I’ve argued for years that health care is not a right because providing free health care automatically encumbers someone else to pay for it or to provide it. Our legitimate rights are a gift from God, not a forced contribution from our neighbors.
I still believe that as a matter of principle, but unfortunately from a political perspective that argument is already lost.
Most Americans now think they are entitled to the best possible medical care and the longest life available, and Democrats have gained enormous power by promising exactly that – with taxpayer money, of course, most of it borrowed from future generations.
Republicans have warned, quite accurately, for more than a decade that the Affordable Care Act is not remotely affordable, but they’ve never offered an alternative that voters could understand, trust, and support. Meanwhile, Democrats keep throwing more premium subsidies at a system that isn’t working and will eventually bankrupt the Treasury. And insurance companies keep more of their own money by raising deductibles precipitously.
President Trump and Sen. Bill Cassidy of Louisiana have proposed an alternative to Obamacare that involves giving annual payments directly to citizens to use for health care instead of sending subsidies to insurance companies. This makes sense, but it tempts recipients to spend the money elsewhere and then come back to the government with their hands outstretched when they find themselves in a medical crisis.
Surely we can do better.
I’m just a 70-year-old guy in Montana with no background in medicine or insurance, but I think I’ve found a better way. I call it PEMA – Primary & Emergency Medical Access, and it will accomplish what the Affordable Care Act promised, but never delivered.
PEMA replaces the ACA’s subsidy-heavy, high-deductible maze with a transparent, layered system:
- PEMA Primary Care – Free basic health care for everyone, funded not by insurance companies but by the government.
- PEMA Safety-Net – Coverage of the front-end emergency phase of major medical crises. Also funded by the government.
- PEMA Catastrophic Insurance – Affordable, income-based plans for long-term specialist, surgical, and chronic care. Sold by private insurers on a marketplace for those who don’t have access to employer-based plans.
At first glance, this may look like nationalized health care. But it isn’t, at least not the kind that Democrats salivate over – the single-payer, Medicare for All that promises mass inefficiencies, cost overruns, and long queues for medical service.
I won’t pretend this moves us away from government involvement. It doesn’t. What it does do is limit government to the two parts of health care where markets fail the most – basic primary care and emergency stabilization – while leaving the rest of the system in private hands. And the government’s involvement is limited to paying the bills, not controlling health choices. That’s not nationalized health care. It’s targeted, disciplined public intervention designed to prevent bankruptcy and chaos at the front end while preserving private competition everywhere else.
Instead of paying for health insurance that may or may not ever be used, but will certainly enrich insurance companies, the government will provide payments for basic health care. That’s what most people need: annual wellness checkups, the occasional flu or cold, maybe a broken bone. Also, coverage for generic prescription drugs to ensure that common treatments remain affordable. That’s PEMA Primary Care.
Then, if a major illness is detected, the PEMA Safety-Net kicks in immediately – with funding of somewhere between $25,000 to $50,000 for services rendered in the first 30-90 days. The actual amounts would have to be decided after actuarial studies are conducted, but they would provide the cushion that prevents patient bankruptcies or refusal of service for fear of the cost. Importantly, the Safety-Net applies per medical episode – meaning that if a patient is diagnosed with cancer and then suffers a heart attack two months later, each event would trigger its own Safety-Net coverage.
Under today’s high-deductible plans, a patient can leave the hospital with $10,000 to $20,000 in bills before their insurance pays a single dime. PEMA eliminates that fear. Equally importantly, it removes a huge cost from the insurance companies, allowing them to offer PEMA Catastrophic Insurance at a greatly reduced price from the typical silver-tier plan under Obamacare.
The insurance component brings us to one of the major innovations making this health care truly affordable. While premiums will still be subsidized for low-income individuals and families, much more important will be the government subsidies offered to offset the annual $10,000 deductible that kicks in after the Safety-Net period ends. On a sliding scale, the poorest patients would pay a minimal amount of that deductible, while the highest-income patients would be responsible for the full $10,000. The government picks up whatever is left over.
And here’s why it works economically:
The PEMA system benefits all the players. Patients will pay less for preventive medicine and primary care (actually nothing). The government will pay less in total compared to the massive amount spent on Obamacare premium subsidies, because catastrophic care insurance is cheaper to begin with and the Safety-Net will only be accessed by a fraction of the total number of users of PEMA. Even insurance companies will benefit as they can reduce their own expenses by handing off emergency care to the government.
Once the Safety-Net maximum days or dollar amount has been reached, the patient’s deductible kicks in, but for maximum efficiency and to guarantee that health care is always available, the deductible bill is sent to the government for payment. The individual will repay the government according to the sliding scale by establishing a payment plan or by acknowledging the debt when filing taxes.
Most importantly, there is no interruption in continuity of care as a result of economic hardship. Any unpaid deductibles or premiums simply convert to a repayment obligation, just like taxes or student loans. PEMA guarantees care first and then ensures that everyone contributes their fair share over time.
Did I mention that employer insurance plans could also participate in PEMA Primary Care and the Safety-Net? PEMA would strengthen employer insurance by removing the most expensive part of care while leaving employer deductibles and benefits untouched. This would guarantee buy-in from employers, who would not be tempted to drop insurance and offload the workers to a national system as they would with Medicare for All. Insurance costs would be cheaper for employers as well as for individuals and the government. Employer plans would also typically have much lower deductibles than marketplace plans, so those would remain the responsibility of the employee without government assistance.
So what makes the system pay for itself? Just as with the ACA, each person who doesn’t have insurance through an employer will sign up on an annual basis. Everyone, including those on employer plans, would be assigned a uniform health ID number to ensure continuity of service and avoid fraud. Premiums for PEMA Catastrophic Insurance would begin on Day One of enrollment, just like any insurance plan, but the premiums would be much lower because government covers the two most expensive phases – basic primary care and the early emergency phase.
One of the pleasant side benefits: less government bureaucracy. The management of the program would filter through the insurance companies instead of through the government. Every time a medical bill is submitted for a particular health ID number, it goes directly to the insurer of record for that patient. The insurer then determines if the service is primary care (bill the government), emergency care during Safety-Net period (bill the government), or catastrophic care (handled as described above).
Customers would purchase essentially the same catastrophic plan at the same price from all providers, but just as with Medicare Advantage, insurers could sweeten the pot to attract business. Thus, some plans would offer dental coverage or vision coverage in addition to primary care. And every insurance company would have an incentive to provide timely and effective customer service if they wanted to keep your business next year.
If any politician can come up with a better plan than this one, I’d like to hear it.
If the recent government shutdown made anything clear, it’s that entitlements are not going to go away. So rather than throwing good money after bad with endless tweaks of failed Obamacare, let’s put in place a system that restores trust, sanity, and responsibility to health care.
I may be 70, and enjoying Medicare for myself, but I’m thinking about the world we will leave behind. PEMA is the conservative, limited-government answer to a problem that isn’t going away.
If anyone wants to brainstorm this further, I’m available.
