NCPA - National Center for Policy Analysis

ObamaCare Isn't Necessary to Have Health Care for All

November 7, 2012

Free market health policy economists have already long proposed a comprehensive health care safety net that would assure essential health care for all at just a fraction of the cost of the Affordable Care Act ("ObamaCare"), with no individual mandate and no employer mandate. Indeed, repealing ObamaCare and replacing it with the safety net reforms below would reduce federal spending over the next 10 years by close to $2 trillion, at least, says Peter Ferrara, a senior fellow at the National Center for Policy Analysis.

  • The first component of that reform would be to extend to Medicaid the enormously successful, bipartisan, 1996 reforms of the old Aid to Families with Dependent Children (AFDC) program.
  • The federal Medicaid funding to each state would be paid in fixed, finite block grants that no longer vary with state spending on the program, which has effectively been paying the states to spend more.
  • The states would also gain broad discretion to redesign their own Medicaid programs.

The second safety net component would be high-risk pools in each state.

  • Those uninsured who become too sick to purchase health insurance in the market, perhaps because they have cancer or heart disease, for example, would be assured of guaranteed coverage through the risk pool.
  • They would be charged a premium for this coverage based on their ability to pay, ensuring that they will not be asked to pay more than they could afford.
  • Federal and state funding would cover remaining costs.

The third safety net component would be guaranteed renewability, which means as long as you continue to pay your premiums, the insurer cannot cut you off because you get sick, nor can it impose discriminatory premium increases any greater than for anyone else in your original risk pool.

The fourth component would be for the government to offer every individual the same, uniform, fixed-dollar subsidy for health insurance, whether employer-provided or individually purchased, through a refundable tax credit for all replacing the current tax preference only for employer health insurance.

Source: Peter Ferrara, "ObamaCare Isn't Necessary To Have Health Care for All," Investor's Business Daily, November 5, 2012.


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