My Health-Care Alternative for the Old and Poor

It’s time to move beyond ObamaCare.

Whether it is struck down by the Supreme Court, defunded by Congress, or simply collapses from its unsustainable costs and the impossibly complicated bureaucracy it seeks to impose, ObamaCare won’t work. It will depress the economy, increase the national debt, discourage medical innovation, and erode the quality of healthcare.

The fundamental mistake of ObamaCare’s architects is that they refused to recognize the systemic failure of government-provided healthcare – Medicare and Medicaid had begun malfunctioning long before Nancy Pelosi bribed and bullied Congress into approving Obama’s healthcare bill. Now we need to begin assembling the components of a replacement plan that works better than ObamaCare and more efficiently than the current system.

To that end, I am introducing the Choice in Healthcare Act, which will create a voluntary, 10-year pilot program for a new healthcare delivery system, beginning in June 2013.

Geared toward low-income individuals and seniors, this simple plan will replace participants’ Medicare and Medicaid benefits with roughly equivalent funds put on a debit-style “Medi-choice” card. Participants can then use their card to buy the health insurance of their choice on the open market and to pay for out-of-pocket expenses such as co-payments and deductibles. In succeeding years the card’s funding level will be adjusted for inflation, and any unused funds will roll over to the next year.

This plan will streamline healthcare delivery by replacing hospital insurance, Medigap, prescription drug programs, Medicare, and Medicaid with a simple debit card. Instead of dealing with the notorious restrictions, exclusions, and red tape of government-provided healthcare, participants will be empowered to control their own healthcare and force insurers and providers to compete for their business. Medicare and Medicaid beneficiaries will be freed from these failing, regimented programs, and will gain the same access and choice in healthcare enjoyed by other Americans.

The pilot program would be launched in eight counties in California’s San Joaquin Valley, an impoverished area whose residents are woefully underserved in healthcare. According to a December 2005 Congressional Research Service report, “By a wide range of indicators, the SJV [San Joaquin Valley] is . . . one of the most economically depressed regions of the United States” and is “suffering from high poverty, unemployment, and other adverse social conditions.” The report found that the region had nearly double the percentage of Medicaid participants (22.9 percent) compared with the national average (11.7 percent) and around half the ratio of active doctors (1.4 doctors per 1,000 people in the San Joaquin Valley, compared with 2.3 doctors per 1,000 nationwide).

The valley’s poorer inhabitants are precisely the kind of people whom government-provided healthcare is supposed to help. Yet their access to quality care is severely limited due to myriad restrictions and bureaucratic obstacles. As a result, local hospitals, doctors, and medical professionals have shown enthusiastic support for our plan.

The pilot program’s costs will be minimal, since it will largely redirect today’s inefficient government spending. But its potential rewards are high. It will constitute a voluntary real-life experiment – applying only to those who choose to participate – in using choice and competition to eliminate the waste, inefficiencies, and restrictions of the current system. Best of all, if it works in the difficult conditions of the San Joaquin Valley, it will likely work across the country – with essentially no additional costs.

In fact, if the program is implemented on a large scale, it will have beneficial ripple effects throughout the healthcare sector and the national economy. It will encourage widespread entrepreneurship, innovation, and competition as providers seek to meet the needs of empowered consumers. It will harness the free market to drive reforms that will benefit all Americans, particularly the poorest.

Big, powerful reforms don’t have to be complicated. To improve healthcare, you don’t need a thousand-page bill like ObamaCare that engineers a government takeover of one-sixth of the U.S. economy and criminalizes the failure to buy a health insurance product. The program outlined in the Choice in Healthcare Act could be a crucial part of an affordable, free-market alternative. It deserves a chance to prove its effectiveness in the real world.

This editorial originally appeared in the Wall Street Journal on June 22, 2012. Read the article at: http://online.wsj.com/article/SB10001424052702304765304577479053352812014.html?mod=WSJ_Opinion_LEFTTopOpinion