Howard Barbanel: Americare: The Prescription for America if Obamacare Is Struck Down or Repealed

Last week the Supreme Court heard three days of arguments on the constitutionality of the Affordable Care Act which is more popularly known as "Obamacare." The bill that was signed into law two years ago rolls over more than 2,000 pages of clauses, provisions, mandates and regulations. Former House Speaker Nancy Pelosi famously said at the time that "we have to pass the bill so that you can find out what is in it." Many have said that Obamacare is something a lot more than mere health legislation, rather it contains no end of measures to restructure society and redistribute wealth and income. It has also been called one of the largest tax increases in history.

Among the stealth tax increases buried in the bill are a surcharge of up to 2.5 percent of adjusted gross income on anyone not buying qualifying health insurance as defined by the Federal Government; an employer mandate tax of $2,000 for full-time employees for companies employing more than 50 workers who don't offer health insurance; a 3.8 percent surtax on investment income for families earning more than $250,000, which also includes profits from the sale of a home; an excise tax on so-called "Cadillac" health care plans that "wealthy" people may have; an increase in the Medicare Payroll Tax; a doubling on the tax for early non-medical withdrawals from health savings accounts; Parents of special needs students will see certain tax breaks rescinded because of a new $2,500 annual cap on Flexible Spending Accounts (FSAs) which are now unlimited and which many parents use to pay tuition for these kids.

But wait -- there's more -- there's a new 2.3 percent excise tax on medical device manufacturers for items retailing for over $100. The ability to deduct itemized medical expenses from one's income tax has been made more difficult. Presently medical expenses in excess of 7.5 percent of adjusted gross income can be deducted. There is a new level of 10 percent of AGI as of 2013. If a family has had to deal with traumatic or catastrophic care, more of those enormous expenses will now come out of their pockets. There are new taxes on health insurance companies, on drug companies and the list goes on and on.

In selling the plan to the American people, President Obama said that it would bring the costs of healthcare and health insurance down by covering more people and spreading risk. However in the two years since the bill's passage most Americans are footing appreciably higher monthly bills for their health insurance, whether the expense is being paid by private business, public sector government agencies or individually. Health care costs continue to skyrocket unabated. Insurance companies unabashedly inform their customers that double-digit increases are directly attributable to Obamacare. In public opinion polls, the majority of Americans want to see Obamacare repealed or overturned. Obamacare in great measure cost the Democrats control of the House of Representatives in the 2010 midterm elections.

The tax provisions of Obamacare are not what's before the Supreme Court however. It is the issue over whether the government can compel its citizens to buy something on the private market. The White House says the bill is important to cover millions of Americans who currently are uninsured. However, the bill would not extend an insurance umbrella over every uninsured American at all. There would still be tens of millions who will still be without coverage even if the bill survives a negative Supreme Court ruling, so, while more people would have coverage, a huge number of Americans won't regardless.

The Court might strike down the law based on the government forcing people to buy a product from private businesses. For example, some of the conservative justices asked the government's lawyers that if Obamacare is upheld, what would keep the government from mandating that all Americans buy cell phones for safety or that people buy burial insurance or that people buy broccoli or be compelled to join a health club for the public good? Where would it end? The Administration argued before the court that although their primary defense of the legislation is via the Commerce Clause of the Constitution, at the same time all of this represents a tax or it's within the government's taxing power even though it's not officially labeled as a tax. Trying to have it both ways.

We think the Democrats and Republicans are both right and wrong. The Democrats are right in that Americans need to have some kind of formalized health coverage as we all pay for uninsured people going to emergency rooms in the form of higher health insurance premiums. They're wrong in that the government ought not force its citizens to buy major medical coverage for everything from pediatric, geriatric or bariatric treatments they may never need. The Republicans are right in that: a) the government should not compel its citizens to buy anything on the private market and b) massive redistributive tax increases should not be bundled in with any reforms of healthcare. They're wrong in that there needs to me a measure of basic coverage for all Americans.

The answer is for the government to provide what I'm calling "Americare," which would be analogous to Medicare and Medicaid but for all Americans not on those two existing government plans now. "Americare" would be catastrophic and emergency health care coverage if one were struck by a bus, fell out a window, had a heart attack on the street, etc. It would be paid for by deductions from everyone's paychecks much like Social Security is today. It would be national and fully portable. It would be a public agency and the premiums would be a tax which is fully and unambiguously within the government's purview. Anyone desiring health coverage above and beyond trauma care would have to purchase it (or not) from private insurance companies but would not be compelled to do so. The tax burdens on Americans should also be rolled-back to pre-2010 levels and no one penalized for having a lot of coverage if that's where they want to spend their money. To bring the cost of healthcare down, Congress needs to enact Tort Reform, imposing caps on malpractice lawsuit awards so as to lower the cost of malpractice insurance for doctors and hospitals and lower the cost of endless litigation. Also, private health insurance ought to be available nationally, across state lines to foster greater competition and economies of scale to drive costs down -- and this insurance needs to be completely portable and not tied to one's place of employment. That would be real and meaningful health reform for all Americans.

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