Opinion Pieces

My Health-Care Alternative for the Old and Poor

Replacing Medicare and Medicaid with a simple debit card will result in better-quality care, for less.

It's time to move beyond ObamaCare.

Whether it is struck down by the Supreme Court, defunded by Congress, or simply collapses from its unsustainable costs and the impossibly complicated bureaucracy it seeks to impose, ObamaCare won't work. It will depress the economy, increase the national debt, discourage medical innovation, and erode the quality of health care.

The fundamental mistake of ObamaCare's architects is that they refused to recognize the systemic failure of government-provided health-care. Medicare and Medicaid had begun malfunctioning long before Nancy Pelosi bribed and bullied Congress into approving President Obama's health-care bill. Now we need to begin assembling the components of a replacement plan that works better than ObamaCare and more efficiently than the current system.

To that end, I am introducing the Choice in Healthcare Act, which will create a voluntary, 10-year pilot program for a new health-care delivery system, beginning in June 2013.

Geared toward low-income individuals and seniors, this simple plan will replace participants' Medicare and Medicaid benefits with roughly equivalent funds put on a debit-style "Medi-choice" card. Participants can then use their card to buy the health insurance of their choice on the open market and to pay for out-of-pocket expenses such as co-payments and deductibles. In succeeding years the card's funding level will be adjusted for inflation, and any unused funds will roll over to the next year.

This plan will streamline health-care delivery by replacing hospital insurance, Medigap, prescription-drug programs, Medicare and Medicaid with a simple debit card. Instead of dealing with the notorious restrictions, exclusions and red tape of government-provided health care, participants will be empowered to control their own health care and force insurers and providers to compete for their business. Medicare and Medicaid beneficiaries will be freed from these failing, regimented programs, and they will gain the same access and choice in health care enjoyed by other Americans.

The pilot program would be launched in eight counties in California's San Joaquin Valley, an impoverished area whose residents are woefully underserved in health care. According to a December 2005 Congressional Research Service report, "By a wide range of indicators, the SJV [San Joaquin Valley] is . . . one of the most economically depressed regions of the United States" and is "suffering from high poverty, unemployment, and other adverse social conditions." The report found that the region had nearly double the percentage of Medicaid participants (22.9%) compared with the national average (11.7%) and around half the ratio of active doctors (1.4 doctors per 1,000 people in the San Joaquin Valley, compared with 2.3 doctors per 1,000 nationwide).

The valley's poorer inhabitants are precisely the kind of people whom government-provided health care is supposed to help. Yet their access to quality care is severely limited due to myriad restrictions and bureaucratic obstacles. As a result, local hospitals, doctors and medical professionals have shown enthusiastic support for our plan.

The pilot program's costs will be minimal, since it will largely redirect today's inefficient government spending. But its potential rewards are high. It will constitute a voluntary real-life experiment—applying only to those who choose to participate—in using choice and competition to eliminate the waste, inefficiencies and restrictions of the current system. Best of all, if it works in the difficult conditions of the San Joaquin Valley, it will likely work across the country—with essentially no additional costs.

In fact, if the program is implemented on a large scale, it will have beneficial ripple effects throughout the health-care sector and the national economy. It will encourage widespread entrepreneurship, innovation and competition as providers seek to meet the needs of empowered consumers. It will harness the free market to drive reforms that will benefit all Americans, particularly the poorest.

Big, powerful reforms don't have to be complicated. To improve health care, you don't need a thousand-page bill like ObamaCare that engineers a government takeover of one-sixth of the U.S. economy and criminalizes the failure to buy a health-insurance product. The program outlined in the Choice in Healthcare Act could be a crucial part of an affordable, free-market alternative. It deserves a chance to prove its effectiveness in the real world.

This opinion editorial first appeared in the Wall Street Journal on June 22, 2012.