NCPA - National Center for Policy Analysis


January 16, 2009

America needs to undo much of what the government has already done to health care -- to go back to the free market, says Jane Orient, an internist in solo practice in Tucson, Arizona, and the executive director of the Association of American Physicians and Surgeons.

One suggestion is to stop all tax discrimination against individually owned sickness insurance:

  • The present system gives tax breaks to companies that provide insurance to employees, but workers who pay for their own insurance get no such deduction.
  • This causes insurance companies to be unresponsive to providing inexpensive insurance for individuals, and it means insurance is tied to a job instead of being portable between jobs.

We should also allow individuals to purchase sickness insurance across state borders, to avoid costly mandates by states:

  • State governments create lists of services that insurance companies must cover, including non-illness-related things such as in vitro fertilization.
  • A health policy for a single Pennsylvanian costs roughly $1,500 annually; cross the Delaware into New Jersey and a similar health plan costs about $4,000, thanks to state regulations.

We should end Medicare price controls:

  • Allow patients and physicians to contract for mutually agreeable fees.
  • Medicare can compute its reimbursement by any mechanism it chooses, but that should not determine the fee.
  • This would also have the effect of drastically reducing physician overhead by removing the costs required primarily to justify Medicare's price-controlled, coded fee.

Lastly, we should:

  • Repeal the McCarran-Ferguson exemption that permits insurance companies to engage in behavior prohibited to other industries by antitrust law (insurance companies can form giant conglomerates that fix prices and make it impossible for competitors to enter the marketplace).
  • Expand health savings accounts by removing regulatory barriers so that Americans can pay for medical bills with before-tax money.

Source: Jane Orient, "Stay Healthy: Government Healthcare May Be Coming," New American, January 8, 2009.


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