Even though it is the second-largest item in the federal budget behind Social Security, Medicare underpays healthcare providers — which is why many are dropping out of the program. Medicaid reimbursements are so low that many Medicaid “beneficiaries” struggle to find doctors who accept Medicaid. This may be one reason why several studies show that Medicaid patients receive low-quality healthcare. Government-run healthcare’s third strike is Obamacare, which has trapped many Americans in high-cost, low-quality health plans.
Despite the manifest failures of government-run healthcare and the clear danger posed by the almost $29 trillion (and growing) federal debt, Congress is planning to spend as much as $1.355 trillion, expanding all three healthcare programs, as part of the “human” infrastructure bill.
Senate Budget Committee Chairman Bernie Sanders wants to expand traditional Medicare to include vision, hearing, and dental benefits. Sanders is also pushing to lower the age people can become eligible for Medicare as a down payment on “Medicare for All,” his latest euphemism for Canadian-style “single-player” healthcare. The “moderate” counterproposal to “Medicare for All” is adding a “public option,” a government-run and government-financed health insurance plan, to Obamacare’s exchanges.
Instead of further empowering government bureaucrats, Congress needs to empower patients by creating a liberty option.
The liberty option would give individuals control over healthcare by giving them control over the healthcare dollar. It would do this via tax deductions, tax credits, and expanded access to health savings accounts.
The liberty option would thus allow individuals to use their own money to pay for routine medical expenses. They could, if they choose, pair their HSA with a catastrophic insurance plan or use part of their deduction or credit to buy a catastrophic plan. This would restore the true meaning of insurance, which is something used for unexpected major expenses, to healthcare. Auto insurance doesn’t cover routine maintenance or minor repairs, so why should health insurance pay for routine checkups or minor treatments? Government policies have encouraged an overreliance on third-party payers, leading to the current system, in which patients have little or no say, or even knowledge, of how much even routine healthcare procedures really cost.
The liberty option would restore consumers’ incentives to shop for high-quality care at an affordable price. This would create a competitive market in which healthcare providers compete on the basis of price and quality. A competitive healthcare market would incentivize healthcare providers to cater to those with chronic conditions requiring long-term intensive care.
Congress should give seniors and low-income people greater control over healthcare spending via Medicare and Medicaid HSAs. Congress should also allow younger workers to opt out of payroll taxes in exchange for agreeing to provide for their own retirement and healthcare.
Continued expansion of government control of healthcare will increase costs, lower quality, and drive more providers out of the profession. Spending billions more on failed healthcare programs will further increase federal debt, which will force the Federal Reserve to keep devaluing the dollar in order to monetize ever more debt and thus hasten and deepen the next economic crisis.
The only way to avoid a crisis is for Congress to start rolling back the welfare-warfare state. A good place to start is restoring individuals’ responsibly for their own healthcare by replacing the government option with the liberty option.
Ron Paul, a former Republican congressman from Texas and Libertarian Party presidential candidate, is the host of The Ron Paul Liberty Report.
