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Health Care: A step in the right direction
Posted by: McQ on Thursday, December 21, 2006

For the most part, with modifications, I could get behind this:
Oregon Sen. Ron Wyden is readying a proposal to provide health care coverage to all Americans through a pool of private insurance plans.

"Employer-based coverage is melting away like a Popsicle on the sidewalk in August," said Wyden, a Democrat and member of the Senate Finance Committee's subcommittee on health care.

[...]

The [Citizens' Health Care Working] group, created in 2003 by legislation sponsored by Wyden and Sen. Orrin Hatch, R-Utah, recommended that the government take steps to guarantee all Americans have basic health insurance coverage by 2012.

Wyden said his plan would allow workers to carry their health insurance from job to job without penalty and would cost the federal government no more than it's paying today for health insurance coverage. It would cover all Americans except those on Medicare or those who receive health care through the military.

Called the "Healthy Americans Act," the plan would require that employers "cash out" their existing health plans by terminating coverage and paying the amount saved directly to workers as increased wages. Workers then would be required to buy health insurance from a large pool of private plans.

After two years, companies would no longer have to pay the higher wages. Instead, Wyden said, they would pay into an insurance pool, based on annual revenues and the number of full-time workers.
I've been advocating getting health insurance away from employers for at least a decade. It's a no brainer. It solves two huge problems which are found with employer based health insurance - portability and pre-existing conditions.

If you buy your health insurance outside of employment, those problems no longer exist. As long as you keep your insurance coverage paid up you can go from job to job and never worry about disqualification due to pre-existing conditions or not being covered between jobs.

However, one modification I would want is to drop the requirement for companies to pay into a pool after the 2 year wage increase. The point is to get businesses completely out of the health care insurance business and that includes requiring they subsidize the health insurance industry.

Let competition within the market moderate the pricing. Subsidy interferes with that mechanism.
Increases in premium payments for individuals and families would be offset by higher wages and subsidies provided under the plan, the report said. As an example, Wyden cited a worker who earned $60,000 last year, and received about $12,000 worth of health care coverage.

The worker's health insurance would be terminated, but his salary would increase to $72,000, which would cover his health care coverage. The plan would bar workers from buying a "bare-bones" health package and pocketing the savings, Wyden said.

"You can't take your $9,000 and go to Hawaii," Wyden said, adding that the tax code would be adjusted so that workers who earn more money would not be thrust into a higher tax bracket.
If a workers health care coverage is like mine he wouldn't get a "$12,000" increase. I pay a portion of my health care out of my salary (as do most workers). Consequently, using their example, I'd get to keep that portion (let's say it's half) and they'd include the portion the company pays in my salary. So in reality, again using their example and my assumption, I'd actually see my salary increase by $6,000 not $12,000.

Secondly, I have every right in the world to determine what health care coverage is right for me, and that would include "bare-bones". Since government is deeply involved in the health care insurance question, it is going to be difficult to back it out completely. Obviously, as a libertarian, I'd like to see it back away completely. However, my guess is it is going to mandate at least minimum coverage. If so, it should be absolutely bare-bones.

A 24 year old should be free to buy the minimum coverage he or she thinks is needed. As most of us know, it won't be the same as a 60 year old. As the 24 year olds matures, their needs will change, but the choice of the level of coverage should be theirs.

It also would mean that the health insurance mandates laid out by the states would have to be addressed. Moving this out of an employer base means individual choice should be given priority and state mandates should become a collection of choices v mandates. That will moderate the average cost of health care insurance and let consumer choose the appropriate coverage for himself and his family at an affordable price point.

Navigating the state mandate question is probably the trickiest part of this sort of a proposition. And as mentioned, I have a problem with the employer mandated payments and government mandated coverage. But I support the general concept and hope to see some movement on this in the next Congress.

More here.
 
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Preexisting conditions are no longer a problem?

Upon what planet do you reside, McQ? I want to move there. Individual policies with preexisting condition exclusions ABOUND. Most policies have them and virtually all of them exclude diabetes. And in excluding diabetes, don’t worry, they will be sure to say that most other problems you have are related, if not caused, by the diabetes, and hence they are not covered. Want to know how I know that??

Actually, they are no longer a problem at my current employer who has open enrollment annually.

And go ahead and try to get an affordable policy as an individual with a chronic condition. You get either a condition you cannot afford or insurance that you cannot afford (and that doesn’t cover s&%t on top of being cost prohibitive), or perhaps BOTH.

Absolutely grand.

American Diabetes Association study on Health Insurance (PDF)

Oh, and life insurance?? Forget about it.
 
Written By: David R. Block
URL: http://
David, one of us has missed a key point, because I don’t understand your objection. The "pre-existing conditions" problem now means someone who is diagnosed with diabetes while with Employer A is basically stuck with Employer A for life if they want to get affordable health insurance. Once insurance is no longer tied to employer, that would not be true.

For people already diagnosed, it’s likely any government-mandated program will have clauses to coerce insurance companies into taking some level of chronic disease cases. In essense, chronic disease sufferers would get subsidized by the rest of the insurance pool.

So how would that be worse that what we have now?

And, on another point that’s always bothered me, why are they "pre-existing" conditions? Why aren’t they just "existing" conditions? {Just a little lame attempt at levity. Sorry.}
 
Written By: Billy Hollis
URL: http://
David, one of us has missed a key point, because I don’t understand your objection.
Yeah, I’m a little lost as well.

Obviously when the change occurs, there will still be pre-existing condition exclusions.

However those with no pre-existing conditions and those buying policies for the first time (without pre-existing conditions) won’t face that problem if they maintain their insurance coverage.

Obviously if your condition is chronic, as Billy points out, the premium may rise, but that’s better than losing coverage (or being excluded from coverage) just because you choose to change jobs.
 
Written By: McQ
URL: http://www.qando.net/blog
Mandatory purchase of health insurance... sounds like a tax.

Since you are already there, why not just take ALL the tax dollars we ALEADY spend on healtcare (about 65% of all healthcare expense) and use it to fund a single payer, or multipayer, insurance plan?

Since administration costs are massive and could be reduced dramatically with a simplified payer plan and universal coverage, we could potentially have universal coverage with a revenue neutral, or close to revenue neutral solution.

Government would be involved in the rules and choice of qualified payers, which they would be in your plan, but not in the medical decision making business.

Oh, and the pre-existing condition problem really would go away, as well as Medicare, Medicaid, Indigent care, and a few other problems that plague our systems.

Cap
 
Written By: CaptinSarcastic
URL: http://
I think the flaws in this proposal is the same flaws that exist now.

1) No competative pressure

Patients when they get sick, money’s no object, so they don’t drive competitive pressures. Health insurance companies try somewhat, but ultimately the buck is passed onto the employers. The Employer is the only one really responsible for exerting competitive pressure. But their hands are somewhat tied. Medical treatment isn’t their core business, so how do they make decisions as to what is fair and what isn’t. They also have to provide their workers with competitive offerings. This triangle of cost responsibility is one of the current problems.

Now we’re taking healthcare out of the hands of the only real driver of competitive pricing, employers, and putting in the hands of the government.

2) Cost associated with litigation
This drives costs directly through malpractice payouts and insurance. It also drives costs indirectly as doctors and hospitals perform unnecessary testing to cover their butts against the slightest chance of litigation.

 
Written By: jpm100
URL: http://
Mandatory purchase of health insurance... sounds like a tax.
I didn’t say I agreed with it, I said it will most likely be hard to get government to back out of its involvement and, at a minimum, we will most likely see a mandatory requirement as a result.
Since you are already there ...
I’m not ... your premise is false.

But playing along:
.... why not just take ALL the tax dollars we ALEADY spend on healtcare (about 65% of all healthcare expense) and use it to fund a single payer, or multipayer, insurance plan?
Instead of that, why not cut all those tax dollars we collect and let those who earn them decide how they’d like to spend them as it pertains to health care? And why not let competition within the market determine the price of both insurance and health care. Oh, and why not put the consumer back in charge of health care decisions and spending and let the market determine it’s worth as we do in most other industries.

Ach, I know ... you just can’t trust people to do the right thing for themselves, can you Cap?
 
Written By: McQ
URL: http://www.qando.net/blog
The problem with pre-existing and chronic conditions is that those people no longer want health INSURANCE. They want a health bill payer.

Insurance spreads risk of injury or bad health among a pool of payers when each person is assumed to have a near-equal chance of illness/injury.

People who are chronically sick like with diabedes are looking for someone to pay thier bills in exchange for paying a smaller amount to an insurance carrier. That is not insurance but a cost transfer to other people. Why should other peopel subsidize your health care?

Higher premium charges for pre-existing conditions simply reflect the higher expected cost of providing health services to that person, not a penalty for being sick. It is unreasonable for chronically sick people to expect to be able to transfer their predictable and expected bills to other people.

Insurance companies do not pay medical bills. The other people in the insurance pool do.

I also don’t see how the government will force people to buy health insurance. When the cost for insurance is still relative to the cost of the service being provided, lots of young healthy people will still chose to decline paying for coverage. Then you will still have a statistic of "millions uninsured" and you will still have millions of illegals getting full coverage for free in emergency rooms.
 
Written By: Roci
URL: http://rociburden.blogspot.com
1) No competative pressure
Insurance companies are in business to make money not lose it. So when other insurance companies try to lure their customers away they feel competitive pressure on the consumer side.

If people are paying for their own insurance coverage, they’re obviously more inclined to shop and get the best available coverage for the least cost.

OTOH, they have doctors and other health care providers trying to get the maximum for their effort they can manage. Pressure on insurance companies from a different direction..

Obviously that means that an insurance company has an incentive to exert pressure on care givers to keep prices low even while they’re under pressure to keep their insurance prices low ... unless of course they enjoy the position of losing money.
Cost associated with litigation
Seems to be neutral though jpm. It is the same under any system.
 
Written By: McQ
URL: http://www.qando.net/blog
As I see it this plan solves the employers’ problem handily without solving the employees’ problems or the problems with our healthcare system, generally. Unless the individual tax code, too, is revised the $6,000 or $12,000 will actually be something like $4,000 or $8,000, respectively (all other things being equal)—presumably not enough to pay for a health plan comparable to what the employee had under the old system. The employer pays no more out of pocket but the employee does.

That suggests to me that, unless some form of healthcare insurance is made mandatory, it will aggravate the present free rider problem.

I’m in favor of free market reforms to our healthcare system but I’m skeptical that demand-side only reforms will actually achieve the results presumed by their advocates.
 
Written By: Dave Schuler
URL: http://www.theglitteringeye.com
As I see it this plan solves the employers’ problem handily without solving the employees’ problems or the problems with our healthcare system, generally. Unless the individual tax code, too, is revised the $6,000 or $12,000 will actually be something like $4,000 or $8,000, respectively (all other things being equal)—presumably not enough to pay for a health plan comparable to what the employee had under the old system. The employer pays no more out of pocket but the employee does.
I don’t disagree Dave, which is why I brought it up. This isn’t perfect by any stretch, but it is, as I entitle it, a step in the right direction.

Another point to keep in mind is as health care insurance costs rise the biggest advocates for government run health care may become business.

I’d prefer seeing this solution (which obviously needs to be worked a bit) in place prior to business deciding it is time to sell out to "universal (govenment run) health care".
 
Written By: McQ
URL: http://www.qando.net/blog
Another point to keep in mind is as health care insurance costs rise the biggest advocates for government run health care may become business.
No doubt about it. Have you listened to the Ford and GM folks lately?

As to your point about having a plan in place first that’s why I keep harping on the importance of reforms to both the demand and supply sides. IMO if we adopt market-based reforms for the demand side only then a fullscale national health system becomes much more likely.
 
Written By: Dave Schuler
URL: http://www.theglitteringeye.com
McQ: hate to say it, but I think you’re chasing the wrong train...

The biggest ’health care problem’ is not insurance, but rather the high costs of medical care... which is caused by (1) advances which allow doctors to better detect what is wrong with us and to fix what they find, (2) our refusal to not knowing (No, McQ, we’re not going to order the tests) and/or not treating (Sorry, McQ, we’re not going to operate and cure what ails you), and (3) our failure to take care of ourselves (diet, lack of exercise, etc) which in turn creates a higher demand for medical treatment than would otherwise be the case.

And, to paraphrase the Meineke ads, we don’t want to pay a lot for that treatment. We don’t even want to pay the full costs for ourselves... and we certainly don’t want to pay more so somebody else can get it for less than they would otherwise have to pay.

That’s why Americans will never accept shifting the health insurance ’burden’ away from employers. Having the employer ’pay’ for it allows us to delude ourselves that someone else is paying for it. We think we get better rates through employer plans than we would if health insurance were sold through Allstate agents. And we think the insurance company is less likely to screw us if we’re part of a employer plan than would be the case if we were on our own. Note: make of this what you will, we trust our employers more than we do the government to do the same.

That’s also why America will never accept ’bare bones’ policies or reducing state mandates. Bare bones policies are a good idea, but only until people with such policies face having to pay for (or do without) treatment for something outside the coverage parameters. Just imagine the field day TV newshows will have featuring the poor families who can’t get treatment for X or Y. That they chose the low-cost model won’t be relevant (for evidence of this, look at the likelihood society is going to come to the rescue of those who bought exotic mortgages and who now face problems). As for mandates, while part of the reason they exist is the lobbying by practicioners, part is a response to society saying they want services A and B and C all included in their coverage (example: new mothers upset over the push to push them out the door are screaming they should get to stay a couple of nights).

And that is why, notwithstanding the crocodile tears shed over the plight of the uninsured and the uninsurable, America will never willingly accept the higher premiums and/or taxes associated with providing health insurance to those groups.

Other than that, not a bad idea...
 
Written By: steve
URL: http://
Pretty good points all the way round, steve.
 
Written By: Billy Hollis
URL: http://
Hey folks... Kari Chisholm here.

First, some full disclosure: I’m working with Senator Wyden - and producing a website called Stand Tall for America. That said, I’m not a policy wonk, and I don’t speak for the Senator or his staff. Any errors are mine.

With that out of the way, I thought I’d try and clear up some questions and misconceptions.

David Block wrote Preexisting conditions are no longer a problem? Upon what planet do you reside, McQ?

While pre-existing conditions (or shall we say, "existing" conditions) are a problem now - Wyden’s legislation would prohibit insurance companies from denying coverage for that reason; also age, gender, and genetic conditions.

Insurance companies love to "cherrypick" the healthy people — which drives up the cost of health insurance. By banning medical underwriting (that’s the technical term) and creating an individual mandate, we pull everyone into the pool - which brings down costs for everyone.

Some libertarians have objected to being required to buy health insurance. I suppose that’s a legitimate philosophical position, but keep in mind that without a mandate we have 47 million Americans without coverage.

Those folks still get health care, but it’s ER care, not preventative — we’ll treat their heart attack, but not their high blood pressure.

If you do have insurance yourself, why should you care about those folks? Well, aside from the humanity of it, you’re also paying for their health care — in your taxes and in your health insurance. This system would get rid of Medicaid - and all those poor folks would have private insurance. (Fully subsidized under the poverty line, and partially subsidized up to 4X the poverty line — $40,000 for a single person, double that for a family.)

Roci said... I also don’t see how the government will force people to buy health insurance. When the cost for insurance is still relative to the cost of the service being provided, lots of young healthy people will still chose to decline paying for coverage.

Under the Wyden plan, you will be required to have health insurance (not unlike car insurance now.) Simply put, you won’t be able to decline the coverage. If you’re employed, the premiums will be paid through your paycheck. Any time you interact with the government, they’ll be able to verify your coverage — like when you walk into a hospital, or enroll your kid in school, etc.

One last point... The highly-respected, independent, nonpartisan fiscal analysis firm The Lewin Group found that it won’t cost any additional money. It just takes the $2.2 trillion we spend on health care now and reallocates it. This can be done WITHOUT a tax increase. And given the downward pressure on administrative costs, competitive forces on the demand side, and the focus on prevention over emergency care — costs will come down, both to private individuals, employers, and to taxpayers.

I’d encourage you to come over to Stand Tall for America and learn more. Join the campaign if it sounds good to you.
 
Written By: Kari Chisholm
URL: http://www.mandatemedia.com
The highly-respected, independent, nonpartisan fiscal analysis firm The Lewin Group found that it won’t cost any additional money. It just takes the $2.2 trillion we spend on health care now and reallocates it. This can be done WITHOUT a tax increase.
Kari: thanks for the disclosure, at least now we understand how your motivations. It’s a given that the uninsured and underinsured do with less health care than those who have health insurance. So how do you propose giving health insurance to everyone, which would invariably lead to additional demand for health care, without thinking that more money would be needed to pay for that health insurance? If you’re doing it without a tax increase, the only alternative is to raise the rates for everybody who now has insurance.... the premium hike America is just lining up to take, right? The only other alternative is to cut the benefits of insurance, to require higher deductibles, higher co-pays, force providers to accept less in payment of their services, etc.
And given the downward pressure on administrative costs, competitive forces on the demand side, and the focus on prevention over emergency care — costs will come down, both to private individuals, employers, and to taxpayers.
Or is your solution akin to that of politicians trying to reduce the federal deficit by eliminating ’fraud, waste and abuse’? Yeah, there’s administrative waste, but no plan will ever eliminate it entirely, and even if you could, you’d end up saving pennies on the dollar... nowhere near enough to provide health insurance to everyone who doesn’t now have it.

What administrative costs go away? People with insurance don’t take care of themselves and end up using ’too much’ emergency care; so why would you think that those now without insurance wouldn’t merely exacerbate the situation?
Insurance companies love to "cherrypick" the healthy people — which drives up the cost of health insurance. By banning medical underwriting (that’s the technical term) and creating an individual mandate, we pull everyone into the pool - which brings down costs for everyone.
Are you kidding? How does limiting the insurance pool to healthy people drive up the costs of health insurance? How does adding sick people to a pool lower the costs? Insurance companies LOVE healthy people. You’re ignoring the basic rule of insurance: lower the risk factor of the group and you lower the payout, add people likely to incur damage and you raise the expectation that costs will be incurred.

There’s more to critique but I’m hungry.
 
Written By: steve
URL: http://

Yeah, there’s administrative waste, but no plan will ever eliminate it entirely, and even if you could, you’d end up saving pennies on the dollar... nowhere near enough to provide health insurance to everyone who doesn’t now have it.
That’s not quite true, steve. Administrative costs of our present healthcare system are in the vicinity of 30%—a huge fraction—and substantially higher than those of any other industrialized nation. Administrative costs alone don’t account for all of our high healthcare costs here but they account for a lot of it.

(1) advances which allow doctors to better detect what is wrong with us and to fix what they find, (2) our refusal to not knowing (No, McQ, we’re not going to order the tests) and/or not treating (Sorry, McQ, we’re not going to operate and cure what ails you), and (3) our failure to take care of ourselves (diet, lack of exercise, etc) which in turn creates a higher demand for medical treatment than would otherwise be the case.
Strong assertions, steve. Please back them up with something other than a priori reasoning. I see that you don’t include iatrogenesis, physician-caused illness, in your reckoning.

Would it surprise you to learn that the number of physicians graduated from U. S. medical schools hasn’t increased since 1980? Or that the reason the number of U. S. medical graduates increased between 1965 and 1980 was a deal cut between the federal government and the AMA to subsidize medical education (the subsidy amounts to roughly $80,000 per medical resident per year today).

We need to address serious supply issues (which includes the number of doctors, hospitals, and intellectual property issues) as well as the demand-side issues that you highlight.

 
Written By: Dave Schuler
URL: http://www.theglitteringeye.com
Dave: I didn’t way administrative costs aren’t a high percentage, I said administrative waste wasn’t... so unless you’re defining all administrative costs as waste, I stand by my point. As for your wanting to include iatrogenesis as a reason for why health care costs are so high, but for people seeking medical treatment for some ailment in the first place, the doctor wouldn’t have the chance to make things worse, would they?

Your point on supply side factors is a good one, but I wonder how much lower health care costs would be if the supply of doctors and hospitals were increased. My guess is that costs would still rise, but at a lower rate.
 
Written By: steve sturm
URL: www.thoughtsonline.blogspot.com
What I would want to know is what will my cost be in the transition? I don’t necessarily think ones wages will go up, certainly not $7,000 worth for the type of job I have.
The cost of health care going down would be improbable, because the companies that supply equipment have gotten use to their high prices and pharmaceuticals are reveling in profit. Since it takes almost a million dollars to train a physician, you think they are going to lower their cost?
I think the pharmaceuticals are pushing the need for more medical services, by creating pseudo problem during their commercials.
 
Written By: VRB
URL: http://hathor-sekhmet.blogspot.com
What Steve said.
Particularly, " (1) advances which allow doctors to better detect what is wrong with us and to fix what they find".
Look at an old medical movie or television show. What kind of equipment do you see in emergency rooms? Almost none, and that isn’t because of low production budgets for the movie. Look at those old ambulances, the Cadillacs which were identical to hearses except for the color. Costs have risen in real terms over the years, and hopefully they will continue to rise as new ways to save my *ss and keep it running smoothly are invented.

*************************************

" we pull everyone into the pool - which brings down costs for everyone."

How does adding someone with an expensive, or potentially expensive, health problem drive down costs? Is this the old "we make it up in volume" joke? I can guarantee you that adding me to your pool will not lower your costs.


"Under the Wyden plan, you will be required to have health insurance (not unlike car insurance now.)"

It is probably not a good idea to mention mandatory car insurance as a successful idea in the same sentence as the plan you are supporting. Are you familiar with "uninsured motorist" coverage? Read your policy. You do have one, right?


"If you’re employed, the premiums will be paid through your paycheck. Any time you interact with the government, they’ll be able to verify your coverage"

Will this verification process be as reliable as the one currently used to verify citizenship?

"The Lewin Group found that it won’t cost any additional money. It just takes the $2.2 trillion we spend on health care now and reallocates it"

Similar to the efficiencies and savings generated by the creation of the Dept. of Homeland Security and other gov’t. reorganizations.
 
Written By: timactual
URL: http://

 
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