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Obamacare is beyond repair

Let’s offer Americans more health care choices

December 3, 2015

Joseph and Michele DiBello of Rydal, Montgomery County, liked their insurance plan from Independence Blue Cross. At $662 a month, the plan, with a $6,000 deductible and a pre-tax health savings account, allowed the DiBellos to manage medical bills for themselves and their four children.

Even though the president promised the DiBellos - and millions of other Americans - that if they liked their plan they could keep it, their policy was terminated and forbidden by the Affordable Care Act.

Mandated to buy a plan permitted by Obamacare, the DiBellos' deductible has more than doubled and their premium has risen to an astonishing $1,141 a month. The family has also dealt with misinformation, cancelled policies and gaps in coverage seemingly due to incompetence at the law's "Marketplace Exchange."

The Obama administration claimed taxpayer subsidies would offset the higher costs of insurance policies caused by the new law. But the DiBellos, and millions of other middle-class families, are finding that the subsidy covers just a small fraction of the higher costs for health care they now must pay.

Pennsylvanians buying coverage on Obamacare's exchange are now seeing average premium increases of 11 percent for 2016. These higher prices, however, don't equate to better plans. As a recent headline in The New York Times stated, "Many Say High Deductibles Make Their Health Law Insurance All but Useless."

Costs are also increasing for employers under the law. Obamacare's medical device tax has caused companies like B. Braun in the Lehigh Valley to forgo expansion plans while new mandates and regulations are crushing many small businesses that can no longer afford to offer health insurance to employees.

Meanwhile, insurers face rising red ink. Due to unanticipated losses of $222 million from its Obamacare insurance lines, Western Pennsylvania's Highmark is replacing its most popular plans for 367,000 beneficiaries with policies that have higher deductibles and fewer choices in doctors and hospitals.

Highmark is not alone. Insurers lost an estimated $4 billion last year on Obamacare. Twelve health insurance co-ops created by the law have folded, resulting in approximately 400,000 individuals and their families losing coverage. The country's largest insurer, United- Health, now says it is reconsidering its participation in Obamacare.

The mistake made by the law's authors and supporters was underestimating future costs and overstating, by 2.5 million, the number of healthy and middle-class Americans who would enroll in Obamacare. These Americans were supposed to subsidize the higher cost of care for older and sicker enrollees. But as prices for insurance continue to rise, healthier, wealthier and younger Americans are finding it less expensive to go without insurance and pay the tax penalty instead.

This trend, where only the sickest and costliest individuals enroll in Obama-care, is known in the insurance industry as a "death spiral." Fewer healthy people paying inflated premiums drives up the per person cost of providing insurance, which, in turn, drives premiums even higher, exacerbating the problem until the program collapses.

It's not too late to undo the damage that many of us predicted when this law was enacted in 2010. The first step is repealing Obama-care, which the Senate likely will vote to do this week.

Instead of having the federal government control health care decisions, dictate prices and essentially socialize the health-insurance industry, we can leverage the power of the marketplace to force greater competition and empower consumers to decide what works best for their families. Toward that end, some commonsense reforms would build a foundation for a system where you could get the care you need at a price you could afford.

First, eliminate the long-standing unfair discrimination against nonemployer-sponsored coverage that's built into our tax code. Individuals who buy insurance should receive the same tax deduction that employers enjoy when they buy health insurance for their workers. This would immediately make health care more affordable for millions of uninsured Americans.

Second, individuals and businesses should have the right to buy an insurance plan from anywhere in the country. The current system forbids individuals and employers from buying a more affordable plan with fewer mandates available for sale in another state. Changing this law would compel health-insurance companies to compete with each other across the country, much as life and property insurers do today. In addition, companies and individuals should be permitted to band together, or "associate," to use their buying power to acquire more affordable coverage.

Perhaps the most glaring hole in Obamacare is the absence of tort reform. Everyone agrees that patients have a right to hold accountable a medical professional who is negligent, but the legal system is rife with abuse. Frivolous lawsuits lead to higher malpractice premiums for doctors. They also increase the practice of "defensive medicine" where physicians order expensive tests and procedures that are medically unnecessary to reduce the risks of a lawsuit.

Lawsuit reform would reduce waste in the health care system and help taxpayers, too. The nonpartisan Congressional Budget Office estimates clamping down on frivolous lawsuits would reduce federal deficits by $65 billion over 10 years.

These are just a few of the thoughtful solutions that would give families greater choice in health care while reducing costs for taxpayers. We've tried the "big government" approach. The result has been higher premiums and deductibles, fewer choices in plans and doctors and job losses. It's time to admit failure and take a different tack for the sake of our economy, our health care system and families like the DiBellos.