Finally, a conservative plan to fix America’s broken health care system

Democrats and progressive activists have done a remarkable job of convincing tens of millions of Americans that there are only two ways to fix the nation’s health care system: a single-payer, government-run model, or a public option plan, which would inevitably lead to the creation of the single-payer system. But this is a false choice.

Americans deserve a health care system that can help all people gain access to affordable, high-quality health care coverage. Putting government in charge of health care would undoubtedly improve access for some people, but it would substantially reduce the quality of care for tens of millions of others, and almost certainly lead to severe health care rationing. 

How can I be so sure? Because the federal government already runs several large health care programs, including Medicaid and the Veterans Affairs health system, and both have massive problems and provide inferior care for those who are enrolled in them. 

The reason so many people believe that a single-payer or public option plan could fix U.S. health care is that conservatives, especially conservative politicians, haven’t offered a compelling and comprehensive alternative.

This is precisely why S.T. Karnick and I, working closely with other policy experts at The Heartland Institute, have developed the American Health Care Plan (AHCP) — a proposal that would, if fully implemented, give all people access to health care coverage, reduce costs over the long run and improve choices for consumers.

Government-run health care systems are designed to control and manipulate markets, limit choices and redistribute wealth, and like most government-run systems, government health care systems fall short because bureaucrats are terrible at making decisions for other people. If government cannot effectively run the Postal Service, VA health system and Amtrak without losing boatloads of money, why would anyone think they could run America’s vast health care system?

The key to fixing the health care system is to provide greater access to all people while making key structural reforms that utilize the power of market economics and personal choice. Rather than impose top-down mandates that restrict consumer freedom, the American Health Care Plan would empower everyone with more options and encourage health care savings throughout the system.

The foundation of the AHCP is its Health Ownership Accounts (HOA) proposal. HOAs are health savings accounts that would be provided to every American who wants one, regardless of income. People could use their HOA to pay for any qualifying health care expense, including health insurance premiums and deductibles, out-of-pocket costs and prescription drugs. 

Funding for HOA accounts would come from three sources.

First, individuals and families could contribute money tax-free to their HOA every year. 

Second, those now with employer-provided health insurance – about 158 million Americans – would receive the money employers currently spend on their health insurance, instead of being forced to settle with whatever health insurance plan their employer chooses for them.

Third, lower-income Americans, those with disabilities and kids now enrolled in the Children’s Health Insurance Program (CHIP) would receive government funds. Amounts provided by the government would be offered on a sliding scale, based on income and, in the case of those with serious illnesses, need.

(Medicare would remain in place, and funding for Medicare would not be diverted to pay for the American Health Care Plan.)

Under the AHCP, there would be no need for Medicaid or employer health insurance plans, because Americans would have enough money in their HOA accounts to buy their own health insurance plans, providing more options than ever for the vast majority of families. 

Health insurance regulations would also be dramatically altered. Burdensome ObamaCare mandates that raised health insurance costs would be eliminated, and regulatory changes would allow people to buy health insurance across state lines.

Additionally, any association of consumers anywhere in America could band together to buy health insurance as a group. No one would have to buy health insurance as an individual ever again, giving people in the individual marketplace much more negotiating power, lowering costs. 

That means private businesses, such as Wal-Mart, Target, Costco, etc., would be able to offer to their customers group health insurance at reduced rates. And charities, churches and civic and nonprofit organizations could do the same for their members.

Those with pre-existing conditions would also be protected from losing health care access through a combination of policies included in the American Health Care Plan.

HOA rules would provide individuals with the maximum amount of flexibility, to ensure that no one gets left behind. For example, individuals would be able to use their HOA funds to pay for the health care expenses of their family members. And because HOA funds not spent at the end of the year would carry over to the following year, Americans would have the ability to build a substantial health care savings safety net over time that could be used when facing health care emergencies. 

The American Health Care Plan would also encourage health care savings by allowing people not enrolled in a government health care plan to withdraw 5 percent to 10 percent of their total HOA funds every three years without needing to pay taxes. The more money people save by making smart health care choices, the more they could withdraw and spend on any product or service they want, even non-health-care-related items.

And the best part is, the AHCP would not require a tax increase, because nearly all of the funding for the plan would come from existing health care spending.

Under the American Health Care Plan, everyone would have the ability to buy an affordable health insurance plan, regardless of income, race, age or gender. And those with health insurance now would have more options than ever, and greater incentives to spend their money wisely.

Americans do not need to put the dysfunctional federal government in charge of health care to improve access and reduce costs. There is a better way, and that way is the American Health Care Plan.

Justin Haskins (Jhaskins@heartland.org) is a research fellow at The Heartland Institute and the director of Heartland’s Stopping Socialism Project.