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The Affordable Care Act was supposed to lower healthcare costs, but it has done just the opposite. Why? Because it ignored the realities of how markets work.
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Script:

Healthcare costs are skyrocketing. Since the Affordable Care Act passed in 2010 health care costs have gone up by double digits each year.

The health care bill did get more people insured and helped with issues like preexisting conditions, but the problem with the healthcare law isn’t what it tried to do, it’s what it failed to do: reduce costs. The solutions to the cost problem is with the free market and competition. Here are just three ideas that could make a huge difference.

Number 1: We can roll back the tax burden on insurance companies. The ACA added a billion tax on health insurers, which made them have to charge more to consumers to cover their costs. Taxes roll downhill so a tax on insurers means higher costs for all of us.

Number 2: We can lower the regulations on health plans. The ACA has a lot of requirements that force insurance plans to cover an incredibly big list of benefits. If you want a bare-bones insurance plan that simply covers catastrophic events like a car accident or cancer you currently can’t get one. By boosting the benefits of every plan it restricts competition and drives up prices by forcing smaller health insurers out of the marketplace. Low-cost catastrophic plans that are normally purchased by younger, healthier people are no longer available because of the ACA requirements.

Introducing as many health insurers to the marketplace as possible can drive down prices by encouraging businesses to compete to cut costs. The ACA did the exact opposite: Less competition and higher prices.

Number 3: Encourage medical innovation. The cost to bring a new drug to market already exceeds two and half billion dollars. And the ACA places an additional twenty-two billion dollar tax burden on innovator drug companies, the same businesses that produce lifesaving medications and cures for those in need. Punishing drug producers forces them to charge even higher prices to make up for the lost money in research, development, and taxes.

If we encourage, not punish drug makers it will lead to more breakthroughs and lower costs–a win, win for all of us.

As healthcare costs skyrocket, don’t forget that the free market is our best chance to rein them in.
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