Health Care Reform in 3 Ridiculously Easy Steps

Just a few tweaks and the health care system will be vastly improved.

Over the past four years, oceans of ink, tons of sweat and doubtless a few tears have been spilled by smart people — including yours truly — in the noble quest to devise an ideal plan to replace Obamacare with a patient-centered health care system. And while sensible proposals abound, most are currently going nowhere, either because they’re too complicated or because they gore a few too many special-interest oxes.

Health care reform is hard because everyone has a stake in it and no one wants to be the unintended victim of a national experiment. But reform doesn’t have to be hard. All we really need is three simple tweaks: 1. Let individuals and employers opt out of Obamacare; 2. Let seniors opt of out of Medicare; 3. Let everyone have an Health Savings Account.

That’s it. While this three-point plan is by no means a silver bullet for all that ails our beleaguered American health care system, it would plant potent seeds of freedom amidst the thorny brambles of government-run health care. And the beautiful thing, politically, is it’s easy to explain and hard to oppose.

1. Let individuals and employers opt out of Obamacare. /1

While we await a president who will sign a full repeal of the Unaffordable Care Act — and the collapse of that unfortunate law is already slowly under way — there is an interim fix to the law that friends of health care freedom should rally around: an immediate repeal of the individual and employer mandates.

The individual mandate requires most Americans to purchase government-controlled health insurance. Support for repealing it exceeds 60 percent in most every demographic, including Democrats and Obamacare supporters.

The employer mandate requires all firms with 50 or more employees to sponsor and help pay for such insurance for their workers. Support for its repeal approaches 100 percent, because, even though President Obama has repeatedly postponed it, it has already proved economically destructive, causing a measurable reduction in full-time employment. Employers are naturally responding to the mandate by reducing new hires and shifting workers to part-time status. Some experts fear that, when finally implemented, it will cause tens of millions of Americans to lose their employer-sponsored health benefits. 

Put the two repeals together in one bill, and you avert potential catastrophe while actually shrinking the deficit. That’s right. While repealing the employer mandate would increase federal spending by an estimated $151 billion over ten years, repealing the individual mandate would save taxpayers an estimated $282 billion over ten years.

Some conservatives may object that such a bill would merely “fix” Obamacare. Actually, it would be planting the seeds of Obamacare’s ultimate repeal. And politically it would keep the anti-Obamacare army on the offensive, forcing Democrats into a terrible bind. If they vote to repeal the two unpopular mandates, they weaken Obamacare fatally. If they vote to preserve them, they run afoul of popular opinion and risk losses at the polls in this year’s midterm elections. Either path promotes Obamacare’s ultimate demise.

Republicans are already expected to make sizable gains in November. No issue is more favorable to them than health care. What better way to win the issue, and the election, than by focusing their fire on the law’s two most unpopular provisions?

Doubtless Obamacare defenders will respond with scare tactics, saying “Premiums will skyrocket in the exchanges! Millions will fail to gain coverage!” Throw me in that briar patch. The more we focus the debate on the issues of cost and coverage, the more we focus voters’ attention on why Obamacare ultimately makes those very problems worse.

The law’s onerous mandates have already driven up premiums and cost millions their existing coverage. And as many enrollees in the exchanges are just now discovering, Obamacare plans turn out to be lemons — faux insurance, marred by high premiums, sky-high deductibles and skimpy networks of doctors and hospitals.

Question for Democrats: What good is having a health care card, if it doesn’t buy you anything? Another question: If Obamacare is so great, why does it have to be mandatory?

2. Let seniors opt of out of Medicare. /2

Most people don’t know it, but Medicare has an individual mandate even more severe than Obamacare’s. Under a rule imposed two decades ago by the Medicare bureaucracy, without congressional authorization, seniors who disenroll from Medicare automatically lose their Social Security benefits as well, and must pay back any benefits they’ve ever received. Seniors are effectively trapped in a monopoly government program that, like Obamacare, restricts their access to care — and more so as costs continue to rise.

The Medicare agency’s own official experts predict that, if Obamacare’s Medicare cuts aren’t repealed, Medicare’s payment rates to doctors and hospitals will fall below Medicaid’s by the end of the decade. That’s a disaster. Right now, one-third of doctors refuse to take Medicaid patients, because the government reimbursements are too stingy. Imagine what will happen when Medicare’s rates become even stingier than Medicaid’s. For one thing, according to the Medicare agency, 15 percent of U.S. hospitals will go out of business. 

If seniors were allowed to opt out of Medicare, private insurance alternatives would appear, and an exodus of patients would begin. Admittedly, it would be very modest at first, because, despite its flaws, Medicare is still a rather good financial deal for most families. But over time the trickle of seniors fleeing government-run care would grow, assuming reimbursement rates fall and bureaucratic rationing increases.

As we’ve recently seen with the horribly managed Department of Veterans Affairs, the flaws of government monopoly health care would become visible and politically intolerable. Calls for reform would go up, and a real reform would become more politically appealing. Then who would be “throwing grandma off a cliff”? At the very least, an opt-out would give seniors a sensible escape hatch, and voters a useful warning system.

Repealing Medicare’s individual mandate is the right thing to do, because freedom should be every American’s right. It’s also an indispensable first step to the kind of Medicare reforms all serious analysts know we need.

Question for Republicans: If freedom is right for people under 65, why isn’t it right for people over 65?

3. Let everyone have a Health Savings Account. /3

The reason we had 50 million uninsured in this country before Obamacare, and will continue to have 30 million uninsured even after Obamacare is fully implemented, is because health care costs too much. Costs are out of control, and the health care law has so far done nothing to abate the problem and much to exacerbate it.

Policy experts have come up with all kinds of ideas for reducing the cost of health care, but they all boil down to just two basic ideas: HMOs (health maintenance organizations) and HSAs (health savings accounts). HMOs try to hold down costs by putting an organization (translation: a bureaucracy) in charge of your health care. HSAs try to hold down costs by putting you in charge of your health care.

Here’s my own simple test for knowing when we’ve finally got the health care cost problem licked: when patients routinely ask their doctors, “Do I need this test?” and “How much does it cost?”

Today, most patients don’t ask those questions, because they don’t need to. Their insurance is paying, so why do they care? But that’s beginning to change, as rising health care costs force deductibles up to previously unheard of levels ($6,000 or more a year, in many of the most affordable Obamacare plans).

When patients have to pay for their own care out of their own pocket, they naturally take control of the conversation. Doctors and hospitals have be more responsive to their needs or risk losing their business.

Furthermore, current law provides generous tax breaks for having insurance, but only modest ones for those who have to pay for medical care out of pocket, including folks with high deductibles. But there’s a solution: Let everyone use after-tax dollars to pay for out-of-pocket care through a tax-free Health Savings Account.

HSAs already exist. Fifteen million Americans have obtained an HSA since the option became available 10 years ago. 

An HSA allows you to spend pre-tax dollars for medical expenses, provided you also carry an economical health insurance policy with a high deductible (though not as high as an Obamacare plan). HSAs give people an affordable health care alternative that, as I’ve mentioned, puts them more in charge of their care.

If every patient had an HSA, it’s virtually certain that the high cost of health care would become more manageable, and we would begin to “bend the cost curve downward,” as more and more people started asking those two critical questions.

Want to make health care more affordable for the uninsured and low-income folks?

  • Exempt HSA-qualified insurance plans from Obamacare’s costly benefit mandates, at least for folks who are too poor to afford even a subsidized Affordable Care Act exchange plan.
  • Make HSAs available to seniors on Medicare. (They’re currently not.)
  • Increase the amount we (and our employers) can contribute to our HSA, tax free.
  • Expand the list of things that can be purchased from an HSA (such as over-the-counter drugs, which were stingily taken off the list by Democrats in the health care law).

Do those things (especially the first), and HSAs will take off like a rocket. The ranks of the uninsured will shrink.

Question for Democrats: Do you support letting everyone has access to an affordable Health Savings Account? If not, why not?

Health care reform doesn’t have to be complicated. All we need is a few simple tweaks. Liberate patients, and the rest will take care of itself.

Dean Clancy, a former senior Republican official in Congress and the White House, writes on U.S. health reform, budget and constitutional issues. Follow him at or on twitter @deanclancy.

[Originally published at, July 17, 2014. @usnewsopinion. Republished at]


1/ Update, 2017: The Tax Cut and Jobs Act of 2017 effectively nullifies Obamacare’s individual mandate, effective January 1, 2019.

2/ Update, October 3, 2019: Today President Trump issued an executive order ending the Medicare individual mandate. The order directs the relevant federal agencies to implement the change by April 1, 2020.

3/ Update, October 22, 2019: Today the House Republican Study Committee (RSC) published a health reform proposal, dubbed ‘A Framework for Personalized, Affordable Care,’ that includes proposals to dramatically expand and strengthen Health Savings Accounts. The RSC health plan effectively endorses the concept of ‘HSAs for All.’

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