Health care reform key to tackling debt crisis
By: Rep. Paul Ryan
The debate over raising the statutory debt ceiling has accomplished little but revealed much about the unwillingness of many in Washington to face up to our generation’s most pressing challenges.
At the heart of the gridlock is a deep disagreement over the role that out-of-control government spending plays in our current predicament — and nowhere is this disagreement more strongly expressed than in the debate over the government’s role in health care.
One approach has been enshrined into law by President Barack Obama’s new health care overhaul, a 2,700-page mistake that has compounded the worst problems in American health care, weakened our economy and accelerated out-of-control government spending. The law’s many restrictions and mandates have jeopardized access to affordable, quality health care for millions of Americans.
Already, more than 1,400 businesses and organizations have asked for waivers from these new mandates on the grounds that the new top-down, one-size-fits-all rules would profoundly disrupt the health care arrangements of the millions of Americans they cover. Most of these waivers were granted, but some were not. And while it’s unclear whether political considerations played a role in which waivers were denied, it’s crystal clear that with power increasingly centralized in Washington bureaucracies, businesses will seek to employ good lobbyists at the expense of good workers.
Combined with more than $800 billion in new taxes, the uncertainty created by the new law is having a chilling effect on hiring. The small-business owners I speak to in southern Wisconsin are concerned that they have no way to plan for hundreds of new rules that have yet to be written. Will more waivers be granted next year? How will bureaucratic decisions change from year to year? It’s anyone’s guess. No wonder a team of analysts at McKinsey & Co. recently found that as many as a third of employers are planning on terminating the coverage their employees currently enjoy.
Unless it’s fully repealed, this law will also harm seniors. It raids $500 billion from Medicare and sets up a board of 15 unelected bureaucrats to make decisions that will result in denied care to seniors, without taking any credible steps to control the underlying health care costs that are speeding Medicare toward bankruptcy. The law’s approach to another critical program, Medicaid, is similarly misguided: The law would force an additional 20 million Americans into this broken program, even though it is failing the beneficiaries it currently serves.
There’s a better path forward on health care in America: a patient-centered approach that would strengthen critical programs such as Medicare and Medicaid, contain health care costs and improve access and quality. The House-passed budget, “The Path to Prosperity,” outlined the beginnings of such an approach by repealing the president’s health care law and proposing reforms that would make Medicare and Medicaid stronger and solvent for current and future generations.
But the work of replacing the president’s new law must go even further. Another major distortion in the health care marketplace is the exemption of employer-sponsored health insurance from taxation. This policy tilts the compensation scale toward ever-greater (tax-free) benefits and away from higher (taxable) wages. This isn’t just a big driver of runaway health care costs, as more dollars chase the same amount of services. It’s also a big reason why too many Americans haven’t seen a raise in a long time — the rising cost of health care is eating away at their wages.
In the last Congress, I introduced the Patients’ Choice Act that would have ended this discriminatory tax treatment and, instead, put Americans in charge of their health care dollars. This policy change would give people the freedom to shop for the health care coverage they want using a portable tax credit. No longer would workers have to fear losing their health coverage if they left their jobs, or worse yet, find themselves without a job. The Patients’ Choice Act would maintain the current tax deductions for businesses, ensuring they could continue to offer the high-quality and competitive health benefits they do today. Under this arrangement, employees would have the control to decide whether to apply their health care tax credit to a health plan offered by their employer or to shop for a better plan elsewhere.
The debt crisis is, above all, a health care spending crisis. About one-quarter of all federal government spending goes to health care — a percentage that would rise dramatically under the president’s new health care law. For taxpayers, employers and families alike, health care costs rose about 8 percent in 2011 and are projected to rise by 8.5 percent in 2012.
At the rate health care costs are rising, no one-time tax increase could keep up with spending on health care — taxes would have to rise again and again, devastating the economy. As Obama recently said, “If you look at the numbers, then Medicare in particular will run out of money, and we will not be able to sustain that program no matter how much taxes go up.”
But the president’s preferred approach of medical price controls and cuts to providers is doomed to fail, just as it has failed in the past. The only sure way to control costs is to reform the government’s role in health care at every level by introducing choice and competition.
In Medicare, this means giving seniors the financial means to choose from a list of Medicare-approved coverage options, like the system that members of Congress enjoy. In Medicaid, it means returning authority over the program to the states and giving them the flexibility to tailor their programs to the diverse needs of their unique populations. And for all Americans, it means making health insurance more portable and more affordable by personalizing the tax credit for health insurance.
Ultimately, the question we must answer with regard to the future of health care in America boils down to this: Who should be making health care decisions for you and your family? A panel of bureaucrats in Washington?
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