Both parties are wrong about Obamacare, but it can be fixed

by Hooman Noorchashm, M.D., PhD.

Published Feb. 16, 2016, 9:57 a.m. ET

The presidential campaign season is underway and a main target of both praise and abuse is the Obama administration's signature legislation – the Affordable Care Act (ACA).

Every citizen of the most powerful industrialized nation in world ought to have access to basic health insurance. In this sense, Obama has been 100% correct - and in the interest of full disclosure, I write this as a Pennsylvania Republican.

But, many Democrats have ignored some basic economics. Do they not see how many working families are now getting hit with premiums they cannot afford and how many small businesses are unable to employ workers because of the ACA requirements? Further Democratic ideas, ranging from a single payer system to expanding the mandates of the ACA to achieve 100% coverage , are even less sustainable.

Meanwhile, on the Republican side, most responses seem too emotional to be useful. Do Republicans not see how absurd it is to suggest repealing the ACA now that millions of people are finally insured? The Republican attack on the ACA is all bravado and no substance – it needs to get real.

One thing Republicans and Democrats share: Neither side is acknowledging the real problem.

The reality is that the price of health care and health care products is artificially exorbitant. That's driving our health insurance investments into bankruptcy and destabilizing the rest of our economy.

Price setting in healthcare is being done independently of the time-tested principles that govern free market systems – because the process is almost entirely missing the consumer's voice.

Pharmaceutical and medical device companies hold near total monopolies over many life-saving drugs and devices. Protectionist patent laws let them set prices and profit enormously for long periods of time. As if this isn't enough, federal legal protections shield most these products from consumer complaints in civil court when problems arise.

This type of protectionism has created a direct conduit into our health insurance investments without any real intervention from free-market controls.

In the case of medical devices, many products with this legal shield don't even undergo adequate safety checks at the FDA. So unsafe devices can continue causing harm to unsuspecting patients, while also pillaging our health insurance investments.

So in a setting where free-market principles are being violated, insuring more people expands the opportunity to extract money out of our health insurance investments. That is the fatal danger lurking in the ACA.

The only solution is to adhere to free market principles. Three logical targets for legislation are: 1) limiting or eliminating monopolies on drugs and medical devices by encouraging real competition to lower prices, 2) limiting long-term patent rights on life-saving products, and 3) allowing consumers full access to our court system, so that meaningful market feedback can be provided to corporations and healthcare establishments.

Rather than fighting health-insurance access for all, the GOP would be far better served by defending free-market healthcare from the clutches of destructive corporate and medical establishment protectionism. Fighting a fundamentally correct idea that every American must have access to adequate health insurance is barking up the wrong tree – and it is simply unAmerican.