Tag: john goodman

Interview with John Goodman on How to Replace ObamaCare

Last year, the Cato Institute held a forum on John Goodman’s latest book on health reform, A Better Choice: Healthcare Solutions for America (Independent Institute, 2015). Goodman founded and was the longtime president and CEO of the National Center for Policy Analysis. The Wall Street Journal calls him “the father of health savings accounts,” and he is currently president of the Goodman Institute for Public Policy Research and a senior fellow at the Independent Institute. Video of the book forum is available here.

I posted a lightly edited transcript of my interview of Goodman, which did a good job of highlighting the differences among ObamaCare opponents, in three parts:

For more on the three schools of ObamaCare opponents, see Cato’s previous book forum on Philip Klein’s Overcoming Obamacare: Three Approaches to Reversing the Government Takeover of Health Care (Washington Examiner, 2015).

It’s the Heritage Individual Mandate Debate All Over Again

A group of prominent conservatives recently released an ObamaCare replacement plan that would replicate many of that law’s worst features. As I explain in a new post at Darwin’s Fool, conservatives need to examine this proposal closely against the alternative. An excerpt:

If you’re a conservative and you’re reading this, chances are good you have a gun to your headConservatives are so averse to health policyNational Review‘s Ramesh Ponnuru once quipped that “Republicans will do anything to repeal ObamaCare–except think about health care.” This is no small problem. Indeed, it is how we got ObamaCare in the first place: conservative neglect enabled a raft of very un-conservative health care ideas to germinate at the Heritage Foundation for a decade and a half. By the time Democrats picked up those ideas and ran with them in 2009, it was too late. Conservatives were powerless to stop them.

Conservatives may indeed be just one election away from repealing ObamaCare, which is all to the good. But some conservatives have proposed replacing ObamaCare with refundable tax credits for health-insurance.  Tax credits are ObamaCare-lite. They would cement in place many of ObamaCare’s worst features, and replicate its awful results. If those features acquire a bipartisan imprimatur, we will never in our lifetimes be rid of them. Unless conservatives give tax credits the scrutiny they should have applied to the Heritage Foundation plan in the 1990s, they will make the same mistake all over again.

Conservatives don’t have to repeat history. A better set of reforms offers a clear path toward a market system, and away from ObamaCare, by building on the bedrock conservative idea of health savings accounts (HSAs). “Large” HSAs would deliver better, more affordable, and more secure health care, particularly for the most vulnerable. At the same time, Large HSAs would give workers a larger effective tax cut than all the Reagan and Bush tax cuts combined, and nine times larger than repealing ObamaCare.

Read the whole thing.

ObamaCare’s Price Controls Threaten HSAs

John Goodman is correct that ObamaCare’s individual mandate – and Kathleen Sebelius’s power to make the mandate more burdensome at whim – threaten the continued existence of health savings accounts (HSAs).  But ObamaCare’s price controls are no less a threat.

The new law requires insurers to charge enrollees of the same age the same average premium, regardless of health status.  That’s a price control, and it will cause premiums for healthy people to rise dramatically and thus lead to massive adverse selection.  Healthy people will gravitate to less-comprehensive insurance – in particular, HSA-compatible high-deductible plans – where the implicit tax is smaller.

As premiums for comprehensive plans spiral upward (ultimately causing comprehensive plans to disappear) and as ObamaCare proves more costly than projected, supporters will be desperate for new revenue.  They will call for the elimination of both HSAs and high-deductible health plans on the grounds that those products – not the price controls, mind you – are causing the market to unravel.

HSAs allow young and healthy consumers to avoid the raw deal that ObamaCare offers them. And that’s precisely why ObamaCare’s supporters will try to kill HSAs. We will end up repealing one or the other.

Fisking Pawlenty

Having fisked Newt Gingrich’s and John Goodman’s “best” health care reform ideas, I probably should do the same for Minnesota Gov. Tim Pawlenty’s similar oped in the Washington Post.  Pawlenty makes five recommendations:

  1. “Incentivize patients to be smart consumers.” Setting aside his use of the grating word incentivize (down with suffix creep!), Pawlenty is on the right track.  But he’s so vague as to leave (himself?) room for mischief.  “Make quality and costs more transparent”?  “Incentivize smarter health-care decisions”?  A pol could claim to be doing those things while falling far short of what he should be doing: letting Americans – rather than employers or government – control their health care dollars and choose their own health plan.  If that’s what Pawlenty means, heck, say it.
  2. “Congress should pass reforms that allow people to stop paying for procedures and start paying for results.” Pawlenty appears to think government should find the “right” payment system, rather than allow for competition between different ways of paying health care providers – between fee-for-service, capitation, and everything in between.  Such competition promotes all dimensions of quality.  Government isn’t equipped to define and pay for performance, and bad things happen when it tries.
  3. “Liability reform.” To recap: federal limits on med mal liability unconstitutional; Republicans unprincipled.
  4. “Interstate health-care insurance.” Pawlenty doesn’t seem to get that the point of letting individuals and employers purchase health insurance across state lines is to force regulators to compete.  His “interstate purchasing pool with strict standards” idea makes it sound like he doesn’t get it.
  5. “Modernize health insurance.” Again, with the vagueness.  If Pawlenty means he wants to let individuals control their health care dollars and choose their own health insurance – see here for how – then terrific.  But when he recommends that we should “make health insurance transferable so employees can keep their coverage if they switch jobs” and “prohibit insurance companies from discriminating against individuals whose preexisting conditions were covered under insurance they lost through no fault of their own,” it sounds like he thinks regulation is the solution.