While failing thus far, the Republican effort to reform Obamacare isn’t over. And Republicans will reject anything that’s a mere “fix,” while Democrats won’t consider anything that smacks of “repeal/replace.”

Recalling two important representations may help explain the Republicans’ “repeal/replace” strategy. Former HHS Secretary Kathleen Sebelius was responsible for implementing the ACA legislation. After she spoke in Kansas City two years ago, a news report was headlined “Sebelius Says ACA Is Here to Stay.” She indicated confidence ACA was so “intimately entwined” into our health care payment system no one could destroy it.

Echoing Sebelius, Nobel Prize winning economist Paul Krugman recently wrote a New York Times article titled “Three Legs Good, No Legs Bad.” Quoting Krugman: “you can’t change any major element of the (ACA) without destroying the whole thing. ... Take away any one (of the three legs), and the program can’t work.”

According to those experts, ACA is not fixable. It’s booby-trapped! Repeal/replace may be the only solution.

If I were “king,” I’d bring congressional leaders together with these objectives:

Create a basic structure for making our health-care payment system work.

Forbid the use of the terms “fix,” “repeal/replace,” “ACA” and “Obamacare.”

Allow no measurement or discussion of costs. Discussing “who pays what” would get in the way of creating a vision for a workable structure. The discussion of costs and would come later.

In my role as “king,” I’d work to generate the following:

Policies that directly reduce costs through transparency, competition and the free market.

Individual and family ownership of major medical insurance policies. People could purchase what they want and need.

Health savings accounts (HSAs) for routine care up to the major medical “kick-in.”

Enhance insurance company competition by selling across state lines.

Reduce the cost of defensive medicine through tort reform.

Publish prices.

Aggressively attack waste, fraud and abuse.

Coverage would be available to all.

Insurance companies would underwrite actual risk.

Pre-existing conditions or lifetime limits wouldn’t block insurance coverage.

There would be no mandates or mandated coverage “goodies” that might be good personal regimen but should not be part of a health care payment system.

At this point we would determine:

The cost structure.

How the tax system could be used to give favorable/equitable treatment based on income.

How best to determine, based on income, when medical deductions would apply, how much tax benefit would be allowed and how refundable tax credits might apply.

How to return Medicaid to providing care to the poor and elderly.

How to use Medicaid to provide a safety net covering excess costs to those with pre-existing conditions or who are otherwise uninsurable.

There would be initial transition costs, and this system should be adjusted over time to obtain a more ideal tax treatment and to find free market incentives to eliminate the temptation to reject buying coverage. We would learn from experience, and not try to finalize the system in the first try.

That’s one approach. I’m sure we’ll hear many more.

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Steve Bakke is a Courier subscriber living in Fort Myers, Fla. He is a retired CPA and commercial finance executive.


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