First Drain Obamacare Swamp

Chidem Kurdas

penIf President Trump does not establish priorities, his administration will almost certainly fall into the same old patterns as previous ones. Reducing regulation is at the top of the agenda, but the federal regulatory state is a monster of innumerable tentacles and mind-boggling complexity. Which part should be tackled first? What’s the low-hanging fruit?

Fortunately there is a fairly straightforward step Mr. Trump can take as soon as he sits down at the Oval Office. He will thereby address – at least partially – an urgent problem.

Let’s face it, new legislation for health care is laden with booby traps. How to redesign the law without depriving people of insurance is a difficult puzzle. Regulations not spelled out in the “Affordable Care Act” but added or inferred by executive authority are another matter.

Many Obamacare regulations were decreed by executive fiat, not legislation. Barack Obama issued orders by the flick of his famous pen; each and every one a giveaway to some Democratic special interest group behind the goody-two-shoes rhetoric. Mr. Trump can undo these signature by signature, as commentators have observed. In addition agencies and departments issued a mass of regulations not specified in the law; these too can be changed without lawmaking.

It should be feasible is to reduce the requirements for a basic insurance policy without endangering anybody’s coverage. And there’s no time to lose, for the “Affordable Care Act” is fast making health insurance ridiculously costly and unaffordable.

The Act was designed for the big cost increases to show up starting late in the Obama administration, presumably to avoid political liability for Democrats in the 2016 election. This scheme did not help them win Congress or the White House, thanks to the wise choice of the American people. But meanwhile there are reports of shocking increases in insurance premiums. The incoming administration has to deal with the debacle—and address people’s fear that their insurance premium is about to rocket beyond their budget.

Part of the increased cost is the bureaucratic bloat caused by pullulating regulation. Another part is the additional mandates, such as the requirement that all insurance policies cover expensive birth control.

The loss of competition in the industry accounts for another portion. Health insurance and services vendors responded to the abstruse requirements associated with Obamacare by scaling up— the larger the operation, the more customers to bear the administrative costs. Suppliers consolidated and centralized, creating big operations with big administrative arms. They have abandoned certain smaller markets. A number of insurance markets are or will soon be at the tender mercy of a monopoly.

Get rid of the extra regulation and there’ll be less justification for centralized and consolidated providers with extra large bureaucracies. Monopolies will have less advantage over smaller operators. Competition will become possible.

However, monopolies and oligopolies are now well entrenched in this industry and is it imperative that the new President use his deal making skills to control the power of insurers and hospital complexes to raise premiums and prices. They should be asked: What can we do to keep down costs? If we do that, will you engage not to increase premiums, say for the next five years?

Make a strong, durable deal to control health costs, Mr. Trump.  You owe this to the people who elected you. Then sign away.

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