8704 Yates Dr., Suite 205
Westminster, CO 80031
rmfc.org
303-292-1800
Health Care Reform and
Its Impact on Your Family
By Jim Chapman
President, RMFC

Our nation’s health care system is broken. Fifteen years ago, under then President Bill Clinton, a similar effort at reform failed. Now, across the political spectrum, most health care experts will agree that the current system desperately needs reform and possibly new regulations. Unfortunately, most Americans confuse health insurance with access to health care. Health care is not free. Historically, health insurance has been a collective effort by a group of people to gather resources to offset healthcare costs particularly catastrophic care. But, these costs are still born by the individual or by an employer. Historically, many employers have offered either free or cost reduced health care as an employment benefit designed to retain top employees. Thus, many Americans wrongly believe that their health care should be free or significantly cost reduced as a perk of their employment.

Problems and Challenges:
  • Health care spending in America has grown from 7.2 percent of the gross national product (GNP) in 1970 to 16.2 percent in 2007.
  • In 2007, Medicare and Medicaid consumed almost 20 percent of the federal budget. This number is skyrocketing with the wave of “boomers” retirements.
  • Millions of Americans are uninsured.
  • Premiums increased 114 percent between 1999 and 2007 while compensatory pay for workers only increased 27 percent.
  • The average cost of an employer-based insurance policy in 2008 was $12,680 for a family and $4,704 for an individual.

Proposed Solutions:
  • Impose a mandate that every American carry health insurance or face tax penalties.
  • Force employers to pay for 50 to 65 percent of employee premiums or pay tax penalties.
  • Expand Medicaid to households earning less than 150 percent of the federal poverty level; expand Medicaid to childless adults.
  • Provide subsidies to purchase insurance for families earning up to 300 percent of 400 percent of the federal poverty level ($66,000 or $88,000 for family of four).
  • Provide government-funded comparative effectiveness research.
  • Establish a government-run “public plan” option to compete with private insurers.

Problems and Issues with the Solutions:
  • Cost. The current cost for health care reform is between $1 trillion and  $1.6 trillion over 10 years. Taxes will be significantly increased to pay the bill. It will drive the top federal tax rate to 52 percent-higher than Canada, Italy and France. These taxes will cripple the American economy.

  • Competition. The public option/government run plan will eventually extinguish private insurer competitors. Since the public plan will not have to show a profit, it will be able to offer lower rates. Employers who currently offer health care plans will opt for the cheaper public option to save costs or eliminate their health care plans altogether. Private insurance will quickly disappear.

  • Reduction of the profit motive. Health care is a business with a profit incentive. This incentive fuels research towards new life-saving drugs and therapies. It also attracts Americans into the industry providing adequate numbers of doctors, nurses and other health care specialists. This will evaporate with the advent of a public option.

  • Reduction of health care services. Eventually, there will be fewer health care providers. In Canada, under the government run system, patients will often wait 3-6 months for life-saving services. Americans will find that any treatment decision will have to be made by an health care government arbitrator.

Recommendations
  • Avoid a public government run health care system. Costs will spiral out of control and quality health care will decline.

  • Reform the current system: Impose tort reform limiting the amount of damages in medical malpractice suits; implement government regulations which limit premium increases; require insurance companies to insure all Americans who can pay reasonable premiums.

  • Offer tax incentives and credits to Americans to buy their own healthcare from private insurance companies. Americans would carry this insurance from job to job.

  • Establish a community base clinic system for low-income or uninsurable Americans. This could be based on the current Veterans Administration system.

  • Develop and improve alternative health care options such as community based healthcare cooperatives. These not for profit entities are owned and operated by members who pay premiums for primary care.


Rocky Mountain Family Council
8704 Yates Drive, Suite 205
Westminster, CO 80031
(303) 292-1800

This resource may be reprinted without change and in its entirely for non-commercial purposes
without prior permission from the Rocky Mountain Family Council.