Originally Written on March 30th
and 31st, 2016
Edited on April 23rd, 2016
Written in Coordination with Annie Dean
Table of Contents
1.
Constitutionality of Federal Involvement in Health
2.
Health Care vs. Health Insurance, and
the Individual Mandate
3.
Single-Payer Universal Plans, and Employers and the States
4.
Taxes, Medical Device Sales, and Lawsuits
5.
Taxes and Profits
Content
1.
Constitutionality of Federal Involvement in Health
It is unnecessary to pass a constitutional
amendment specifically authorizing the existence of the Department of Health
and Human Services (H.H.S.). The department is constitutional, and so is
federal involvement in health policy in general, despite the fact that health
is not a specifically enumerated duty of the federal government among the
eighteen powers outlined in Article I, Section 8 of the U.S. Constitution.
The predecessor of the H.H.S. – the
Department of Health, Education, and Welfare (H.E.W.; which existed from 1953
to 1980) – is therefore constitutional. This is because President Eisenhower’s “Reorganization
Plan Number 1 of 1953” – which established the H.E.W. (which was the only
department to be created through presidential reorganization authority) – was
not unconstitutional.
The reasons for this are that: 1) nothing
in the Constitution specifically allows, nor forbids, presidential executive
orders; 2) the congressional Reorganization Act of 1939 gave the president the
authority to reorganize the executive branch; 3) legislative vetoes which would
have prevented Eisenhower’s reorganization plan were not attempted at the time,
and such vetoes were ruled unconstitutional by the Supreme Court in 1983; and 4)
federal departments may not be abolished without an Act of Congress, so any
executive orders attempting to abolish the H.H.S. would be unconstitutional.
Reason #3 is likely the strongest argument supporting the H.H.S.’s
constitutionality.
2.
Health Care vs. Health Insurance, and
the Individual Mandate
In order to ensure that doctors continue
to abide by the Hippocratic Oath they took – requiring them to provide care to
patients regardless of their ability to pay for such services – hospitals
should hold doctors accountable to their oaths. Any doctor refusing to provide
free-of-cost care to patients should be put on unpaid leave for several months,
and the offense should be noted in their permanent record.
The federal government does, and shall,
have the authority to enforce these obligations, if and when states impair the
obligation of such contractual oaths into which doctors enter. To ensure such
obligations would help ensure universal care, thus rendering the health
insurance industry obsolete. This is because health insurance coverage would
not be necessary in order to receive care. This is one of the reasons why the
individual insurance purchase mandate (established by the Patient Protection
and Affordable Care Act; i.e., Obamacare)
is unnecessary.
Additional reasons why the individual
mandate is harmful, include: 1) concerns relating to premium costs, 2)
objections to involuntary servitude through coerced purchase, and the
differences between 3) a tax and a penalty, and between 4) the commercial activity
of purchase, versus the non-commercial
inaction of refraining from purchasing. For all the foregoing reasons, the
individual insurance mandate portion of Obamacare should be repealed by the
Congress or overturned by the Supreme Court.
3.
Single-Payer Universal Plans, and Employers and the States
Although ownership of a health
insurance policy ought not be necessary in order to ensure treatment, health
insurance coverage should be expanded through two reforms. In order to help
ensure that people can keep their insurance policies – or, at least, be able to
afford similarly priced policies – when they 1) lose their jobs, and / or 2)
relocate or move to different states, 1) the tax credit for employer provided
health insurance ought to be repealed, and 2) the purchase of health insurance
policies across state lines ought to be made legal. Reform #2 would be
especially beneficial to people living near state borders, and in
geographically small states.
Neither 1) legal interstate purchase
of health insurance policies, 2) employer provided health care plans, nor 3)
individual purchase of health insurance on the private market; can co-exist
with universal single-payer health insurance systems.
A federal universal single-payer plan
would turn the federal government into the sole purchaser (i.e., the monopsonist) of health insurance policies, thus
precluding individuals and employers from purchasing policies. Also, requiring
all states to establish state-wide single-payer systems, would turn each state
into the sole purchaser of health insurance within its borders, encountering
the same problem.
Additionally, while legalizing interstate
purchase of insurance policies would technically be possible if as many as 48
states were to establish such single-payer systems, this would almost
completely defeat the purpose of the establishment of the United States as a
free-trade zone. Moreover, the risks of such a plan would include states
writing favorable legislation for health insurance companies within their
jurisdictions, as well as states giving undue corporate welfare and numerous
other protections to such companies within their borders.
4.
Taxes, Medical Device Sales, and Lawsuits
There are numerous additional
reasons why the costs of health care and insurance are so high. These reasons
include: 1) the high costs of medical devices, 2) the taxation of hospitals and
their employees, and 3) medical malpractice lawsuits.
Regarding 1) the high costs of
medical devices: medical devices are expensive because profits on medical
device sales are taxed, and also because sales
of medical devices are taxed before profits can be calculated. Sale is
productive behavior, which should not be taxed, in order to avoid discouraging
such productive behavior so that the seller may avoid the tax. The reaping of
profits on medical device sales could be argued as the same type of productive
behavior, although this is more difficult to argue. Either way, taxes on the
sales of medical devices should certainly not be taxed, as this is likely to
decrease the sale and purchase of medical devices.
Regarding 2) the taxation of
hospitals and their employees: the corporate income of hospitals, and the
income deriving from hospitals’ sales, should not be taxed. Nor should the
personal income of the employees of hospitals, such as doctors, nurses, and
other staff. This is because working to earn income is a productive behavior,
and so is the sale of health care, and so are corporate investments made by hospitals.
The income, sales, and investment of hospitals and their staff should not be
taxed, so as not to effectually discourage workers from working to earn income,
nor discourage hospitals from selling and making investments in order to earn
income. Otherwise, such taxation is likely to cause decreases in employment and
hospital profitability, thus decreasing the availability of care.
Regarding 3) medical malpractice
lawsuits: tort reform legislation that limits the awards which doctors and
hospitals may be required to pay to patients who become victims of medical
malpractice in civil suits, should not be passed, and where it exists, it
should be repealed. This is because tort reform limits the powers of juries,
which are supposed to have the ability to decide both the facts of the case and
the appropriateness of the law, and make judgments regarding what compensation
is appropriate. Although passing tort reform would cause hospitals to incur
increased costs, thus reducing their capacity to provide treatment, these costs
would be off-set through the reduction in taxes on hospitals’ sales,
investments, and staff income.
Additionally, other negative effects
of refraining from passing tort reform would be off-set because of the
following reasons. The fact that eliminating taxes on profits from medical
device sales, and eliminating taxes on the sale of medical devices itself,
would have the effect of lowering the costs incurred by hospitals in acquiring
such devices. Additional effects of this include decreases in the costs of
using such devices which are incurred by patients, and increased access to
medical devices.
Thus, since medical devices would be more
easily affordable, doctors and hospitals would be less likely to neglect to
purchase such devices. This would diminish the chances that patients would file
medical malpractice lawsuits against doctors or hospitals, charging them with
failing to use the most up-to-date and technologically advanced medical devices,
in order to make correct diagnoses of their illnesses. Thus, hospitals would
lose less money in lawsuits, and have more money and resources to invest in
treating patients, and additionally the costs of health insurance would
decrease as a result of the decreased cost of treatment.
5.
Taxes and Profits
Each hospital should be allowed to
decide for itself whether to operate as a for-profit, not-for-profit, or
non-profit institution. Currently, about 60% of hospitals are tax-exempt
not-for-profit institutions, and as such, they are supposed to treat low- and
moderate- income individuals and families, and patients lacking coverage.
The Patient Protection and
Affordable Care Act requires hospitals to operate on for-profit bases, which
causes them to lose their status as not-for-profit institutions. This makes
them subject to taxation, and thus, subject to federal regulations, while also
becoming eligible for subsidies and tax credits.
All hospitals ought to be free to
operate on tax-exempt, not-for-profit, charity bases; and all hospitals should
be free to allow doctors to provide free treatment and care, as well as
discounted treatment and care, and pay in installations, for low- and moderate-
income individual patients and families. Again, decreased cost of care will
help achieve reduced cost of health insurance premiums.
While it may result in increased
profitability for a hospital to receive government subsidies and tax credits,
providing tax credits to not-for-profit, non-profit, and charity based
hospitals would be impossible. Tax credits would therefore seem less necessary
to hospitals, if they have the choice to avoid taxation by operating as
non-profit institutions.
Additionally, subsidies would seem
less necessary, due to the cost reductions which all the aforementioned reforms
would bring about. Namely, 1) the elimination of taxation of the personal
income of hospital staff, and 2) the elimination of taxation of profits on
sales of medical devices; in addition to 3) the cost reductions which hospitals
would see by avoiding having to pay for medical devices whose sellers raise
their prices in order to offset the burden of taxes on device sales and
profits.
