‘Obamacare’s nemesis’ offers an alternative plan

By Deena Winter | Nebraska Watchdog

LINCOLN, Neb. — U.S. Senate candidate Ben Sasse has been called “Obamacare’s Cornhusker Nemesis,” but says Republicans need to do more than just bash the president’s signature program and call for its repeal. They need to offer alternatives.

He says Republicans need to stop with the “worn-out talking points” and start putting families and doctors ahead of “big government and big insurance.”

“I think right now Republicans are losing because Democrats are the party of big government, bad ideas, and Republicans way too often counter those bad ideas by being for nothing,” the Republican said in an interview.

Sasse was assistant Health and Human Services secretary to President George W. Bush and was on a the health-care speaking circuit before deciding to make his first run for public office. He’s held Obamacare town hall meetings statewide, complete with a portable 9-foot-high stack of the law’s 21,000 pages of implementing regulations. But now he’s talking about solutions, releasing what he calls the Anti-Obamacare Recovery Plan.

Sasse said he once heard a health insurance CEO say his biggest fear was that consumers would be able to buy their own policies, with what they want in them, similar to car insurance policies. His proposal would be that guy’s nightmare, allowing people to buy their own health insurance. People could stick with their employer’s insurance plan or buy a Cadillac plan or a more affordable, stripped-down plan that protects them in a catastrophe but doesn’t pay for every medical need.

Imagine if we bought groceries the way we buy health insurance, he said: If you paid the same price regardless of what you bought, that would change the way you shop. Same goes with car insurance, which doesn’t pay for every tank of gas or oil change, but protects people from unanticipated costly events. He argues health insurance should operate similarly, protecting people from losing their life savings.

“If we treated car insurance like we treat health insurance today, we would be submitting bills to GEICO when we get an oil change,” his plan says.

Routine health costs could instead be paid through expanded health savings accounts, under his plan. People would be able to take their health insurance with them when they change jobs — similar to 401(k) retirement plans.

He says Americans should be able to compare doctors and shop for insurance on Consumer Reports-style databases with price and outcome information. He’d reduce the role of the middleman, saying the third-party payer system creates inefficiencies.

Take the flying market — in the past, consumers booked flights through travel agents, with airlines marketing to the agents and negotiating kickbacks for sales and limiting consumer choices. But once the Internet allowed people to see all their options and book tickets directly, the middleman was cut out.

“If air travel were like health care, customers would have to log onto the FAA’s website to be approved for their trip, see which airlines were covered and pay the same price no matter which flight they take,” his proposal says.

He says the health-care system should be modernized with digital technology, which would help consumers and companies make decisions about providers, create a personal medical record and reduce preventable medical errors.

“It is outrageous that consumers can find Consumer Reports evaluations of a Toyota versus a Ford SUV but don’t have access to basic data when it comes to personal decisions about which surgeon can deliver the best results from a hip replacement,” his plan says.

If insurers had a more limited role in the health-care system, doctors and nurses would spend less time pushing paper and more time coming up with better, lower-cost care, he argues.

“Rather than success based on who has the biggest team of lobbyists to navigate the maze of government rules and mandates, providers should be free to compete on costs, quality and outcomes,” his plan says.

He says politicians make promises about entitlement programs that the nation can’t afford to keep and pre-Obamacare, the nation’s health care system was “inaccessible, expensive and unsustainable.” He would gradually increase the eligibility age for Medicare, move Medicare to a defined contribution system and adjust Medicare premiums for wealthier people.

“These programs are not solvent and we need to tackle them in a real way,” he said in an interview. “I think Republicans need to show more courage to talk about the problems we face.”

And while some Republicans would just as soon go back to the pre-Obamacare environment, Sasse says part of the reason Democrats got the health insurance law passed four years ago was that Republicans refused to admit the nation’s health insurance program was broken. Workers were paying more than 47 percent more for their work-based health insurance than they did five years prior and health care was causing more than 60 percent of bankruptcies.

“I don’t believe that we have a crisis in this country just because Democrats are in power, but because too many Republicans are satisfied with the status quo,” he said. “I think there’s an incestuous relationship between Republicans and the Big Health Insurance lobby.”

However, he argues the system was broken not because of too little government intervention, but too much. While many people think of the U.S. health-care system as private, Sasse notes 44 percent of it is financed by the government and the rest is highly regulated. He argues that misguided tax policy created incentives for employer-based health coverage over individual policies and Medicare and Medicaid’s price controls stifle innovation.

Sasse says the cost of health care is a problem, consuming one-sixth of the economy, and he argues that’s largely because the system has been restrained from innovation and productivity because the government incentivizes volume, not value, and the third-party payer system removes incentives for providers to create value. Obamacare compounds this problem, he argues.

He argues the health-care system’s problems date back to “the haphazard actions of Washington’s central planners during the 20th century.” During World War II, employers began offering health benefits to attract workers during the era of wage controls, which led to preferential tax treatment of employer-based health coverage. Americans shouldn’t be restricted to an employer-based health-care system that leaves them fearful of starting their own businesses because they’d lose their insurance, he says.

“Additionally, this policy hides the true cost of care and has given rise to the third-party payer system that fuels much of the over-utilization of services and high costs,” he argues.

He argues that in direct-to-consumer markets, companies are more innovative, leading to things like Travelocity, Dell’s PC and the Apple’s iPad.

“In a government-price-setting scheme, there is no incentive for that kind of innovation,” the report says. “In fact, that system actually stifles efficiency and innovation because more volume is the only way to make more money. Doing something more efficiently means getting paid less.”

He proposes:
• Allowing people to own their own health insurance policies across state lines. People could buy policies on private marketplaces, with government getting out of the way.

• Eliminating taxes on health care costs and creating a new tax deduction for individual health insurance policies to encourage Americans to own their own health insurance.

• Making health savings accounts more attractive to consumers by raising the limit of allowable contributions to them, expanding allowable expenses and eliminating statutory limitations for government health program participants.

• Creating a private-sector database with anonymous Medicare and Medicaid claims data and incentives for providers to publish price data, similar to the way the SEC requires publicly traded companies to publish financial reports.

• Having government enforce contracts between private parties to ensure consumers get clear, transparent information and require health plans to make standard disclosures of plan details, akin to nutrition labels on food.

• Reducing costs by capping non-economic damages in malpractice lawsuits and implementing “loser pays” policies to cut down on “junk lawsuits and defensive medicine.”

• Giving states the freedom to make Medicaid work better and address the needs of people with pre-existing conditions through high-risk pools, for example.

• Creating premium supports and having insurance companies compete against each other and traditional Medicare, rather than just lobby politicians for higher reimbursement.

• Adjusting Medicare premiums for wealthier people, increasing premium contributions for Medicare Parts B and D.

• Preventing identity theft and Medicare fraud by removing Social Security numbers from Medicare cards.

Sasse says Obamacare must be repealed, but Republicans can’t stop there. They have “failed to articulate a societal goal where every one of our friends and neighbors have access to healthcare,” his plan says. But he also rejects the idea that the solution will come through government mandates.

Instead, he says states and local government, churches, charities and voluntary associations can care for the poorest and sickest.

“That is where real compassion is found in our country: not in far away government office buildings where our kids and grandparents are treated like numbers on a page, but in small towns across America where citizens come together to serve their neighbor out of a heart of gratitude.”

Contact Deena Winter at deena@nebraskawatchdog.org. Follow Deena on Twitter at @DeenaNEWatchdog

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