Thursday, May 31, 2007

Health Care Proposals

As the various Republican candidates attempt to invoke the spirit of Reagan and be tougher than ever with terror suspects, the Democratic candidates seem to be pitching health care reform. The proposals so far seem to be cautious, perhaps based on Hillary Clinton's experience with the health insurance lobby and its intensive misinformation campaign during the early days of her husband's presidency. Fear of the major health insurance companies does seem to be at the heart of the candidates' timidity. Proposals to effectively force statewide or national group rates would require a significant population of insureds, so as to spread risk, making it difficult to impossible for small insurance companies, or regional insurance companies operating in more expensive health markets, to compete. Similarly, mandating that a basic set of services be covered would likely take the profit out of the high margin, low service plans many companies currently offer to the self-employed.

I personally believe that individual mandates, where each individual is required to purchase health insurance from a set of approved plans, are foolish. They seem designed primarily to avoid including in the federal budget the actual cost of a national health plan, while adding an unnecessary level of bureaucracy to the system. They would create problems for individuals who suffered cash-flow problems, and thus were unable to pay their premiums - something likely to happen when, for example, when a self-employed persons business dips or a family member suffers a major illness. The continued tie of most health coverage to employment perpetuates the same type of problems in the event of illness or unemployment. Would the plans cut off health benefits if somebody was unable to meet the mandate? Would there be what amounts to insurance to cover health insurance premiums under such circumstances?

What would make more sense would be to offer a set of health care options in the same manner as employers - here are your options, here's what they cover, here's your out-of-pocket cost if you want more than the basic plan offers. Offer annual "open enrollment" for plan switching. Use the existing tax system to collect premiums and to determine eligibility for subsidies, even if you classify any additional payment a "premium" as opposed to a "tax". Ensure continuity of coverage, even if at the basic level, despite job loss or a missed premium - figure out if additional monies are owed at tax time.

Insurers should have to compete with the public plan. If private insurers are as superior as their proponents contend, that shouldn't be a problem. If not, why should working people be forced to subsidize their waste and inefficiency?

One approach not yet suggested by a candidate which, at a national level, is not unreasonable is to announce to the states, "As of Date X, you are to have a health care plan that provides universal coverage to state residents, covering (at a minimum) this specified set of services," tied to various federal grants and subsidies. Let states fashion their own solutions within those parameters, and see what works. Federalism... what a crazy idea.

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