How to Achieve Universal Coverage with Market-Based Reforms

There’s a lot the U.S. can do to improve our health care system without a wholesale takeover by the government:

• Change the tax code. Individuals should have the same tax incentives as employers who offer coverage.  For example, there could be an income tax deduction of $7,500 for individuals and $15,000 for families.  Over the long-term, people will move to portable, long-term individual insurance.

• Refundable tax credit.  A refundable tax credit of $2,500 for individuals or $5,000 for families would eliminate the tax exclusion for those who get their insurance from their employers.

• Allow the purchase of health care insurance across state lines so that individuals have more choices in plans.  This will encourage a robust market in individually owned health care.  

• Reduce state regulations and mandates on insurance plans to help reduce costs.   There are 1,901 mandates nationwide in 2007, up from 1,843 in 2006.

• Expand tax breaks for Health Savings Accounts.  HSAs  provide for tax-free accumulation and at the same time offer real protection against larges losses.  

• Allow for the growth of convenient clinics.  There are about 700 retail clinics located in Wal-Marts, Targets, and other Walk-in Centers.   Convenient clinics reduce the costs by offering the uninsured an alternative to emergency rooms.  It’s also an inexpensive option for people with HSAs.

• Medical Malpractice reforms are needed to help keep doctors’ insurance costs down which will reduce the costs of care.  For example, states could enact laws that would put a cap on non-economic damages.  

• Provide vouchers for the working poor so that they can purchase insurance from a state pool.