Here’s How We Can Achieve Insurance For Everyone Under A Market-Based System

President Donald Trump is a long-time supporter of universal healthcare. Since 1999, Trump has spoken favorably of socialized medicine five times.

Trump’s basic instinct to support universal health care coverage doesn’t appear to have changed since he won the presidency. He recently told “60 Minutes” that his goal in replacing Obamacare was “insurance for everybody.”

His nominee for Secretary of Health and Human Services, U.S. Rep. Tom Price (R-Ga.) wouldn’t go that far. But Price did promise that every American would have “access to affordable health care.” Price also pledged to help people with preexisting conditions and those who would lose health insurance when Obamacare is repealed.

What the Trump Administration appears to be leaning towards is “universal access” as opposed to “universal coverage.” Despite the common claim of people like Bernie Sanders, that is the model of health care in the rest of the industrialized world.

What the Trump Administration appears to be leaning towards is “universal access” as opposed to “universal coverage.” Despite the common claim of people like Bernie Sanders, that is the model of health care in the rest of the industrialized world.

As R Street Institute President Eli Lehrer notes, most of the world does not use single payer. Instead, health care models vary from country. For example, Germany’s model of mixed employer and state-provided healthcare coverage is very similar to America’s. Many countries that do have a government-run health plan find that it covers very few things and citizens have to supplement it with private health insurance. Many countries even have arguably more pro-free market systems than the United States does.

Is it possible to cover nearly the entire country under a market-based system? While most center-right health care scholars have focused on ways to introduce more competition into the health care system, one scholar has been working on a free market universal access plan.

Many countries that do have a government-run health plan find that it covers very few things and citizens have to supplement it with private health insurance.

Avik Roy, a former scholar with the Manhattan Institute and current president of the Foundation for Research on Equal Opportunity, has developed “Transcending Obamacare,” a market-based plan to grant universal access to health insurance.

Roy says the United States government already spends more per capita on healthcare than even countries like Canada, which has a single-payer health care system. “We spend our money on making sure people like Mitt Romney, Warren Buffet and Hillary Clinton have healthcare. That doesn’t seem like a good use of tax dollars,” he told Opportunity Lives.

Roy’s “Transcending Obamacare” plan would provide financial assistance to those who need it, protect people with pre-existing conditions and expand health care competition. He says his plan could achieve near universal coverage at lower costs and with less bureaucracy than Obamacare. How? By shifting around many of the existing government spending on health care and using it to subsidize those who truly need it, such as the poor and the vulnerable.

The “third rail” issue in Obamacare replacement is what to do about patients with expensive pre-existing conditions. “What Obamacare did was mandate that insurance companies take everyone who signs up and charge everyone, sick or old the same premiums,” Roy explained. “What that did was make healthcare more unaffordable for the young, healthy people.” In November 2016, Roy wrote an article for Forbes describing how Trump could cover those with preexisting conditions while getting rid of Obamacare.

“What that did was make healthcare more unaffordable for the young, healthy people.”

“The key is to use a tax credit structure that is means-tested, so that the costs that the poor and the sick are exposed to are capped,” he wrote. “The ACA, for example, subsidizes premiums for eligible people once those premiums exceed a certain percentage of their income. Those caps also work for those with pre-existing conditions.”

“In addition, ‘Transcending Obamacare’ deploys other reforms—like longer insurance contracts and late enrollment penalties—as a way of ensuring that people don’t game the system by jumping in and out of the insurance pool when they’re sick,” Roy added. “We estimate that such an approach can cover more people than Obamacare does.

“We estimate that such an approach can cover more people than Obamacare does.

Roy is also critical of the tax credit plan in many Republican replacement alternatives. Many of them give a universal tax credit that only adjusts with age and is given to both rich and poor alike. Roy says he does not believe a tax credit would increase coverage and could leave out the poorest and most vulnerable Americans.

With the majority of Obamacare’s newly insured covered under the Medicaid system, wouldn’t it be easier simply to expand Medicaid even further? Roy doesn’t think so.

“Medicaid delivers poor healthcare outcomes,” he said. “Medicaid recipients receive a piece of paper that says they have insurance, but they often cannot find a doctor that will see them.” There is increasing evidence that Medicaid expansion has increased trips to emergency room, which in turn raises overall costs to taxpayers.

President Trump has set a worthy goal of “insurance for everybody.” To achieve that goal is possible, while not expanding the size and role of government. Free markets could be used to help achieve it while preserving the innovation and quality service that the American people have demanded. The key is how you shape the incentives and subsidies.

Kevin Boyd is a contributor for Opportunity Lives. You can follow him on Twitter @thekevinboyd.