Let Consumers Repeal Obamacare

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Obamacare was sold on a lie (“you can keep your doctor”) and built on a regressive tax known as the individual mandate. It has created untold anxiety for some of the most vulnerable among us, who have watched premiums skyrocket and insurance plans canceled. Too many Americans now live in locations with only one Obamacare plan on offer. Soon there will be locations with none.

The current Republican health care bill is worthy of support on justice grounds alone since it repeals the individual mandate. Never again should we entertain proposals to help the worst off by penalizing the not so well off. But GOP Sens. Rand Paul and Ted Cruz are right that the bill doesn’t go nearly far enough to lower health insurance premiums.

Is there an easy tweak that would allow lawmakers to face voters next year with evidence of premium decreases already in hand? I think so.  Simple language could be added to the bill creating what’s known as an Optional Federal Charter for health insurance regulation.

The reason health insurance is so expensive is because there so many legally mandated benefits that must be covered. Over the decades the chiropractor and podiatrist lobbies and so on have descended on state capitals around the country and successfully demanded that their services be required coverage for all insurance policies sold in that state. There are now thousands of such mandates across the country. Obamacare only added to this mandate mess.  

What consumers need is the ability to shop for policies they can afford. Why not let young people, for example, buy inexpensive policies with high deductibles so that they are covered in case in case of accidents but pay out of pocket for routine care? And why should the 21st century health insurance system be broken up into 50 separate economies when efficiencies and convenience could be had by offering insurance options on a nationwide scale?

One easy way to make this happen is to create an Optional Federal Charter to regulate health insurance. Congress certainly has the power to do this under the Constitution’s Commerce Clause. It could be placed under the authority of the Department of Health and Human Services, which would be tasked by Congress with writing simple rules that ensure the availability of low cost policies nationwide. There would be no coverage mandates and no rules governing the shape of policies such as limits on deductibles and co-pays. Insurers could still be required to cover those with pre-existing conditions and subsidies could still be offered to help those who need them.

The beauty of the Optional Federal Charter solution is that none of the existing rules governing state regulated insurance policies would have to change. Consumers would simply be offered a new choice: purchase a state regulated policy or a federally regulated policy.

Current Republican proposals to offer states flexibility with regard to Obamacare coverage mandates are fine as far as they go, but they don’t go nearly far enough. If the GOP is going to take responsibility for a major change to our health insurance laws, it would be foolish to leave responsibility for creating cost savings to an uncertain reform process in each of the 50 states. 

Congressmen who are making a politically risky vote on health care reform want more assurance that there will be concrete benefits for their constituents, and soon. With an Optional Federal Charter for health insurance, a new regulatory framework could be up and running this year and cheaper policies on sale by the time of the 2018 election. You can bet insurance companies would jump into this market, advertising the benefits of the new legislation for all to see. The problem of Obamacare markets with only one or no insurance options would be fixed instantly and for good.

Having 50 separate state health insurance markets simply isn’t a prescription for success in the internet age. People should be able to move around freely without having to worry about changing health insurance. And there’s no compassion in forcing the working poor to buy more insurance coverage than they need, which is what Obamacare tried to do. Consumers themselves could end that regressive scheme if allowed to do so via an Optional Federal Charter.

Robert L. Pollock was op-ed editor of the Wall Street Journal from 2007-2012. He is a former Pulitzer Prize finalist for his writing on health care and is currently an MD candidate at Sidney Kimmel Medical College in Philadelphia. 


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