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A Common-Sense Plan to Increase Access to Quality Health Care While Lowering Health Care Spending

June 1, 1993

This plan for comprehensive health care reform--first offered during the Clinton administration's tenure and still remarkably relevant today--starts with a common-sense understanding of the health care marketplace.

This plan for comprehensive health care reform--first offered during the Clinton administration’s tenure and still remarkably relevant today--starts with a common-sense understanding of the health care marketplace.

It succeeds by recognizing the real causes of higher-than-necessary spending and waste. For businesses and people now uninsured, the plan offers considerable savings:

  • By repealing state insurance mandates, the plan would reduce insurance costs by as much as 30 percent, some 10 percent of total health care spending.
  • By extending favorable tax treatment to insurance premiums and medical expenses paid directly by individuals, the plan reduces by 50 percent the effective price of health insurance for many of the currently uninsured.
  • By enabling people to self-insure against small medical expenses, the plan promises to reduce consumption by as much as $147 billion a year and administrative costs by $33 billion, resulting in lower premiums for most insurance buyers.
  • By allowing Medicaid and Medicare beneficiaries to contract with private insurers, the plan could end the practice of shifting costs to privately insured patients. Cost-shifting was responsible for nearly half the increase in small group and individual health insurance premiums from 1991 to 1992.

The small group insurance reforms would make affordable health insurance available to more small businesses. It would guarantee that insurance is maintained when the link to a particular employer is broken by job changes, retirement, divorce, or death. More individuals will choose to be insured, and more small businesses will provide insurance, if they are guaranteed insurability, fairness, and portability of insurance once they enter the system.

This is an exciting vision of reform and consumer empowerment. It promises to save tens of billions of dollars a year in health care spending without rationing care, underinvesting in technology or facilities, or any of the other drawbacks that plague national health insurance plans. It does so by freeing individual health care consumers to make their own judgments and decisions about when to buy, how much to buy, and how much to pay.

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Health Care
Author
Joseph Bast is a Senior Fellow at The Heartland Institute. He cofounded Heartland in 1984, serving as executive director then as president & CEO until January 2018. His research and writing focuses on climate change and energy policy.
jbast@heartland.org @JosephLBast
Author
Stuart Wesbury is a policy advisor to The Heartland Institute.