Saturday, August 07, 2004

Babbling Brooks


Today, David Brooks laments that neither the Kerry campaign or the Bush campaign have outlined what they are going to do for the country in the next four years. (In his usual partisan style, although his point is ostensibly the same for both candidates, he is far more critical of Kerry than of Bush.) But then he illustrates what can only be characterized as shocking ignorance or outright dishonesty - he suggests that the candidates should enunciate a new health care policy. You know, like Kerry did:
At the center of Kerry's ideas is his proposal to have the federal government reimburse employers 75 percent of medical bills over $50,000 that a worker runs up in a year. The reimbursement would, in effect, make the government a secondary insurer and ease costs for employers, workers and private insurers.

In exchange for the benefit, Kerry would require employers to offer insurance to every worker and to provide health programs that detect and manage chronic illnesses such as high blood pressure early enough to prevent the diseases from worsening.
The plan also includes the opportunity for uninsured Americans to buy into the same group insurance offered to federal employees, with subsidies for the working poor. Brooks has had about two months to pick up on this fact. I guess he's a bit slow on the uptake, as further evidenced by his remaining comments....

First, without getting into detail, Brooks recites a proposal that health care competition occur not "among health plans, networks and hospital groups - which just leads to zero-sum cost shifting. It should occur at the level of individual treatment, which would encourage not shifting costs, but improving value." This idea sounds positively Gingrichian - and it sounds a lot like eliminating health insurance. Brooks also endorses a proposal by Bill Frist for what he seems to believe is something new - the health savings account (which both exist, and simply update an old idea) - and for a insurance risk pooling plan which sounds both a lot like a watered down version of Kerry's reinsurance plan, and even more like the shuffling of costs Brooks just got through suggesting was such a bad idea.

The health savings accounts described above used to be available under a slightly different name, and were available to people who chose high deductible insurance plans. While there can be a benefit to that type of savings plan for somebody who is young, healthy, and not planning to have children - factors which would permit them to build, as opposed to rapidly deplete, their medical savings - public response was underwhelming. The Gingrich/Frist proposal is not an improvement.
The individual accounts provide a tax “subsidy” for health care at the marginal tax rate which results in health care funding that is inversely proportional to income, the poor paying more for health care than the rich.

That alone should cause us to reject this model of health care “reform.” The health policy literature is replete with other examples of the fundamental flaws of these medical savings accounts.

Of perhaps greater concern is the flexibility that will be allowed in the design of the high-deductible plans. Although the plans would limit out-of-pocket expenses for families at $10,000, this does not include payments made for outside-of-network services. To keep premiums affordable, insurers will fail to provide adequate reimbursement increases for providers, limiting the numbers of providers who are willing to sign the contracts. Also, to provide options with lower premiums, insurers are deliberately diminishing the number of providers available thus saving costs by limiting access. Those families that purchase plans with affordable premiums will find that they do not have the protection of the $10,000 stop-loss limit when they are forced in urgent circumstances to accept available but non-contracted providers. A person with major trauma or an acute myocardial infarction cannot ever be an informed shopper of health care services. Those with high-cost, chronic problems may also find that restricted provider lists could significantly impair accessibility.

The claim that the catastrophic plans will take care of all costs after the HSAs are depleted is a fraud. The managed care PPO products will prove to be severely deficient for those with significant health care needs, but with modest or meager resources. Traditional indemnity catastrophic plans have almost disappeared already and, in the future, will surely not be an affordable option for the average-income individual.

Splitting the health insurance pool into millions of segregated accounts will adversely impact only those who have significant needs by depleting their accounts: the very individuals for whom insurance was designed. Providing catastrophic coverage by marketplace plans that compete on premium pricing (by reducing benefits and increasing cost-sharing) can only result in financial disaster and impaired health care access for the average individual with significant needs.
So, in short, Brooks bashes Kerry for not making, say, a bold health care proposal, even though he has made one. He then sympathizes with Bush for his not having made any new proposals, even though it would be nice if he did so. He then mentions proposed health care "reforms" which not only would fail to extend insurance to the uninsured, but would likely make it even more costly and difficult for the uninsured and self-employed to obtain insurance. Sheesh.

3 comments:

  1. Sounds like David Brooks has a nice high-end health plan and can't figure out what all the fuss is about.

    Anyone who's ever purchased an individual health plan, outside of work, is in for some sticker shock. Without a pool to spread out costs, insurance companies are VERY picky about who they take and at what rates; we were able to purchase a not-terrible plan only by choosing one with zero coverage for pregnancy or childbirth.

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