Dr. Pandelidis is an orthopedic surgeon with special training and expertise in the surgical and non-surgical treatment of back and neck disorders. Dr. Pandelidis’s practice is dedicated exclusively to spine care and orthopedics. He has been practicing medicine in the York, PA area for over twenty years.
Part 1: Problems with access and cost – and ObamaCare didn’t help
Regulatory Reform in the Private Insurance Market
The first component of replacement should be regulatory reform, or more accurately, reducing government interference in the private insurance market. Limiting the number of mandated coverages would allow individuals and families to buy the policies that best fit their medical and financial situations, and would allow insurance companies to sell policies that consumers want to buy. Insurance companies must be allowed to price premiums so that they reflect the actuarial risk. This would make the popular ObamaCare coverage of dependents up to the age of 26 years a non-issue. In an authentic insurance market, healthy young people would be charged appropriately low premiums. In conjunction with allowing sales of insurance across state lines, these provisions would spontaneously spawn a vibrant private sector national insurance exchange.
“Congress must have the courage and commitment to fully repeal ObamaCare and replace with policy restoring beneficial market forces to the private insurance market.” ~Dr. Nicholas Pandelidis
Deregulation would also encourage supply side innovation. As an example, companies could and would develop and sell policies that protect individuals from premium increases associated with developing an expensive medical condition. Such a policy in combination with extending the HIPPA protection (preventing loss of insurance for those who have continuously maintained their insurance coverage if they were to develop an expensive medical condition) to the individual market would be a significant step to fully addressing the pre-existing medical illness problem.
Expanding the Role of Health Savings Accounts
Replacement’s second component should promote Health Savings Accounts (HSAs) by making them tax advantaged and allowing them to be passed on to heirs. The combination of the availability of high deductible/catastrophic policies with HSAs would begin the beneficial shift away from 3rd party payment.
Personal Ownership of Private Health Insurance
The final component of replacement would promote individual purchase of healthcare insurance – moving away from employer provision – by providing a refundable tax credit for individuals/families to put toward buying the policy that best fits their individual situations. This could be done in a revenue neutral way by shifting the foregone tax revenues from employer provided insurance to this new benefit.
These reforms will repair and transform the private insurance market. Individuals choosing and buying, insurers innovating, competing, and selling will drive down costs and elevate service and quality. As reform corrects the government created perverse incentives in the private healthcare market, hundreds of billions of dollars of the current $3.2 trillion US annual healthcare expenditure will flow back into the private economy – growing businesses, increasing employment, raising wages, and making American companies more competitive in the global economy.
Fix Private Insurance – then tackle Medicare and Medicaid
The replacement components are clear but the political path forward, problematic. The opportunity to repair the harm done to the private healthcare market by government regulation must not be lost. While it may be tempting to also pass reforms that would put Medicare and Medicaid on sustainable paths, and to practicably address unaffordable premiums for those with expensive pre-existing medical conditions, it is a bridge too far. And “compromise” half-measures on everything would be no reform at all.
The Republicans should neutralize any demagoguery from the left that “conservatives” don’t care about the poor and sick by putting forward provisions allowing those newly qualified for Medicaid to keep that coverage, and for those with pre-existing conditions who can’t afford their premiums to enroll in Medicare, Medicaid, or an income-based federal premium subsidy program.
While there are better and more viable free market solutions for these two problems, such provisions would provide unassailable political cover to get the critical deregulation of the private insurance market done. Better to fix the private markets now, and to take on Medicare and Medicaid reform later.
A few words on the deficit
A few words on the deficit: Fiscal conservatives rightly worry over deficits but the bigger immediate problem is taxes and regulation that confiscate capital that would be most productively allocated in the private sector, rather than less effectively if not out and out wastefully spent by the government. That bleeding of the private economy throttles economic growth. The long-term solution to the deficit is certainly not higher taxes, and further, not necessarily less government spending per se, but rather tax/regulatory/fiscal policy resulting in the economy growing faster than government spending. If that happens, the deficit problem slowly, steadily, and unfailingly resolves.
Congress must have the courage and commitment to fully repeal ObamaCare and replace with policy restoring beneficial market forces to the private insurance market.
Transformational healthcare market reform will lower healthcare insurance and healthcare cost, grow employment and the economy; and growing the economy is the foundation for credibly lowering the national debt.
[Ed. Note: Dr. Beth Haynes met Dr. Pandelidis through the Docs4PatientCare Foundation and originally read this article in one of the D4PC newsletters. It is reprinted here with Dr. Pandelidis’s permission.]