We need Health Care Reform. Premiums and underlying health care costs are rising at an astronomical rate. Most people are one bad incident away from bankruptcy or death, whether they realize it or not. Too many are uninsured. So, after a year of designing health-care reform, we have … an abomination that doesn’t address any of the root causes, as far as I can I tell. And the cost? It’s advertised as a little less that ONE TRILLION DOLLARS – as astounding as that is, it’s based on TEN YEARS OF REVENUE AND FIVE YEARS OF BENEFITS/COSTS. This means the true cost, is on average, $250 Billion dollars. That’s ONE THOUSAND DOLLARS A YEAR FOR EVERY MAN, WOMAN, AND CHILD IN AMERICA.For covering 20 million people, that’s $ 12,500 per year for each person who doesn’t have coverage now.
The much-vaunted public option? It will help and additional 2% of the population – no typo here – to the rolls of the insured. You gotta be kidding.
So, how CAN we afford to insure 25 million or so legal residents who are uninsured?
Well, for starters, a small fraction of those WANT to be insured, but that’s a double-edged sword, because it limits the need for reform in one sense, but creates the need in another. In order to bring premiums down and coverage up, I believe a simple formula can work:
1) Ensure EVERBODY is insured. This is necessary to spread the costs across more people, including the young and healthy (who are still only a swine-flu infection or auto accident away from expensive medical demand). Do the current bills make this happen? Not really, no real teeth in the penalties. Instead of creating a huge new bureaucracy to make this happen, why not just have the government pay a part or all of the premium based on a sliding scale of need? Remember, premiums will be lower than they are now if items 1-6 are implemented. The big issue here is how does the system absorb this much new demand, with the same or less supply? More to follow. There are legitimate concerns about the constitutionality of legislating this, but that doesn’t mean there can’t be strong incentives for this via tax breaks or penalties, or other benefit (handout) reductions. Grade on bills in Congress: F.
2) Implement tort/malpractice reform. I’m not an expert, but it seems obvious that physicians perform much defensive medicine – raising costs and increasing demand for medical services. Build in a process for screening suits based on their validity by a cross-functional panel of experts. Grade on bills in Congress: F.
3) Ensure everybody has skin in the game: incentivize plan with moderate deductibles and co-insurance. This will encourage smart consumption – which will reduce demand on the system. It will lead to more of a consumer class of patients. The flip side of this is to dis-incentivize low-deductible, no copay/coinsurance plans. If healthcare is “free”, people overuse medical care. Grade on bills in Congress: F
4) Either make health insurance tax-deductible or taxable for all. Why are employee plans tax-deductible for employers, but not for private citizens? Removing the deduction for corporations will encourage more of number 3. Grade on bills in Congress: D.
5) Allow/force insurance companies to compete across state lines. Why on Earth is this so hard???? Grade on bills in Congress: F. Not addressed. How could this NOT lower costs and improve benefits?
6) Believe me, I’m all about lower taxes, except in certain scenarios. Here’s one of those. Increase taxes of cigarettes, soft drinks, and junk food and put them into the health-care fund. Big if, though, if people live longer and healthier, it may cost more through more years of social security and Medicare coverage. Dying earlier probably saves money.
Six simple things, none of them in the cards now. Instead we have the monstrosity working through the system. It will cause rationing (how do you add 20+ million people to the demand side, while simultaneously reducing the supply side via lower payments)? It will cause larger deficits. It will cause inflation, recession, unemployment, and ultimately, less coverage, worse health,
What am I missing here? What is our government thinking?
Mike Walsh, President
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