Let’s fix healthcare costs before the socialists try to do it

The reason people are flirting with the idea of socialism is simply that the costs of healthcare and housing are too high and Congress is not solving it. Those in power get the blame. With the seeming internal take-over of the Democratic Party by the Democratic Socialists of America, the promises of quick fixes by punishing the rich corporations are seemingly plausible, with catch phrases like “Medicare-for-All.”

Healthcare is increasingly the No. 1 issue for voters. There is a stranglehold by both hospital and insurance corporate cartels subsidized by government cronyism, profoundly worsened by ObamaCare (the ironically named Affordable Care Act). Voters are now willing to try something else if elected officials won’t act.

Politicians promising “Medicare-for-All,” on the other hand, is a promise they cannot keep. Medicare itself is managed by insurance companies, whose profits are a percentage of premiums, and over-billed by both insurance and hospitals. Eventually, government-run healthcare has to raise taxes or ration medical care. Or, as in the case of Canada and the U.K., they do both.

Healthcare reform was forefront at the Republican Midterm Convention, and there is the opportunity to dramatically improve healthcare through reconciliation before the election or before the new congressional session. The middlemen will lose fortunes with reform, but they are not doing anything to help actual medical care or lower the costs. It is time to bypass them. Current federal rules are causing harm and feeding the cartels. This list of reforms can lower costs 50 percent, by restoring patient and physician control with commonsense reform and a safety net for those who need it.

1. Expand Catastrophic Plans to all ages and incomes. Catastrophic or major medical plans are just that: plans for major high-cost events for which insurance was originally designed. Insurance should not be used for items that are wholesale 90 percent cheaper than insurance rates. The Trump administration has made these recommendations for 2027 with Centers for Medicare and Medicaid Services rule changes, but the left is already litigating to block it and keep ObamaCare unchanged. Putting it into reconciliation would make it a law they could not attack and people would have options.

2. Health Savings Accounts for everyone and all plans, including Medicare. HSAs offer individuals the same tax benefits businesses have for healthcare costs. It also gives people lifetime savings for healthcare Medicare does not cover. Cash prices controlled by patients are 50-90 percent cheaper for medications, clinic visits and imaging (x-rays).

3. End ObamaCare-Affordable Care Act restrictions on physicians owning hospitals. This is perhaps the craziest or most cartel-like part of the healthcare law Obama signed in 2010. Research consistently shows physician-owned hospitals are better at providing medical care and better run. Most people are stunned to learn the hospital lobby works hard to prevent competition. Many states, such as North Carolina, allow hospitals to veto competition hospitals from opening.

4. Allow direct primary care clinics to count as primary care for Medicare. It is far better medical care for complex medical cases at a fraction of the price. Hospitals and insurance do not like direct primary care because they do not profit from these clinics or control them. But the purpose of Medicare patients is not to make corporations rich. Also, for patients using Medicare and direct primary care, ban Medicare from blocking medical orders (medications or referrals). This serves only to force patients into monopolistic networks.

5. Clarify IRS rules for direct primary care clinics. Make them HSA-eligible for providing wholesale medications and medical supplies.

6. Expand business options. Let them offer cost-sharing plans and other options outside the Affordable Care Act marketplace with the same tax exemptions (known as ICHRA or CHOICE options).

7. Expand short-term plans. Allow those between jobs or insurance plans to carry short-term plans for up to one year and to renew them for up to three years. Many states have done this —it can be extended nationally by Jan. 1, 2027.

8. Stop Medicare from paying higher reimbursement fees to hospitals than to independent clinics. This has encouraged acquisition of independent clinics and led to healthcare consolidation.

9. End the middlemen’s control over drug prices. Pharmacy Benefit Managers have exemptions from the Anti-Kickback Act. Three of them control 80 percent of the market , and they increasingly control the market with ownership of pharmacies and now manufacturing of pharmaceuticals. Ending these market controls is basic antitrust policy. We should also end their control of access to drugs they deem “speciality” drugs.

10. Fix business insurance. Lastly, business insurance is controlled by Federal ERISA laws. Expanding the concept of “transparency” from prices to all aspects of business contracts, disclosure of conflicts of interest, and kickbacks will restore healthcare markets.

Increasingly patients are held hostage by their own health, and all healthcare professionals are held captive as employees to a few corporations. Administrators determine your medical needs, rather than you and your doctor.

Healthcare reform means middlemen lose business and vast wealth if they lose control over our health. It is like the tobacco industry in the 1980s and 1990s insisting cigarette smoking is not dangerous. Healthcare conglomerates insist they are preventing cost increases even though they are some of the most profitable businesses in the world.

This list of federal reforms is transformational and revolutionary. Reform is easy but the resistance remains staggering. Failure to reform risks frustrated voters reaching for the false promises of the Democratic Socialists of America. Congress has an opportunity to act — just call it the “You Can Have Your Doctor Back Act.”

Dr. Clifford Porter is the Senior Fellow for Healthcare at the Texas Public Policy Foundation.