September 26, 2008


Gaining Health Care Coverage Without Losing Freedom

By Israel Ortega

Americans are anxious about the future of our health care system — and rightly so. They’re looking for a sensible way to extend coverage to the tens of millions of Americans who lack health insurance.

But many are offering the wrong prescription.

Taking cues from those on the fringe of American politics, some in Congress suggest having faceless bureaucrats in Washington micromanage our health system. They promise to fix all its shortcomings in one sweeping regulatory swoop, because they think government is best suited to make our personal health care decisions.

But before handing the federal government that much power, let’s consider what Americans actually want when it comes to health care reform.

Public polling consistently shows that most Americans want reform, but they don’t want to lose what they otherwise have today. More importantly, they overwhelming prefer private-sector solutions to address the problem of the uninsured.

Perhaps this is no surprise, given the tendency of the government (i.e., the public sector) to get virtually nothing accomplished. And why is that? Partisan politics is, in part, responsible. But the argument goes a bit further — to the core of an essential ingredient of the American spirit: freedom. Once you boil down the content of policy proposals to fix our health care system, the major sticking point is over how much freedom we want to surrender to government.

And as is often the case, freedom translates into dollars and cents. Looming tax hikes often accompany liberals’ attempts to expand government’s role in the provision of health care. Indeed, a European-style model for health care delivery cannot come without European-levels of taxation.

But for those who are considering a larger role for government in health care, European models offer other valuable lessons.

The major downsides to government-run health care are the absence of patient choice and private competition. With the government calling the shots, patients have virtually no say in their personal health care decisions. And with a government monopoly in control, there’s little incentive to provide value. The only way for the government to control costs is to ration care, so you end up with long waiting lists for almost every procedure.

But there’s a better way to health reform. One that puts patients in control, and allows them to seek value for their health care dollars by demanding higher quality at lower costs.

This alternative vision for health reform would be a universal private solution where patients are able to choose the type of coverage they want and keep it, even when they switch jobs. However, for Congress to make this vision a reality it must fix the current discrimination in the tax treatment of health insurance.

By acting on this idea, Congress could give every American the freedom to choose his or her own personal, portable, private health insurance plan. Specifically, this could be achieved by offering individuals and families the same direct tax relief in the form of a health care tax credit.

Fixing the tax treatment of health insurance is especially relevant to Hispanics — a community that stands to either gain or lose greatly with any health reform. A recent joint study by the Pew Hispanic Center and Robert Wood Johnson Foundation concluded the Hispanic population is expected to rise to nearly 30 percent of the entire U.S. population by 2050.

It’s well known that Hispanics are more likely than other Americans to be uninsured. To some extent, this is because Hispanics tend to work for small firms or in sectors of the economy where employers are unlikely to offer health benefits.

But government-run health care isn’t the answer. Real choice is, and that’s what most Americans want. Politicians in Washington are notorious for blowing smoke, but the truth is this: A larger government role in health care means less personal freedom and patient control. Health care is too important an issue to allow partisan politics to cloud the path to a sensible solution.

Israel Ortega is a Senior Media Services Associate at The Heritage Foundation.

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