It’s been 15 years since John McCain ran for president with a plan to completely revamp our healthcare system. In the interim, Republicans have attempted a nip here or a tuck there, but nothing really big.
Meanwhile, people are genuinely suffering from Democratic health reforms. For millions of people, health insurance has become increasingly unaffordable and increasingly useless in meeting real healthcare needs. If you combine the average premium with the average deductible in the ( Obamacare ) exchanges, a family of four (not getting a subsidy) has to pay more than $25,000 before getting any benefit at all from their health plan. Even after paying those huge sums, people are often denied access to the best doctors and the best hospitals.
Some employer plans, especially in such low-wage industries as fast food, are almost as bad, which is why millions of employees turn down their employer’s health insurance offer. Employees who do sign up for employer plans often cannot afford to enroll their families. Fortunately, Rep. Pete Sessions (R-TX) and his colleagues have come to the rescue with a reform plan that is a pro-patient, pro-family, pro-free enterprise alternative. It is based on three fundamental values.
Under the plan, every family will potentially have the opportunity to obtain health insurance that meets their financial and medical needs. Most readers are aware that Congress effectively abolished the Obamacare individual mandate to buy expensive health insurance regardless of personal needs. But while the mandate to buy is gone, Congress left in place the mandate on the seller side. Obamacare plans are the only insurance that can be sold in the marketplace exchanges and they are the only insurance that qualifies for a full tax subsidy.
The Sessions bill leaves the marketplace exchanges alone and grandfathers anyone who is there and wants to stay. But it allows people to get generous tax relief if they obtain, say, Blue Cross individual insurance that looks just like the plan Blue Cross sells to employers. It also allows people to get tax relief for purchasing limited benefit insurance or short-term insurance. These are alternatives that have lower premiums and lower deductibles. They are likely to better meet the medical and financial needs of young, healthy families with moderate incomes and very few assets.
For the first time in the 80-year history of the IRS involvement with healthcare, the Sessions bill would treat everyone the same, regardless of where the insurance is purchased. Roughly 90% of people with private insurance get it from an employer, and for many decades now employer-provided health insurance (unlike wages) has been excluded from the taxable income of the employee. Yet, according to the most recent estimate of the Congressional Budget Office, families in the top one-fifth of the income distribution are getting four times the tax subsidy from this practice as families in the bottom one-fifth. There is nothing wrong in principle with deductions and exclusions, but if there is a national consensus that we want everyone to have health insurance and the tax system is the primary way that government helps bring that about, then the current system is hard to defend.
Another source of unfairness arises when we compare tax relief in the individual insurance market with tax relief for employer-provided plans. Take a family of four earning $45,000 a year. If this family obtains a typical health insurance plan in a marketplace exchange, the tax subsidy is so generous they will pay no premium at all. Yet if the same plan is provided to the same family by an employer, there will be one-fifth as much help from the government. Among high-income earners, the unfairness is reversed. At $180,000 of income, the typical tax subsidy will cover about one-third the premium at work, but until recently, there was no tax relief at all in the individual market. These discrepancies would disappear under the Sessions bill.
When you talk to a lawyer or an accountant by phone, email, or Zoom, do you worry about whether you are violating a federal law? What about talking to a professional in some other state? I’m guessing the answers are “No.” The Sessions bill would extend those same freedoms to the practice of medicine. The bill would allow employer-purchased personal and portable insurance and access to 24/7 care from primary care doctors for a monthly fee. It would also allow health savings accounts designed to meet the needs of the chronically ill.
In all, this is a refreshing entry into the politics of healthcare.