(Punditcy.com) – [via Wall Street Journal] – The unraveling of the Affordable Care Act presents a historic opportunity for change. Its proponents call it “settled law,” but as Prohibition taught us, not even a constitutional amendment is settled law—if it is dysfunctional enough, and if Americans can see a clear alternative.
[image src=”http://punditcy.com/wp-content/uploads/2013/12/Cochrane-photo.jpg” width=”250″ title=”John H. Cochrane” lightbox=”no” frame=”light” align=”left” float=”left”]The Wall Street Journal article yesterday by John H. Cochrane, a professor of finance at the University of Chicago Booth School and a senior fellow at the Hoover Institute, provides just that — a clear and concise alternative. His plan differs from other Republican plans in that it actually solves a majority of the problems that were touted by the Left as the reasons we need to pass it now, without reading it.
This article blows the argument of President Obama and the Left that no other plan exists out of the water. This plan proposes changing how we use health insurance and is similar to how we use home-owners or car insurance. I have long believed that health insurance should be used like auto insurance. You wouldn’t use your auto insurance to fill your gas tank, get a tune-up or change your oil.
Here are some excerpts from Cochrane’s plan in the Wall Street Journal:
Only deregulation can unleash competition. And only disruptive competition, where new businesses drive out old ones, will bring efficiency, lower costs and innovation.
Health insurance should be individual, portable across jobs, states and providers; lifelong and guaranteed-renewable, meaning you have the right to continue with no unexpected increase in premiums if you get sick. Insurance should protect wealth against large, unforeseen, necessary expenses, rather than be a wildly inefficient payment plan for routine expenses.
People want to buy this insurance, and companies want to sell it. It would be far cheaper, and would solve the pre-existing conditions problem. We do not have such health insurance only because it was regulated out of existence. Businesses cannot establish or contribute to portable individual policies, or employees would have to pay taxes. So businesses only offer group plans. Knowing they will abandon individual insurance when they get a job, and without cross-state portability, there is little reason for young people to invest in lifelong, portable health insurance. Mandated coverage, pressure against full risk rating, and a dysfunctional cash market did the rest.
Rather than a mandate for employer-based groups, we should transition to fully individual-based health insurance. Allow national individual insurance offered and sold to anyone, anywhere, without the tangled mess of state mandates and regulations. Allow employers to contribute to individual insurance at least on an even basis with group plans. Current group plans can convert to individual plans, at once or as people leave. Since all members in a group convert, there is no adverse selection of sicker people.
Read the entire article in the Wall Street Journal and pass on to your Representatives: Here
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