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This article originally appeared in the Roanoke Times on June 26, 2005
America's health care system is sick, and needs help. Health insurance premiums continue to grow at double-digit rates each year. Prescriptions are too expensive for too many people. There is little choice of insurance providers. Lawsuit abuse drives up costs and drives doctors out of practice, leaving the sick in some parts of the country with no one to treat them. And millions of Americans are uninsured.
The current system is the result of trying again and again to reform the system with more government control and less individual choice. It is time to try something different. There are short-term changes that can bring quick improvements within the system and long-term systemic changes that can permanently bring better and more affordable health care.
In the short term, giving more power to consumers will drive down costs and increase the number of insured Americans. According to the Institute of Medicine most adults who do not have health insurance cite the high cost as the reason. Studies also show that state mandates increase the costs of coverage by 15 to 30 percent and drive as much as 25 percent of the uninsured out of coverage.
Consumers need the power to combat the special-interest groups driving the increase in mandated state coverage, which drives up prices. Michael Cannon of the libertarian Cato Institute reports that required coverage in some states includes wigs (seven states), acupuncturists (11), marriage therapists (11), massage therapists (four), osteopaths (24), alcoholism (45), infertility treatment (14) and contraceptives (29).
Former Vermont Gov. Howard Dean, a physician himself, was one of the first leaders to try to bring an end to this nonsense. As governor, he pleaded with Vermont's legislature to stop enacting such mandates because they were making coverage too expensive.
Dean's plight is currently being taken up at the federal level by Sen. Jim DeMint, R-S.C., Rep. John Shadegg, R-Ariz., and House Speaker Dennis J. Hastert, R-Ill. Their recently introduced "Health Care Choice Act" would empower consumers to use the Internet and other means to find affordable health insurance policies sold nationwide. It would allow someone in Virginia who did not want to pay for the state's 58 mandated categories of coverage to save money by buying insurance in Idaho, where there are only 13 mandated categories.
Such a policy change would bring the country closer to consumer-driven health care, where we could choose the policies with the benefits we really need and not be forced to pay for things we do not need. And, as Hastert argued, it "gets rid of the red tape that's pricing millions of Americans out of the health insurance market."
Consumer-driven health care is also the long-term solution to what ails the American system. Congress took a big step in this direction in 2003 when it made health savings accounts an option for all. These accounts, funded by tax-free contributions from employers and employees, are coupled with low-cost, high-deductible insurance policies that cover catastrophic expenses.
Because we own these accounts, we can take them with us when we change jobs. Money invested in them can be put in checking accounts, money market accounts, mutual funds and certificates of deposit. Money withdrawn for medical expenses is never taxed and can be passed on to a spouse tax-free upon death.
If this sounds somewhat familiar, it is because health savings accounts have a lot in common with what President Bush is proposing for Social Security: the option of accounts that workers would own and be able to pass on. The American Institute for Full Employment (AIFE) has made this connection, and taken it one step further with a comprehensive "7.65 Percent Solution."
AIFE proposes allowing us to put half of our Social Security tax dollars and half of our Medicare tax dollars, which equals 7.65 percent of our income, into an account to be used for all retirement expenses, including health care. Using historical averages as a guide, AIFE says a 23-year-old worker starting one of these accounts today, while earning just $20,000 a year, would have an account of more than $600,000 by age 63 and more than $2 million by age 78. Such large assets would provide security in place of the financially failing government retirement programs of Medicare and Social Security.
A nationwide insurance market and millions of Americans with health savings accounts, 7.65 percent accounts or any other type of individually owned account would have a transforming effect on our health-care system. It would empower us to re-take control of the system and focus it on the treatments and services we really want and need. Health care providers and insurers would have no choice but to listen to us, because we would have the money in our accounts and the choice of shopping elsewhere.