The GOP should listen to Rand Paul on Obamacare

The GOP snatches principle from the jaws of victory with #Obamacarelite. The GOP leadership has proposed a replacement for Obamacare. Their proposal is a fraud…

The GOP snatches principle from the jaws of victory with #Obamacarelite Retweet

The GOP leadership has proposed a replacement for Obamacare. Their proposal is a fraud. In reality, it’s just another version of Obamacare. Please send your reps a letter opposing this legislation. The hardwired letter to Congress reads…

I want to replace Obamacare. But the official Republican replacement bill is just Obamacare-lite. Oppose it. Instead, introduce or co-sponsor Senator Rand Paul’s excellent “Obamacare Replacement Act” (S. 222).

You can copy or edit this sample text for your personal letter to Congress…

The official GOP Obamacare replacement proposal is a fraud. Senator Rand Paul’s bill is far better. The Paul bill should become the official GOP Obamacare replacement legislation.

The Republican leadership’s proposal repeals far less of Obamacare than did previous GOP repeal bills. It’s infuriating that Republican leaders are once again betraying their promises at the very moment when they actually have the power to do something. This bad Republican proposal actually retains Obamacare’s…

— Insurance price fixing provisions — Tax penalties for people who don’t purchase state-approved insurance plans — Tax funded subsidies to help low-income people purchase overpriced health insurance.

GOP leaders also create new matching grants to states to fund features of Obamacare they once campaigned against, such as…

— Insurance company bailouts — High-risk pools — Expanded funding for support programs akin to Medicaid, but without that name

Cato Institute even argues that, “The funding formula for this new grant program appears to reward high-cost states.” In other words, the more expensive a state’s healthcare becomes, the more money that state will get. This is a recipe for sending costs higher and higher.

Perhaps the only redeeming feature of the official Republican proposal is that it cuts all sorts of silly, social engineering taxes. But it counteracts this good by retaining the “Cadillac Tax” on high-end employer-provided health insurance. The correct approach is to make all forms of health insurance equally tax deductible. But…

Even here, the Republican plan is fraudulent.It retains the “Cadillac Tax” until 2025. You might as well say, it’s here forever.

Worst of all, the official Republican plan does nothing to restore free market healthcare. Senator Paul’s “Obamacare Replacement Act” (S. 222) does a much better job of this.

Rand Paul’s plan would…

* Provide a two-year buffer period in which people with pre-existing conditions (PEC) could still get coverage. That would allow time for the market to solve the PEC problem in other ways (as described below).

* Make the cost of individual insurance tax deductible. This would give individual policies the same tax treatment as employer-provided policies. Most likely, the number of individually owned policies would expand. With more people owning their own policy, the PEC problem would plummet. PEC is a politician-created problem that happens when people get sick after losing their job (and therefore their insurance).

* Give citizens a tax credit of up to $5,000 for contributions to an HSA (Health Savings Account)

* Eliminate the ceiling on HSA contributions

* Remove the stipulation that you must have a high-deductible health care plan in order to have an HSA

* Allow citizens to use HSA funds for insurance premiums

* Expand the number of things HSA funds could be used for, including over-the-counter drugs, vitamins and supplements, plus nutrition and exercise programs. One of the great flaws of Obamacare is that it does nothing to lower the burden on the medical system by preserving health and preventing disease. Healthier people don’t need as much medical care.

* Allow citizens to band together to lower the cost of buying insurance. Individual Health Pools (IHPs) would give persons the same bargaining power that employer insurance groups currently have. The IHPs could include churches, alumni associations, trade associations, civic groups, or entities formed strictly for establishing an IHP, as long as there is no health status requirement for membership. This provision would dramatically reduce the PEC problem.

* Allow physicians to band together to gain bargaining power with insurers, without having to concentrate into big impersonal medical firms.

* Allow doctors to deduct the expense of the uncompensated care they provide, thereby making pro bono services, free clinics, and true charity hospitals more plentiful.

* Allow insurance providers to sell policies nationally. This would remove the cartel control that the insurance industry currently maintains through state legislatures. This would also restore the market for major medical plans, which is how insurance is supposed to work. The result would be a wider variety of policy choices at much lower prices.

* Give states flexibility in how they design and manage their Medicaid programs. This would enable experimentation and competition between the 50 states. It would also allow the states to innovate new ways to address the PEC problem.

* Repeal Obamacare at the same time it replaces it.

In short, I think Rand Paul’s bill should become the official Republican bill. Do it.

— END OF SAMPLE LETTER–

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Perry Willis & Jim Babka

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