reform healthcare and Control Costs

 

ISSUE

What we call health insurance is really pre-paid healthcare. By involving an insurer (either private or government) in every healthcare transaction, we disrupt the doctor/patient relationship, incur unnecessary administrative costs, and cause premiums to rise to unaffordable levels. 

Medicare is a $600 billion a year pay-as-you-go federal entitlement program. Medicare insurance is characterized by wasteful care, health care fraud, special-interest influence, and lack of innovation. Medicare has eliminated better alternatives and made all seniors utterly dependent on the government for their health care.

Medicaid is a $578 billion program that exists ostensibly to provide health care to the poor. Overall, the federal government currently finances between 63 percent and 65 percent of Medicaid spending.  The federal government’s method for distributing Medicaid funds to states encourages fraud, creates perverse incentives for state officials, and encourages states to expand their programs to people who don’t need assistance. The more a state spends on its Medicaid program, the more it receives from the federal government.

 

SOLUTION

For general health insurance:

  • Control costs using Direct Primary Care for routine medical treatment. Limit private & government insurance to large,unexpected treatments.

For Medicare, Congress should:

  • take all the money Congress currently spends on Medicare and give it directly to enrollees as cash, as with Social Security, adjusting individual enrollees’ “Medicare checks” so that lower-income and sicker enrollees receive larger checks;

  • allow workers to save their Medicare payroll taxes in personal, inheritable retirement health savings accounts that will gradually replace Medicare transfers;

  • fund any transition costs by reducing other government spending, not by raising taxes.

For Medicaid, Congress should:

  • freeze each state’s Medicaid funding at current year levels;

  • give states full flexibility to use Medicaid funds to achieve a few broad goals;

  • begin phasing out Medicaid federal funding and the Medicaid payroll tax.

Note: These proposals are based in part on policy analyses developed by the Cato Institute.