photo credit: sgroi
Let’s pretend that we are starting from scratch on the health care overhaul push – that none of the existing proposals will be used as the template for a reform bill. In other words, let’s assume that the plan outlined in President Obama’s speech is the primary blueprint for the reform bill that Congress will have to consider. As I predicted he tried to strike a balance between being bold and rocking the boat too much calling both better and worse plans than his “a radical shift” that would be too much for something as economically large as the health care industry.
Now that I have read the entire speech I have four non-starters, one gem, two contradictions, and five questions after his speech that deserve public reaction. I’ll start with the non-starters because they are not non-starters put together, each one must be addressed before anything he proposes can be considered in any degree.
Non-Starters
- Even if I believe and agree with the whole plan outlined in the speech I have to read the bill that is supposed to implement the plan to see if I believe that the bill does what the speech said it would do.
- “This exchange will take effect in four years, which will give us time to do it right.” If it will take four years to get it right, why must we pass the bill now before the details can even be examined? I would never give a used car dealer $1000 when he promises to come back in 3 weeks with the best used car he can find for that price – that only guarantees that in 3 weeks he will hand me the keys to the cheapest car he can lay his hands on. In other words, if it will take four years to get the exchange right then it had better take at least three and a half years of debate over the details before we pass a bill authorizing such an exchange (so that the exchange can go live a few months after the bill, with details, is passed).
- “Businesses will be required to either offer their workers health care, or chip in to help cover the cost of their workers.” One of the major flaws of our current system is the expectation that employers must provide coverage – that is what drive higher prices for individual policies and loss of coverage with a change of employment. Obama’s plan not only allows that, but seeks to expand that flaw.
- “We’ve estimated that most of this plan can be paid for by finding savings within the existing health care system” While I beleive that the current system is full of waste – enough top pay for this plan even – I’m not foolish enough for the line “pass this bill and then I’ll find the savings in the current system. I say “start finding savings in the current system so that you can afford anything like this bill.”
Some might expect that an individual mandate would be a non-starter for me. In a nod to the necessity of compromise and political expediency (I do have a pragmatic bone in my body – somewhere) I will keep it out of the non-starter category and say that if it is extremely limited, as liability-only car insurance is, I could accept an individual mandate. For example, the a plan that I could support for an individual mandate would be one where the insurance offers absolutely no coverage for bills under $5000 except for preventive care. Such a policy would deter bankruptcies but should be available at extremely low rates.
Even the gem in his speech carries caveats, but I basically agree with the idea expressed here:
. . . it will be against the law for insurance companies to drop your coverage when you get sick or water it down when you need it most. They will no longer be able to place some arbitrary cap on the amount of coverage you can receive in a given year or a lifetime. We will place a limit on how much you can be charged for out-of-pocket expenses, because in the United States of America, no one should go broke because they get sick. And insurance companies will be required to cover, with no extra charge, routine checkups and preventive care, like mammograms and colonoscopies . . .
My caveats are that a cap on expenses paid during a given year can be perfectly reasonable so long as the cap is spelled out in the plan in advance and that “no extra charge” can be implemented by charging more for everything to cover the costs of the preventive care. The fact that we feel it necessary to mandate coverage for preventive care is a testament to the perverse incentives built into the current system.
Questions
- Will the “insurance exchange” cross state lines or will people still be limited to purchasing insurance regulated by their state only?
- “All insurance companies that want access to this new marketplace will have to abide by the consumer protections I already mentioned.” This implies that some insurance companies may not be required to abide by those consumer protections . . .
- “The public insurance option would have to be self-sufficient and rely on the premiums it collects.” How is it going to offer plans below the cost of private non-profit insurance companies if it must reply on the premiums it collects? I know the claim that it will do so “by avoiding some of the overhead that gets eaten up at private companies by profits, excessive administrative costs and executive salaries” – the only problem is that “excessive administrative costs” could be spelled faster like this – G-O-V-E-R-N-M-E-N-T. How do they expect to save on executive salaries if they replace five executives making $1 Million per year each and one executive making $3 Million a year in a private company with fifty bureaucrats making $200,000 per year each?
- “We believe that less than 5% of Americans would sign up.” These are the same people that predicted that $1 Billion in Cash for Clunkers would last for 4 months only to find that $3 Billion kept the program open for less than 3 weeks. When the government opened up a health insurance lifeline for people in 1965 they found that 12% of the population was signed up within a year. (Here are details about this and other facts.) What makes anyone believe that this public option will attract less participation than Cash for Clunkers or the original Medicare/Medicaid programs?
- Why must this all come as one omnibus package? You have multiple ideas that you claim have bipartisan support – why not pass each of them individually? If they are each such good ideas would not passing some of them be better than killing all of them together?
Contradictions
- “In 34 states, 75% of the insurance market is controlled by five or fewer companies.” I have no doubt that Utah is among those 34 states and the dominant player is “some places, like the Intermountain Healthcare in Utah . . . offer high-quality care at costs below average.”
- “Some of the same folks who are spreading these tall tales have fought against Medicare in the past, and just this year supported a budget that would have essentially turned Medicare into a privatized voucher program.” Funny, Medicare as a system of vouchers for use in the private market would almost certainly be a vast improvement in our health care system. That would probably be a good start to trimming some of the excessive costs of the current system.
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