The rising cost of health care has ranked among the top concerns of business for years. For job-creating small businesses, the problem is especially acute. The new health care reform law has added new costs and uncertainty that are making the situation worse. The burdens of the law fundamentally make it more difficult for companies to hire new workers. 

 

The flaws of the recent health care reform law do not diminish the urgent need to address the serious challenges faced by the U.S. health care system. The U.S. spends more on health care than any country in the world. Health care reform that harnesses the free market rather than government bureaucrats to control costs will be far more effective.

 

SOLUTIONS 

 

Congress should replace the new health care law with consumer-oriented reforms that provide greater choices and harness market-forces to contain health care costs.

 

Refundable Health Care Tax Credit 

One interesting idea would be to repeal exclusion for health care provided by employers and instead provide a refundable tax credit to individuals and families for the purchase of health care. As more consumers shop around for lower-cost health plans, market forces will help to control costs.

 

Expanded Health Savings Accounts 

Another positive step would be to expand Health Savings Accounts (HSAs). HSAs are tax-free accounts that are combined with a high-deductible health care plan. Health care costs are paid out of the account. Once the deductible is reached, the insurer takes over payments. Preventative care is often paid by the insurer and is not included under the deductible. 

 

Any money not spent continues to accrue in the account and can be withdrawn tax free for medical expenses. The money in the account can also be withdrawn for any reason an individual may choose, however, non-health related withdrawals are taxable. Because individuals must pay for health care up to the deductible out of the account, consumers tend to make more careful choices considering the costs of care.

 

Health Care Portability 

Finally, health insurance should be made portable, allowing employees to take their health insurance with them from job to job. This will reduce the number of people who find themselves with a gap in coverage as they move from one job to another.