Pursue Conservative Health Care Reform – Fight Predatory Federalism

posted in: Health Care, Politics | 0
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Since the Supreme Court’s infamous 4-1-4 ruling on the Affordable Care Act in June, nearly two dozen states have grappled with whether or not to comply with the first of many forthcoming deadlines found in the rules written (and still being written) by the functionally unconstitutional entity known as the Department of Health and Human Services (DHHS).

November 16th is the deadline, and a flurry of letters are finding their way to Kathleen Sebelius’ desk this afternoon telling her they will not comply with the requirement to set up an exchange. The great debate has been over the enticement written into the law:

  • Either states create the exchanges, and the Feds will not only pay for the administrative costs but also the cost increases of expanding Medicare and Medicaid, or…
  • The Federal government will set one up for them and not give states the authority to direct their exchanges.

The false choice was tantalizing for many governors and state legislators, but tens of thousands of organized Constitutionalists stared their governments in the eye and told them to act like the soveriegn states they are. The Federal government never intended to NOT direct states and their exchanges, they merely wanted to entice states into giving up their Constitutional functions and legal rights to implement a federally-mandated atrocity. It was a destruction of the dual-federalist roles of state and federal functions while disgused as a “states’ rights” issue, pitting Conservative against Conservative for several months. Thankfully, nearly half of all states have opted out of the first step in Obamacare’s tentacle-growing implementation.

So, from Jan Brewer (R-AZ) to Rick Scott (R-FL) and Scott Walker (R-WI) to Rick Perry (R-TX), governors nationwide are taking the political gamble of forcing the Feds to not only implement the illegal healthcare exchanges, but also bear the cost of them. Thanks to a small, but significant silver-lining in the June SCOTUS ruling, the Feds are not allowed to alter Medicare/aid funding as any kind of penalty or compensatory difference for not complying. So the Federal government is on the hook for the entire bill, which will force voters to truly grapple with the consequences of unconstitutional, progressive policies. It also protects the thinning veil between state and federal roles. It’s very simple: managing the health care industry is not found among the enumerated powers of Article One, and is therefore not a legitimate constitutional function of the Federal government.


Health care is expensive.

Insurance policies, by default keep growing. Costs are out of control, administration is mind-numbingly complex and abuse of a once-charitable industry is making it more difficult for everyone to access good health care. That is the status quo. But it was not always that way.

Beginning in the late 60’s and early 70’s with HMO’s, Medicare and then Medicaid, the Federal government and multiple states began creating an incestuous web of regulations to make it more accessible to the poor and indigent. Their plan sounded reasonable: provide for the poorest and oldest among us for a small tax, and have states provide the administration of it. The states would pay for half, and the feds would match it. Nevermind that any kind of program is an end-run around the Constitution, which forbids the federal government from being involved in the industry at all.

Because of increased costs, more people began needing insurance, even for preventive care. Add to this the cost of outragous malpractice claims, general lawsuit abuse, employer regulations and 50 ever-changing state standards for health care. Every special interest in the nation has lobbied for various mandates and protections in a market that used to be free and open. As the market changed, so did the choices. Now, our options are between health insurance plans, not services or quality. Creating a third-payer system in an market that is most secretive in how it charges for services is illegal in most other industries, but not in health care. In fact, we end up blaming the insurance companies or providers for lack of expected care, because we no longer HAVE to hold ourselves responsible for the lineup of services invading our bodies with every visit. We simply show up to a provider the insurance company chooses, hand them a card and walk out. (two or more hours later)


The current system is not a case of the free market failing the little guy and favoring the wealthy. Right now:

You cannot choose one medication over another, even beforehand, on the basis of cost;
You cannot choose one hospital over another based on the quality of management and nursing support;
You cannot choose your doctor based on hourly rate or volume of patients;
You cannot choose what procedures you want or need based on how much they cost from one hospital or doctor to the next.

This is insane.

Health care costs have become so convoluted, they have disappeared into the thousands of pages of paperwork related to one person’s health. And the regulations for the industry have become so onerous that more than 50 cents of every dollar goes to the administrative or base hospital charges, rather than into the skilled care itself. Only 1/4 even goes to the doctors, who themselves spend between 20-40% of their fees on legal protection, and only 2-5% ends up in the hands of the insurance companies underwriting your care.

Read that again: only 2-5% of your health care costs are profit in the hands of the insurance companies. They are not the boogeymen.

Doctors are finding the cost of their education rising to $250,000 or more, just to find they can only take home $100-200,000 a year for 12 years of education and 100 hr work-weeks. They are not the bad guys.

There is no single scapegoat, and there is no simple solution. But one at a time, each must be addressed, and with some sacrifice all-around. The concept of law has been so widely perverted by competing interests that doctors’ associations are pitted against advocacy groups, and insurance companies battle with regulatory commissions. This doesn’t help any of them, and any temporary band-aid is soon negated by a compensation for it elsewhere. We have real problems in health care, but it must be resolved with free-market-centered reforms.


John Mackey is the co-founder and CEO of Whole Foods, a national grocery chain that specializes in organic, unprocessed foods and natural remedies. It is an immensely successful venture, with 340 stores worldwide and 73,000 full-time employees, all of which qualify for a custom health care plan the company has devised. In 2009, amidst the health care reform battle, Mackey wrote an op-ed in the Wall Street Journal that compiled the most important and understandable reform principles needed in health care, and presented them as an alternative. The current law take almost none of them into account, and simply changes who pays for it rather that moving the industry toward a real free market.

These solutions are not the be all-end all of reform, but they are the most fundamental change we could advocate that would take our current system and move it closer to one that is cheaper, more accessible, freer and more flexible to changing patient needs and scientific discoveries.

• Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs).

The combination of high-deductible health insurance and HSAs is one solution that could solve many of our health-care problems. For example, Whole Foods Market pays 100% of the premiums for all our team members who work 30 hours or more per week (about 89% of all team members) for our high-deductible health-insurance plan. We also provide up to $1,800 per year in additional health-care dollars through deposits into employees’ Personal Wellness Accounts to spend as they choose on their own health and wellness.

Money not spent in one year rolls over to the next and grows over time. Our team members therefore spend their own health-care dollars until the annual deductible is covered (about $2,500) and the insurance plan kicks in. This creates incentives to spend the first $2,500 more carefully. Our plan’s costs are much lower than typical health insurance, while providing a very high degree of worker satisfaction.

• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits.

Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair.

• Repeal all state laws which prevent insurance companies from competing across state lines.

We should all have the legal right to purchase health insurance from any insurance company in any state and we should be able use that insurance wherever we live. Health insurance should be portable. This can still be accomplished at the federal level, with respect to the Constitution, because it is enforcing TRUE interstate commerce. Laws within the states would still apply to native providers and insurers, but the public would be allowed to carry their plans purchased elsewhere.

Repeal government mandates regarding what insurance companies must cover.

These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.

• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year.

These costs are passed back to us through much higher prices for health care.

• Make costs transparent so that consumers understand what health-care treatments cost.

How many people know the total cost of their last doctor’s visit and how that total breaks down? What other goods or services do we buy without knowing how much they will cost us?

• Enact Medicare reform.

We need to face up to the actuarial fact that Medicare is heading towards bankruptcy and enact reforms that create greater patient empowerment, choice and responsibility.

• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren’t covered by Medicare, Medicaid or the State Children’s Health Insurance Program.

John Mackey further explains his perspective here, on the John Stossel show:


The Conservative movement needs to rescue the Right from itself. We have for too long not been willing to fight the war, and hone our message to attract the masses to real reforms. The left has thrived with emotional rhetoric, but these reforms are real changes that give real choices to real people. The public wants these freedoms, and they want cheaper health care.

Some physicians are already trying new models for their own reform-minded practices, but they frequently run into obstacles, legally and commercially. If government has any role in the free market at all, it is to “make regular” the exchange of goods in a market, rather than “regulate” it through “management.” Direct Primary Care is one of many options doctors are trying, which allows them to have a practice they can enjoy, and really makes a difference.

Then there are administrative relationships that need to be reformed. Point of service, emergency, home health care and end of life services will continue to drive health care costs like nothing else, and something must be done that allows private enterprise to spread those costs across their business platforms. Currently, the opaque nature of the health care industry appears to be the largest factor in driving costs, but there are many elements that need reform. Compliance is more important than competitiveness and with Obamacare, quantity will become more important than quality.

We need to make sure real changes are pursued that honor both individual lives and their liberties, without stealing from the rich to pay for a system that will still be too expensive unless we’re willing to do what it takes to make it cheaper, like anything else we buy.

And that’s a message we can sell to the folks next door.