by Dr. Chad Savage
President Donald Trump recently painted a picture for the American people of what healthcare reform would look if given a second term in office.
Trump made a passionate argument for a framework anchored in choice and transparency, elements that stand in stark contrast to Obamacare—which used the power of the federal government to force people to purchase something simply for being alive: government-sanctioned health insurance.
Buried within the Affordable Care Act (ACA), the “individual mandate” commanded Americans to buy these policies or face hundreds of dollars in fines. (The U.S. Supreme Court later defined these “fines” as “taxes” in an attempt to make them constitutional.)
The ACA’s intent to ensure healthcare coverage for all Americans was noble. The reality, however, was disastrous. The ACA’s other mandates, such as risk pools and minimum coverage requirements, made compliance too expensive for many smaller insurance companies, squeezing them out of the health insurance market altogether.
Their departure created lucrative regional cartels for the behemoth insurers left standing. Without the stabilizing effect of competition, these insurers doubled their premiums between 2013 to 2017. Thus, Americans were forced not only to buy health insurance, but choose from an ever-shrinking number of ever-more-expensive plans—and all the while becoming increasingly underinsured.
Those who couldn’t afford the ACA’s growing affordability problem were further punished by the Obama-Biden individual mandate. That is, Americans were fined for their inability to afford a government-mandated health plan run by insurance companies now pulling in record profits.
Relief came in President Trump’s Tax Cuts and Jobs Act of 2017, which neutered the coercive individual mandate by slashing its penalty to zero. Beyond the punitive relief, the removal of the individual mandate’s roadblocks opened the door to a plethora of new, affordable coverage options. The traditional mandated plans remained, but American healthcare consumers could also opt for Short-Term Limited Duration (STLD) policies, Indemnity Plans, and additional Health Sharing Organizations.
Many found that these new, affordable plans also paved new ways to access care outside of the artificial, restrictive insurance networks, such as Direct Primary Care.
This growing medical practice model bypasses the third party payer system in favor of direct payments from patients to medical service providers. By circumventing the third party bureaucracy, direct payment from patient to doctor can lower prices and improve access. In fact, in some cases, the cost reductions over ten years can be so profound that with the combination of less expensive coverage and care, a family of four could purchase a house with the savings.
Despite these successes, the ACA did not fully go away. Legally, the individual mandate remains intact and could be resurrected by a new administration—a promise already made by former Vice President Joe Biden should he become president. Biden’s commitment to the mandate likely explains the massive increase in contributions to his presidential campaign by the nation’s top health insurers.
Resurrecting the mandate would be a huge mistake. It would drive Americans out of the more cost-effective insurance alternatives and force them to give their money to Biden’s benefactors in the insurance industry. Health coverage for everyone should be achieved without manipulating the health insurance market to benefit a few favored companies. Nor should hardworking Americans fear crushing fines.
One healthcare reform plan Biden should instead support is Healthcare for You—a framework from the Job Creators Network Foundation, of which I’m a member, that mirrors the elements recently highlighted by President Trump. It gets Big Brother out of the exam room, rather than inviting him in.
Trust citizens to make the right decisions for themselves and do away with the notion that government must command people’s actions. Allow them to retain the freedom and dignity to make their own decisions regarding what is best for themselves and their healthcare outside of governmental coercion.
Mr. Biden: If elected, do not bring back the individual mandate.
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Dr. Chad Savage is the founder of YourChoice Direct Care in Michigan and member of the Job Creators Network.
Photo “Joe Biden” by Phil Roeder. CC BY 2.0.