First a word to my fellow Christian Conservatives:

Before you call me a liberal or socialist, read carefully through this list then suggest better ways to make effective use of private resources and still stop the expansion of taxpayer debt. We need to do things differently. The ‘Old Way’ is like the definition of insanity: Doing the same old things but expecting better results  

Why DHHS cannot go back to the way things were before Obamacare: the ‘old way’ things were done needs fixed

While we all know what a disaster Obamacare is, back when it was being considered, I was proposing legislation that would fix the flaws in the old way of doing things. At the time  West Virginia’s two Senators were both Democrats pushing Obamacare and were not interested in the fixes I was proposing. Since Obamacare’s decline, interest has returned to the ‘old way’ which is very workable. But as I said in 2009, it needs some serious tweaks. Let’s look at some of these:

Working poor need to deduct medical insurance on Snap benefit eligibility

Years ago Snap was just called ‘Food Stamps’ and even the working poor were eligible for them. Eligibility and quantity was based on income, number of dependents and qualifying household expenses. Rightfully, things like rent or house payments were on this list. Car payments were not; that is an extravagant convenience. Home insurance and even basic phone service were eligible. But if there was one thing absent it was (and after 40 years still is) a deduction for medical insurance. Even serious and responsible working poor could see that buying home insurance and getting the deduction from their gross income got them more food for their family. But paying for medical insurance even at a discount rate from their employer was an expense that was not deductible and thus they often elected no coverage. In the 1970’s through the 1990’s this caused a great accumulated debt of medical cost for the poor, whom when they were sick or ill, went to the ER which had to, by law, treat them. Taxpayers were saddled with this debt. It could have been a fraction of this cost if the government had allowed this deduction to the working poor. This still needs to be fixed.

Working poor need 100% reimbursement on medical expenses on Federal Income tax lowering their adjusted gross income

The working poor don’t actually pay taxes. However most with children do get ‘Earned income credit’. This check gets them a small paltry to catch up on debts, fix needed transportation, or generally provides needed relief from poverty. And the working poor know more than any other class how to balance finances for survival. Even with insurance payments acting as deductibles for food stamp eligibility, the family has additional medical expenses through the year: deductibles, co-payments, medicine and more. We could continue to let these accumulate as unpaid debt from a class of people that cannot afford them. Or we can let them be paid throughout the year and that money be ‘reimbursed’ to them as a 100% add-on to their ‘Earned Income.’ Yes, the government is still picking up the check on these for the working poor but the debt hasn’t been allowed to accumulate and thus rise through the year with interest and penalties. It also lets the responsible worker feel better about paying these debts as they happen knowing he will be reimbursed come ‘tax time.’ Anything less than 100% reimbursement defeats the cause as it simply would be allowed to accumulate as public debt. Another incentive would be to allow those medical costs and co-pays in arrears at ‘tax time’ to be paid after the first of the year but before ‘Earned Income’ is calculated and reimbursed. Thus hospitals and clinics benefit from late payers.

Anyone making less than $150,000 dollars must get 100% deduction on out-of-pocket medical expenses

For 40 years I have filed my own taxes. But in 2002 when my wife was ineligible for medical insurance (prior existing conditions – more on this later), I accumulated more than 10,000 in medical expenses for her for the year. ($900 a month in medicine and four $1,000 MRI alone). This that year was more than one-third if my $28,000 gross income. So naturally, I assumed this would merit me a big deduction at tax time. Wrong. First: the deduction is calculated by multiplying the expense ($10,000) by 0.07 percent. That $700 sounds good. But then, that is not the deduction. You subtract that $700 from the Standard Deduction (which that year was $7,000 for two). The deduction is equal to any difference above the $7000 standard deduction). It quickly appears that only those making over $100,000 can break even with the standard deduction. While those like me that year can barely meet bills or buy food. Anyone under the $100,000 gross threshold should get at least 50% deductible write-off if not the entire out-of-pocket expense for which they have proper receipts.

Welfare recipients need to have spend-down thresholds eliminated on catastrophic events

Here is a real example: Michele (not her real name) had an accident and was air-lifted to a remote hospital. A working poor woman who had recently changed jobs she was without insurance. Her medical bill upon her release 15 days later was $38,000. Because she had a husband and a child, DHHR said they could pick up the bill if she could reach the spend down limit in three months. Her limit: $42,000. They would NOT pay the bill if she did not reach that debt. She had three months for her and the other members of her family to run up another $4,000 in medical bills. You bet they did. This was one family. Multiply this by millions in this boat. Is it any wonder the past four decades we have racked up billions in Medicare debt? How ridiculous this is. Instead of paying medical bills as they stand we were having families run up additional debt intentionally. We need to fix this.

For all classes ‘prior existing’ rules must be returned to pre-1998 status (24-month ineligibility)

In 1998 Republicans made some badly needed reforms to the Welfare system. But one change was catastrophic. They let insurers talk them into eliminating the ‘prior existing conditions’ clause. At that time, insurers that provided employee insurance policies could not turn down anyone if they paid into the system for 24-months before beginning coverage. This 24-month buffer was to offset possible future charges. What was unexpected is that all insurance companies adopted this policy and used it to deny coverage to people that had even ‘unrepeatable’ risks. Millions of people were thrown off medical coverage and many of them ended up on government doles, expanding our debt.

Separate ‘catastrophic illness’ rider must be available to all (DHHS 100%, $ difference covered if necessary) and an arrangement can’t be negotiated by insurance companies with Congress

For those with prior existing conditions, and certainly those facing catastrophic illness or recovery from life-threatening accidents specialized catastrophic care should be made available at minimal or no cost. If there is one argument for government paid medical coverage it is this. Careers end, people lose homes, families are devastated. America is bigger than this.

Other thoughts: Insurance companies must:

Not discharge covered individuals when limits have been reached.

Not refuse coverage for individuals based on ‘prior existing illnesses’ for coverage other than those conditions.

Meet varying state laws if allowed to cross state lines for coverage.

Be able to adjust ‘minimum’ packages (state compliant) similar to what auto coverage does for customers who can’t afford or need premium policies.

Private policy is the best policy

America works best under its Founding Christian principles including Capitalism. Where possible free market principles must reign supreme. But as you can see, the socialistic policies of Obamacare did not work. Nor did the system as it previously existed. But by tweaking the previous system so that we don’t fall into the same financial pratfalls, nor let the public debt run out of control, America can get this done.