Texas Weekly: Private, Patient-centered Health Insurance

(Ed. note: This column by Arlene Wohlgemuth ran in last week's issue of Texas Weekly, which asked four policy and legislative experts the same question: What version of health care reform would be best for Texas?)

Congress stands on the cusp of passing health care legislation that would be tremendously harmful to Texas.

In August, the Texas Public Policy Foundation released a report by internationally renowned economist Dr. Arthur Laffer which concluded that health care reforms based on President Barack Obama's agenda would lead to much higher health-care inflation and slower economic growth; cost every Texas resident an additional $4,265; and still leave roughly 30 million Americans uninsured. The Texas Health and Human Services Commission estimated the various health care bills pending in Congress could cost the state between $20 billion and $60 billion.

The latest House bill increases Medicaid eligibility to include everyone up to 150 percent of federal poverty level, costing the state of Texas almost $4 billion per year — almost one-tenth of total general revenue spending. It remains to be seen if and for how long the federal government would assume the added costs.

But if not the Obama plan or one similar, then what? Our research establishes that a patient-centered approach to health care reform would build on America's world-leading quality and high patient satisfaction in a way that extends those benefits to even more people and empowers all patients to make their own medical decisions.

A great place to start is Medicaid, the program for the poor that is jointly funded by state and federal taxpayers. Consider that regardless of where the Medicaid eligibility limit is set, families just above the eligibility level suffer greatly. Because these families are not eligible for government assistance, they must obtain private insurance, which studies have shown is significantly more expensive because of government programs. Plus, their taxes will go up to pay the increased cost of government programs for families that make only slightly less than they do. It should not be surprising that many of these families living on the edge between self-sufficiency and government assistance are among the uninsured.

The solution to Medicaid could begin by providing eligible families with vouchers that they could use to purchase private insurance. The amount of the voucher would be on a sliding scale — government support would taper off as family incomes increase. Such an approach would reduce the bureaucracy needed to administer Medicaid and give recipients better access to care and a greater voice in their own health care decisions.

The second reform that should be tackled is the employer-based health insurance system — the relic of the 1940's that has proven to be unsuitable for a much more fluid 21st century workforce. Providing the health-insurance tax deduction to individuals instead of employers would allow people to own their insurance and take it from job to job.

We should promote greater use of proven cost-saving tools such as health savings accounts (HSAs), which pair high-deductible, catastrophic insurance protection with tax-exempt savings accounts to cover routine medical expenses. When compared to traditional insurance plans, HSAs have reduced health care costs 12 to 20 percent the first year, and halved the rate of increase in health care costs in subsequent years.

Consumers should be free to shop across state lines for policies that meet their requirements rather than those arbitrarily set by their state government, which force unnecessary costs on people who need or want minimal coverage.

Texas can make changes that require no federal action by taking the initiative to adopt HSAs for state employee and retiree health plans, and by revisiting the 55 mandates on health insurance that have added to the cost to consumers.

The state should also reform its antiquated scope of practice laws that prohibit non-physician health professionals from practicing to the extent of their education and training. Eliminating such artificial restrictions would increase the supply of quality medical providers and provide more choices to the consumer.

Proposals such as these would reduce the role of third-party payers — especially the government — and empower patient choice, ownership and accessibility to quality health care. The financial relationship between the health care provider and the patient would be restored, and the free-market forces that have delivered more innovation, higher quality, and lower costs in most other sectors of our economy would be unleashed.

Former Rep. Arlene Wohlgemuth, R-Burleson, was recently named executive director of the Texas Public Policy Foundation.