Obamacare to Come: Seven Bad Ideas for Health Care Reform

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President Obama has made it clear thatreforming the American health care system will beone of his top priorities. In response, congressionalleaders have promised to introduce legislationby this summer, and they hope for an initial votein the Senate before the Labor Day recess.

While the Obama administration has not, anddoes not seem likely to, put forward a specific reformplan, it is possible to discern the key componentsof any plan likely to emerge from Congress:

  • At a time of rising unemployment, the governmentwould raise the cost of hiring workersby requiring employers to provide healthinsurance to their workers or pay a fee (tax)to subsidize government coverage.
  • Every American would be required to buy aninsurance policy that meets certain governmentrequirements. Even individuals whoare currently insured — and happy with theirinsurance — will have to switch to insurancethat meets the government’s definition of“acceptable insurance.”
  • A government‐​run plan similar to Medicarewould be set up in competition with privateinsurance, with people able to choose either privateinsurance or the taxpayer‐​subsidized publicplan. Subsidies and cost‐​shifting would encourageAmericans to shift to the governmentplan.
  • The government would undertake comparative‐​effectiveness research and cost‐​effectivenessresearch, and use the results of thatresearch to impose practice guidelines onproviders — initially, in government programssuch as Medicare and Medicaid, but possiblyeventually extending such rationing to privateinsurance plans.
  • Private insurance would face a host of newregulations, including a requirement to insureall applicants and a prohibition on pricingpremiums on the basis of risk.
  • Subsidies would be available to help middle‐​incomepeople purchase insurance, whilegovernment programs such as Medicare andMedicaid would be expanded.
  • Finally, the government would subsidizeand manage the development of a nationalsystem of electronic medical records.

Taken individually, each of these proposalswould be a bad idea. Taken collectively, they woulddramatically transform the American health caresystem in a way that would harm taxpayers, healthcare providers, and — most importantly — the qualityand range of care given to patients.