Freedom Line Blog

Avik Roy, a conservative health policy expert, penned a very helpful primer on the latest GOP ObamaCare alternative.

The plan – the Patient CARE Act – is an updated version of similar reform concepts presented last year by three leading Republican members of Congress.

Along with other intriguing ideas, the Patient CARE Act replaces ObamaCare’s restrictive subsidy system – i.e. the money can only be spent on federally-approved insurance plans – with “a means-tested tax credit that individuals could use to buy a far broader range of insurance products, or deposit the funds in a health savings account.”

As a tremendous service to readers, Roy also summarizes how the Patient CARE Act compares to other conservative health reform alternatives: his Transcending ObamaCare and one championed by the 2017 Project. All three are serious proposals and deserve attention.

More on these and other ObamaCare alternatives as they develop…

Credit Avik Roy for being open-minded.

A week after unveiling his ambitious – and controversial – reform of ObamaCare, Roy, a well-respected health policy expert, is incorporating some of the best criticisms as amendments to his plan.

Most of the changes are highly technical, and not worth delving into in a short blog post. For readers interested in specifics, here is the link to Roy’s updates page.

What’s refreshing about Roy’s response to his fellow conservatives is his willingness to defend his ideas, but not to the point of brushing aside legitimate improvements.

As to the biggest concern – that preserving ObamaCare’s insurance exchanges makes it possible that Democrat congressional majorities in the future might use them as a springboard to a single-payer system – Roy replies, “No health-reform plan can singlehandedly prevent Democrats from doing whatever they want if they ever again have 2009-size, filibuster-proof majorities. But if that’s the standard for constructive GOP reform plans, well, let’s just call it a day.”

Roy’s point is well taken, but it highlights a central tension among conservatives whenever federal policymaking is considered – Which is more important: Market efficiency or federalism?

Policy wonks like Roy tend to favor efficiency as a way to lower spending and improve citizen-customer experiences. Constitutionalists like myself tend to favor federalism and the policy diversity that it affords. Of course, different regulatory regimes produce market inefficiencies. However, that just may be the price of freedom.

Roy should be applauded for trying to make his ObamaCare alternative as strong as possible. Time will tell whether conservatives will come to favor an efficient, federally-regulated national market, or continue to favor a system that lets states and their citizens decide what works best for them.

If you’re thinking about using Healthcare.gov to shop for an Obamacare-approved insurance plan – wait.

The personal information you enter to create an account may be unprotected from hackers.

That is the startling reality uncovered in testimony given by one of Healthcare.gov’s top IT officials to House investigators. Apparently, a memo documenting several “open high findings” – including the website’s vulnerability to identity thieves – was kept away from the person responsible for green-lighting its launch.

As the plot thickens, Avik Roy asks several pertinent questions: “First: Did Tony Trenkle intentionally conceal this critical information about high security risks from Henry Chao, or was it an accident? Second: Would Chao have recommended that the exchange go forward if he had been aware of high findings? Third: Did Marilyn Tavenner—the head of CMS—know about these issues when she issued the final go-ahead authorization? Fourth: Now that this information is public, why is the Obama administration encouraging people to enter their sensitive personal data into the non-secure healthcare.gov website?” (Emphasis added)

Why indeed?

Could it be that there is such a rush to spike Healthcare.gov’s enrollment numbers that Obama administration officials are willing to overlook the potential risk to millions of Americans’ private information?

It brings a whole new ominous meaning to the warning buyer beware.

Avik Roy, Senior Fellow at the Manhattan Institute, discusses the Obama Administration’s unilateral decision to delay parts of ObamaCare, why delaying the employer mandate while continuing to implement the individual mandate is unfair to hard-working Americans and evidence that the law is failing to work as intended, and how ObamaCare will make health insurance less affordable as premiums rise.

Listen to the interview here.

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CDT to 6:00 p.m. CDT (that’s 5:00 p.m. to 7:00 p.m. EDT) on Northwest Florida’s 1330 AM WEBY, as she hosts her radio show, “Your Turn: Meeting Nonsense with Commonsense.”  Today’s guest lineup includes:

4:00 CDT/5:00 pm EDT:  Bob Dorigo Jones, Senior Fellow for the Center for America – Wacky Warning Labels;

4:30 CDT/5:30 EDT:  Richard Miniter, bestselling author and columnist – American Media Institute and Investigative Journalism;

5:00 CDT/6:00 pm EDT:  Avik Roy, Senior Fellow at Manhattan Institute – Unworkable ObamaCare; and

5:30 CDT/6:30 pm EDT:  Timothy Lee, Senior Vice President at CFIF – Detroit vs. Houston.

Listen live on the Internet here.   Call in to share your comments or ask questions of today’s guests at (850) 623-1330.

Avik Roy:

…despite all of the dramatic hyperbole about the “fiscal cliff,” it’s important to remember that going over the fiscal cliff will reduce the budget deficit by $503 billion in 2013, and $682 billion in 2014, relative to the “solutions” being bandied about on Capitol Hill.

Moreover, since President Barack Obama and his fellow liberals in Congress refuse to link tax increases with entitlement reform, perhaps it’s better to go over the fiscal cliff than accede to some tax increases and no reforms.  At least then Obama & Co. would own the tax-and-spending system their intransigence created.

Avik Roy, a health policy expert at the Manhattan Institute, posits an interesting option for fiscal conservatives looking for something to replace Obamacare with, if Republicans capture Congress and the White House this November: Bushcare.

The Bush plan was formulated by the White House’s National Economic Council, under the leadership of Allan B. Hubbard. The core goal of the plan was to equalize the tax treatment of employer-sponsored and individually-purchased health insurance, without increasing the deficit. (As regular readers know, the fact that employers can purchase health insurance for their workers tax-free, whereas individuals can’t, is the original sin of the U.S. health-care system.)

…

Bush’s proposal sought to eliminate the unlimited tax break for employer-sponsored insurance, replacing it with a standard deduction for everyone. Under the plan, anyone—employed or not—who bought at least catastrophic insurance would not pay income or payroll taxes on the first $7,500 of their income, or the first $15,000 for a family plan.

…

The Bush plan’s numbers were designed with 2009 insurance prices in mind, and the tax-deduction thresholds would grow with CPI inflation. The Treasury Department estimated that the plan would lower taxes for 80 percent of those with employer-sponsored insurance, and increase taxes for the remaining 20 percent. It would have especially benefited the 18 million people who then bought insurance on their own, along with many of the uninsured, who would suddenly find health insurance to be significantly less expensive.

…

In contrast to Obamacare, however, the Bush plan would have turbocharged the market for consumer-driven health plans, tied to health savings accounts, because the most economically efficient use of the deduction would be to purchase a sufficiently generous consumer-driven plan that allowed individuals to put a maximal amount of money into HSAs. Obamacare significantly constrains the use of HSAs in its regulated insurance markets.

Among the criticisms of Bush’s health care proposal is that it “only” expanded health insurance coverage to an additional 11 million people.  Obamacare’s supporters claim – perhaps erroneously – that it would cover 33 million.  But even if we take the estimates at face value, there’s another number that’s arguably more important.

The cost of Obamacare’s 33 million newly covered citizens is agreed by all sides to be in the trillions of (new) dollars.  Bush covered 11 million for zero dollars in increased federal spending commitments.

Food for thought if the Republicans run and win on a platform to repeal and replace Obamacare.