TYRRELL: Savings accounts, not collectivism

Well, you might ask in the aftermath of the Democrats’ unseemly frenzy to create a health care reform that restrains expenses and extends health care to those who need or want it, is there an alternative? Through all the Democrats’ wheeling, dealing and spilling of red ink, sensible health care innovations have been available. They are modern reforms that have been hammered out in conservative think tanks over the years. Wherever they have been tried, they have shown promise. Yet during the Democrats’ Capitol Hill revels, they have hardly been heard of. Allow me to suggest a modest health care alternative to what is commonly called the present Congress’ health care monstrosity.

The United States spends more than twice what the average industrialized nation spends on health care. Forget not, though, that American health care is the best in the world. Equally significant, the cost of health care is growing at slightly less than 5 percent annually, a leading reason why some Americans are not insured and Medicare and Medicaid are heading for financial ruin. A major reason for this rising cost is the federal tax code’s exclusion of employer-provided health insurance. This is unfair to those who must purchase insurance with after-tax dollars. Moreover, it blinds consumers of employer-provided health care to the real costs of their health care and puts pressure upward on health care’s costs.

The solution is to be found in bringing health care to the marketplace. End the tax deductibility of employer-provided health care. Allow every citizen, except those enrolled in Medicare or in a military health plan, to receive a refundable tax credit to purchase Health Savings Accounts (HSAs). The key thing is that people should have a choice of plans. The tax credit should be available not only to those who purchase HSAs. Some people, for instance, have higher medical costs, so they may prefer a more comprehensive policy. However, we could encourage more widespread use of HSAs by raising the cap on the amount of money people could put in them. Also, owners of HSAs should be allowed to purchase health insurance in any state in the country. The money should be applicable to those employer-sponsored plans still available or to any health care plan an individual or family chooses, thus allowing product competition. Unused money in each account should be rolled over in succeeding years, and whatever money remains in each account should be part of an account holder’s estate upon death.

An additional twist to this might be to allow people with HSAs to pay for their health care expenses by drawing down from a health care debit card. This would be particularly desirable if health care were administered through a patient’s local hospital. Administering health care payments through hospitals is an innovation suggested recently by Hunt Lawrence, a New York investor and successful entrepreneur who has reviewed the American health care system and thinks hospitals could compete successfully with insurers while offering a broader range of services. With his admittedly ambitious reform, hospitals could simultaneously monitor a patient’s bills and health conditions. Furthermore, the hospital could neatly maintain the patient’s health records, which would be portable for the patient in the event of moving from one locale to another. Of course, patients would be free to change hospitals, thus introducing competition among hospitals.

Also, let us have tort reform. Reckless malpractice lawsuits annually account for at least a half-trillion dollars in wasted health care expenses, through jackpot lawsuits and the unnecessary tests prescribed by doctors fearful of the reach of trial lawyers.

Finally, for those who are impoverished and unable to pay for health care, let the government give them vouchers to pay for their medical expenses up to a certain amount annually.

Whatever the consequences of the Democrats’ 2009 health care monstrosity, conservatives should redouble their efforts to repeal its archaic collectivist requirements if they ever become policy. Notwithstanding their promises to lower health care costs, the collectivists are going to increase those costs by a huge amount while reverting to government rationing and control of doctor-patient relations.

So here are some modest proposals that I have gathered up from thoughtful work that has been done in conservative think tanks and by conservative reformers. An omnium-gatherum of such domestic reforms can be found in Rep. Paul D. Ryan’s “A Road Map for America’s Future,” which is available on the Wisconsin Republican’s Web site. As conservatives mount their challenge to the Democratic reactionaries’ revived Great Society, replete with huge deficits and Stagflation II, I prescribe Mr. Ryan’s Road Map. Conservatives do have an alternative to economic ruin.

R. Emmett Tyrrell, Jr. is the founder and editor in chief of the American Spectator and an adjunct scholar at the Hudson Institute.

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