if not used, can be redirected to pay for retirement. It is the consumer’s money and the consumer tends to spend it carefully.
Given the polarized politics of healthcare, a sensible compromise is to allow two different systems. As we’ve written previously, a parallel, free-market medical system could exist side by side with a government run system like Obamacare. Those who want what Obamacare offers could stay with it; those who want different coverage could buy their own healthcare with the catastrophic policy as a back up.
We suspect that in the long run the consumer run system would take over, because it would bring healthcare costs down. This cannot be done under Obamacare, because that bill helped reinforce all the medical monopolies that drive up health costs.
Sens. Ted Cruz (R-TX) and Lee drafted an earlier amendment to the healthcare bill that would have allowed catastrophic plans and plans that do not need to follow certain Obamacare rules (like the requirement to provide “essential health benefits”), but Senator McConnell’s revised version of their amendment will not work. Here’s why.
The revised language lumps all non-Obamacare compliant policies in the same risk pool with Obamacare-compliant plans. This means that when older, sicker people buy the more expensive Obamacare policies, costs for insuring these individuals will be passed on to those on the cheaper catastrophic plans, resulting in higher premiums (although taxpayers will also subsidize, as the bill provides for $70 billion to help insurance companies cover high-risk individuals). This is just the same old, same old.
Under Obamacare regulations, in fact, insurers would be required to increase premiums for both catastrophic and Obamacare plans by the same percentage because they’re in a single risk pool. The end result would be catastrophic plans that are just not affordable.
Keep in mind also that, as is the case currently under Obamacare, it is the young and healthy who will largely be burdened with paying for the old and sick. This is true even though in today’s America it is the young who are poorest and the old who are best off.
There are other problems with this bill. Sen. Paul wrote eloquently how it is rife with crony capitalism. This legislation would deliver billions more taxpayer dollars to the private insurance industry. Is it really the government’s job to subsidize the profits of private insurers that are already making billions?
Before the new bill was released, we were cautiously optimistic that the Cruz/Lee proposal would create what this country sorely needs: a consumer-driven alternative to Obamacare. We hope that future attempts to reform our broken healthcare system will include such an alternative.
Action Alert! Write to your senators and urge them to legalize catastrophic policies in their own risk pool in order to allow a REAL consumer run alternative to Obamacare. Please send your message immediately.