NCPA - National Center for Policy Analysis

Taking the Government Out of Health Care

September 8, 2014

The government takeover of our health care system didn't happen with the passage of the Affordable Care Act in 2010, says Avik Roy, senior fellow at the Manhattan Institute. It happened in 1965, he writes, with the creation of Medicare and Medicaid.

Even without the Affordable Care Act (ACA), the federal government would be spending trillions of taxpayer dollars on single-payer health care entitlements:

  • Even before the passage of the ACA, per-capita spending on health care by the U.S. government (at $3,967) was higher than per-capita public spending in all but three countries in the world.
  • In 2022, federal spending on health entitlements, not including Obamacare, are set to reach $1.5 trillion.
  • The ACA will increase that spending by 16 percent.

Countries like Switzerland and Singapore, on the other hand, have the lowest per-capita public health spending, with Switzerland spending $1,628 per person and Singapore $813. How do they keep costs so low? According to Roy:

  • Both countries use the power of private markets.
  • Switzerland has no government-run insurers, though 20 percent of its population receives government premium subsidies.
  • Singapore uses health savings accounts and high-deductible insurance plans to keep costs low.

The systems are hardly perfect, writes Roy, but they are superior to United States' government health care programs. Using Singapore and Switzerland as a model, Roy developed his own plan to replace Obamacare -- as well as Medicare, Medicaid and the Veterans Health Administration. The plan would:

  • Replace government-run health care programs with a system of tax credits, allowing individuals to purchase high-deductible health plans with health savings accounts in the private market.
  • Reduce federal spending by $10.5 trillion over three decades.
  • Reduce the cost of individual health insurance policies by 17 percent.
  • Repeal the Obamacare tax hikes as well as the individual mandate.

According to Roy, his model would increase the number of insured Americans by 12 million. However, his plan has also received criticism, with many labeling it a refinement of Obamacare rather than a repeal.

Source: Avik Roy, "Don't Just Replace Obamacare-Replace the Great Society," Weekly Standard, September 4, 2014. 

 

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