REPLACING ZEROCARE

Virtually all Americans applaud Obamacare’s ostensible goals — to cut the cost of health insurance, reduce the number of Americans who are uninsured.

Thanks to Obamacare’s flawed design and inept implementation, we know how not to achieve them. Obamacare imposes 2 1/2 times the costs as it provides in benefits, according to a study by the American Action Forum. More than twice as many Americans say they’ve been hurt by the law as have benefited from it.

Obamacare has worsened the problems it was supposed to solve. Here’s how to ameliorate them:

*Let consumers decide what their health insurance policies should cover.

On average, premiums are 39 percent higher for individuals, 56 percent higher for families, mostly because of what Obamacare requires insurance companies to include in the policies they sell.

Some Obamacare mandates — such as requiring men to have coverage for breast cancer, women for prostate cancer — are downright stupid. All substitute the judgment of politicians for that of consumers.

Consumers are better judges than politicians are of the health coverage they need, and this is a judgment only those who pay the premiums should have the right to make.

*Permit insurance companies to sell health policies across state lines.

This would increase the size of risk pools, which would lower premiums. More savings would come from ending mandates imposed by busybodies in state government.

Insurance premiums in the six states with the most mandates in 2012 were 28 percent higher, on average, than in the six states with the fewest, said Howard Hyde, who wrote a book about health insurance reform.

State laws forbidding interstate risk pools appear to violate the Commerce Clause of the U.S. Constitution, which states: "No preference shall be given to any regulation of commerce or revenue to the port of one state over those of another."

"If we can buy oranges from Florida, mutual funds from Tokyo and wine from France, we should be able to buy financial products like insurance from whomever gives us the best deal," Mr. Hyde said.

*Give the tax break corporations get for health insurance premiums to individuals and small businesses.

Employer provided health insurance is an artifact of wage controls during World War II. Businesses couldn’t compete for skilled labor by offering more money, so they offered health insurance instead.

Employer provided health insurance has been popular, but people who lose their jobs usually lose their health insurance, too. That’s the number one reason why people without health insurance don’t have it. If individuals who are not on an employer plan got the same tax break, health insurance would be more portable, there would be fewer lapses in coverage.

*Give subsidies for purchasing health insurance directly to the people who need them.

Obamacare provides nearly $1 trillion in subsidies, but these are paid to insurance companies, and are so clumsily designed Americans who benefit from them face significant tax liabilities if their incomes rise just barely above subsidy threshholds.

The burden of paying for the subsidies falls disproportionately on Americans earning $20,000 to $38,000 a year, according to a Brookings Institution study.

It would be more clear, efficient and fair to provide all Americans with a refundable tax credit for the purchase of health insurance. If the amount of the credit were greater than what the taxpayer owes, the government would pay him or her the difference.

The health care experts associated with the 2017 Project say the refundable credit they propose would make it possible to buy a catastrophic health insurance policy for a tenth of what the cheapest Obamacare policy costs, would cost taxpayers $1 trillion less over ten years.

*Provide a tax break for Health Savings Accounts.

If HSAs were used for routine medical expenses, health insurance would become less a baroque form of prepayment, more like real insurance. Costs would go down, because people would have an incentive to take price into consideration when shopping for health services.

Individuals would get a deduction or credit for contributions to their HSA. Unused funds could accumulate without tax liability, but could be used only for medical expenses.

Employers should be permitted to contribute to their employees’ HSAs. The government could contribute to the HSAs of the needy.

Jack Kelly is a former Marine and Green Beret and a former deputy assistant secretary of the Air Force in the Reagan administration. He is national security writer for the Pittsburgh Post-Gazette.

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