House Republicans ushered in a major legislative victory in passing their healthcare bill. After the first attempt was scuttled by the right, the latest bill allows more freedom for states to experiment in their own markets. Despite howls from the left, if Republican action on healthcare were to end with the passage of this bill, Obamacare would largely remain the law of the land. The new bill does not repeal the underlying structure of the law and accepts its basic assumptions. It only lessens regulatory requirements for insurers and states and reduces federal subsidies for consumers. This is not a long term fix to the healthcare market.

In any other insurance market, if people called for insurance against pre-existing conditions they’d rightfully be seen as moronic. So why do politicians get away with it when it comes to healthcare? Ideology is a major factor driving people, but there is a far more simple one, it’s not about health insurance, it’s about healthcare payments. The political debate has artificially linked insurance coverage and paying for healthcare and the government has co-opted insurance companies to handle regular and known care. If you’re looking for a reason why the healthcare market is so dysfunctional, look no further. You don’t buy insurance to pay for gas for your car. You don’t buy insurance after your house has burned down. By artificially tying in all aspects of healthcare expenses to insurance, the government has added thousands of dollars to premiums and created massive inefficiencies in the market.

If Republicans want to make major progress in fixing the healthcare market they need to decouple insurance from its role as payment manager. Insurance should be used as intended, as a hedge against unknown events, not as a vehicle to force people to pay for others’ known losses. Those too irresponsible or unable to maintain insurance when a long term illness is discovered could be assisted by the state by directly subsidizing their care on an income adjusted level. This would greatly decrease the cost of premiums and encourage far more people to gain coverage, reducing future enrollment in such a program. Health insurance is not healthcare and until policy makers reverse their treatment of it as such, the market will remain broken.