NCPA - National Center for Policy Analysis

Health Care for All without the Affordable Care Act

October 17, 2012

There is a way to provide health care to all with money that is already in the system. It will require no new taxes and no new spending, say John C. Goodman, president and CEO of the National Center for Policy Analysis, a Research Fellow with The Independent Institute and author of Priceless: Curing the Healthcare Crisis, and Peter Ferrara, a senior fellow at the National Center for Policy Analysis, director of entitlement and budget policy at the Heartland Institute, and a senior adviser on entitlement reform and budget policy for the National Tax Limitation Foundation.

The ACA only adds to the inefficiency and inequity of the current health care system. Currently, federal tax subsidies total about $300 billion a year for people that obtain private insurance. Much of the system is highly regressive and encourages waste. The proposal set forth by Goodman and Ferrara seeks to correct the inefficiencies and provide alternatives to the status quo to make health care affordable to everyone.

  • First, replace current tax subsidies with a uniform, fixed-dollar subsidy for each individual, whether it is used for employer-provided or individual insurance. Any unclaimed subsidy by an individual would be sent to a local safety net agency to fund any emergency care.
  • Second, give a block grant to states for Medicaid. This allows individual states to best use funds for Medicaid and would help the poor the most by allowing them to buy private health insurance of their choice.
  • Third, guarantee renewability. This ensures that an individual can't be dropped from an insurance plan for getting sick or be denied coverage after losing employer-sponsored health insurance.
  • Fourth, provide health status insurance. This would extend the guaranteed renewability idea to allow people that get sick to change health insurance providers and still pay the same premiums. The previous health insurance provider would have to pay the added costs to the new insurer to cover any likely costs of the pre-existing condition.
  • Finally, offer portable health insurance. A person would be allowed to keep the same health insurance provider even if they change jobs.

To ensure that these proposals become successful, there need to be transitional steps to make sure that people are covered at all times. Most importantly, the government must provide a comprehensive safety net to protect those that are sick and uninsured. For example, each state must use part of its Medicaid block grant to set up a high risk pool so that people that are sick would be guaranteed coverage.

These market-based reforms achieve the same goal of the Affordable Care Act without the bureaucratic mess. Rather than spend $1.76 trillion over the next 10 years to fund the ACA, these proposed reforms will reduce entitlement spending and tax burdens on every individual.

Source: John C. Goodman and Peter Ferrara, "Health Care for All without the Affordable Care Act," National Center for Policy Analysis, October 2012.


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