by Lindsey Hubbart
There is no question that the health care system in the United States is broken. Unfortunately, the current solution, the Patient Protection and Affordable Care Act, commonly referred to as Obamacare, will actually exacerbate the problem. Rather than a federal overhaul of the system, we ought to implement free market solutions to make insurance more affordable for everyone.
According to Jeff Roe, CEO of LifeWise Health Plan and senior vice president of Premera Blue Cross, many people will face 20 percent increases of individual health insurance premiums. While some subsidies will be enacted to offset the costs, Roe says that “75 percent of [the] LifeWise Washington membership today is above the 400 percent of the federal poverty level and will see no benefit from subsidies.” The cost increase does not stop there. Based on a report by the Congressional Budget Office, Americans will face a tax increase of $1 trillion.
Due to the immense cost of Obamacare, many organizations will also drop their health insurance plans. Whitworth is actually one of those companies, stating on its website that, “new federal regulations for our student health insurance require that all plans increase their limits. This requirement results in significantly higher premiums. As a result, Whitworth University will no longer offer student health insurance.”
One of the most effective ways of driving costs down is to open up the national health insurance market. Currently, we can only buy health insurance within our state.
Because people have few options, companies can continually raise prices. With many more companies in the marketplace, they will compete against each other for our business, forcing prices to go down.
According to Bloomberg Business Week, another alternative to Obamacare is to repeal the mandate and provide a tax credit for those who don’t carry insurance. Larry Levitt, senior vice president of the Kaiser Family Foundation, a non-partisan think tank for health-care policy, writes that this is “probably the simplest way of achieving the same thing as the individual mandate.” This is better than the individual mandate though, because there will be an incentive to purchase health insurance, rather than a punishment for not doing so.
Finally, we could improve the health care system by encouraging people to set up health savings accounts, or HSAs. John C. Goodman of the National Center for Policy Analysis, a non-partisan think tank, asserts that people could set up these tax-deductible accounts and save for “routine health expenditures.” Low-income patients could receive vouchers to set up these accounts. Goodman states that, “This alternative would make people more aware of prices and how much they spend, thus lowering health care costs.”
All of these alternatives to the Affordable Care Act involve the free market, which is the most cost-effective way of improving the state of our broken health care system.
I firmly believe that we must come up with a solution that effectively provides insurance to more Americans, but we can’t rely on the government for one-size-fits-all insurance plans.
Fostering nation-wide competition, offering tax credits to those who buy insurance, and encouraging people to save for their health care costs will effectively drive down costs and make health insurance more affordable for Americans.
Hubbart is a sophomore majoring in economics. Comments can be sent to lhubbart15@my.whitworth.edu.