Well, gee whiz, Idaho, what happens to the poor schmuck who gets cancer of the uvula and then finds out that having tonsillitis when he was twelve is a pre-existing condition, and fuck him? They’re doing stuff like that, did nobody tell you?
And you want them to be further free of burdensome regulation? How much of their stock do you own?
Ah, but what’s a small predictable sum to one person is a debt that cannot be afforded to someone else. What happens when the predictable small sum of a doctor’s office visit turns into small but still daunting 4 figure bill for diagnostics? Catastrophic coverage doesn’t apply there.
And what of those who are priced out of ability to purchase any offered insurance product? They just have to take their chances and hope real hard that nothing happens to them?
Ah, but this is an argument for redistribution, not refashioning the healthcare system. If you want to subsidize poor people’s healthcare, you should do that via direct subsidy.
Then that will be a warning to others! The free market works!
I would argue that one of the most glaring problems in health care is fundamentally a problem of income inequality.
What is an easy price for the upper incomes can be a real trial for the lower ones. If you’re just a little too rich for Medicaid, you can be really screwed.
If you feel this way, then wouldn’t the most direct solution be subsidizing care for the poor? Or better yet, since the poor know their preferences better than government bureaucrats, why don’t we just instate a negative income tax and let them decide what to do with the money?
Ah, but one doesn’t have to be “poor” to not be able to readily absorb random $2,000 healthcare bills. The median individual income is around $19,000 before taxes. A single bill that’s more than 1/10th of one’s annual take-home is significant. Not as significant as it would be to someone living below the poverty line (established now at $10,830 for an individual) but still hard to swallow.
And how poor is poor enough for a direct subsidy? (As it stands now, in every single state, you can earn less than poverty level wages and still not qualify for Medicaid, if we’re using that as any sort of standard.) And how much would be subsidized and of what kind of care? If we subsidize a $2,000 bill for someone earning $19,000 a year, do we subsidize a $4,000 bill for someone earning $38,000 a year?
Because many of us without insurance aren’t “poor” by most people’s definition. I’m self-employed with pre-existing conditions, and cannot get insurance at any price. A check for negative income tax will still get me no insurance. If your plan takes effect, my best bet is to stop working and actually become poor . . . which is pretty much my only option now.
I really want a Negative Income Tax. But remember that Friedman advocated that in 1962, before Goldwater & Reagan remade the conservative GOP. Today, the leaders of the GOP call that kind of welfare spending unacceptable.
Okay, so we now have a basis for some sort of common consensus. Let’s build on that.
To be honest, a lot of conservative solutions to health care are not very well thought out. Many of them seem to think that tort reform is all that’s needed, and that’s simply not the case. So let’s build a health care plan that conservatives could get behind, but which has features that liberals could possibly accept.
End the employer subsidy of health care.
The government will provide universal catastrophic care, with a deductible indexed to income.
A serious effort will be made to expand the supply of doctors and nurses - not with education subsidies, but by forcing the AMA to accept lower standards for admission, a tiered residency standard, and by encouraging foreign doctors and nurses to emigrate to the United States.
Tort Reform. Defensive medicine is expensive. It’s got to be brought under control. The end of joint and several liability and reforms that require people who bring lawsuits to pay the defendent’s court costs if the judge rules the case to be frivolous would be a good start.
Cass Sunnstein, one of Obama’s advisors, has a very intriguing idea - you can ‘nudge’ people into looking after their own health care by requiring employers to deposit X% of their income in a health savings account. The employee can opt out, but it takes a positive act on their part to do so. Studies have shown that when the default is for money to go into a savings program, the savings rate goes up dramatically. So this is a good way to get people to look after their own health care costs. The amount deposited could be equal to the deductible of the catastrophic coverage at that person’s income level, and the HSAs would be tax deductible.
There you go. Universal catastrophic care with a large deductible is similar to France’s system, and France seems to have one of the best health care systems.
What you have to do is keep the price system working. Under single payer and other universal health care schemes, demand rapidly outstrips supply because there are no price constraints on consumers. In Canada, people take their kids to the doctor when they have the sniffles, and some people are in the emergency ward every time they get a back twinge or a hard bruise (get an X-ray, just in case!). The only thing that limits this now is the fact that you’ll be waiting all night to get a doctor to look at you. If Canada made it easier to get treatment, they’d get even more people flooding the system.
So… Keep prices in the game. Keep bureaucrats and third parties out.
The problem of the third party payer goes down dramatically in this system, because the insurance companies don’t have to worry about covering every little thing, and their maximum exposure is limited by the government catastrophic plan. So essentially people would be buying gap insurance (if they insure at all), and gap insurance is much less risky for the insurer and therefore requires less oversight and paperwork. Pre-existing conditions aren’t a problem, because chronic conditions like diabetes or heart disease would be covered by the government plan.
The government plan can be as big or as small as we want - it’s just a matter of setting the right deductibles for income. That would have to be debated. My position is that the deductible should always be high enough that there is at least some economic pain involved in using the health care system. For poor people, maybe it’s set at $500/yr. For upper middle class, maybe $10,000/yr. For the rich, $200,000 per year. Etc. That doesn’t mean people will have to pay that - they can still buy gap insurance. But gap insurance then becomes much cheaper for poor people - probably trivially cheap. And for those who don’t want to pay the insurance company’s vig, they have tax-deductible health savings accounts, and with Sunnstein’s ‘nudge’, a lot of more of them will have saved for their own health care expenses.
Of the 47 million people who don’t have health insurance in the U.S., 38% of them make over $50,000 per year. These people could easily afford their own gap insurance or to pay their own deductibles if they were suitably enticed to do so.
The beauty of this plan is that it requires very few changes in the actual administration of health care, which means if it doesn’t work, you can try something else. It would decrease the influence of insurance companies, end the real problems of existing conditions and catatrophic loss when serious health issues arise, and make the whole system more efficient.
This is very close to what Milton Friedman recommended, btw.
I don’t believe catastrophic care is mathematically sustainable if one includes the years at the end of everyone’s old-age life as part of the definition of “catastrophic” care, and if a country has negative fertility to create a situation where the elderly population outnumber the young workers.
Virtually everyone that lives long into old age will get cancer, heart disease, kidney disease, or some other very expensive medical ailment. Or do most old people walk around healthy up until the night that they die quietly in their sleep? (Can’t find stats on that.) Since euthanasia of non-productive elderly is not on the table to save on health care costs, what’s the alternative? A very narrow definition of “catastrophic”? For example, a medical emergency only arising out of car accidents? While the calculus for the elderly is being computed, some of the young workers also have their own health problems and they need coverage too. Not all 100% of the worker’s tax payment can be spent on elderly health care.
Plus the word “catastrophic” over time will get diluted to cover minor things such as the “sniffles.” Think that’s silly? Look at the history of how “disability” has been bastardized with the American Disabilities Act. Fat workers are “disabled”. Workers who can’t concentrate on the job are “disabled”. American lawyers have made an art of classifying every human defect as a “disability”. If “catastrophic” is where the health care $$$ are then the public with the help of attorneys will twist their medical issue into a “catastrophe.”
Anyways, I’ve not seen a single article explaining how the real-world mathematics of health care would be calculated for a country with upside down demographics (the elderly outnumbering the workers).
Perhaps one way to make the math work is to put a hard national cap on catastrophic health expenditures – say 14% of GDP. But, it comes across as heartless for a nation to do that and 2, I’m not aware of any country that’s enacted it.
One way you can claw some of that money back is by means-testing social security. Or in other words, eliminating social security. Old people will still pay up to the deductible for their own care, and rich people’s deductibles will cover a hell of a lot of their treatments before the state has to wade in at all.
A direct transfer of cash (much like the EITC) or a health insurance voucher, as I have posited umpteen million times elsewhere on this Board.
So, we give people money, and then they give it to the insurance companies. But the insurance companies are a major part of the problem. Motivated by profit, they seek to limit their payouts. Well, duh! And they commit acts of greed and malice to bring a blush to the cheek of Blackbeard.
Yes yes, the greedy big insurance companies. A few problems though:
If you subsidize something, demand and price will rise. If we increase the subsidy (say by instituting UHC) then demand will rise higher, and we’ll have to impose administrative caps that will be distorted by politics, and lose the market surplus (ie rich cancer patients spending terabux on experimental drugs, giving an impetus to R&D).
We can have equity, or efficiency, but not both. If we make healthcare more equal (by subsidizing the poor) then costs will rise and we’ll get inefficiencies as described above. It is inconsistent of UHC advocates to claim both rising costs and unequal care as a reason for their program, when they must trade off one for another. Fortunately we’ll get a chance to see this firsthand when they craft that legislation: for example, the House bill focused almost exclusively on insuring everyone, but did not do any of that cost control that Obama’s been campaigning on.
This is the question I’d most like to see answered by proponents of private insurance. It seems to me that any time you’ve got insurance-for-profit (especially unregulated), you’re going to see corners being cut in order to show a larger profit. In car insurance, cutting corners can result in such situations as the car being totalled. In health insurance, this can result in someone dying.
Why, IdahoMauleMan, would unregulated insurance cover anyone who won’t make them a profit?
Reputation, mostly. The problem is that we don’t have a free market in insurance, because most consumers have to take whatever insurance their company gets them. Therefore insurers compete to get big corporate contracts by cutting costs (and patients when possible), rather than providing prompt service to customers. Removing the tax subsidy for employer-provided health insurance, as John McCain proposed, would go a long way towards redressing this market failure.
Also read up above on how adverse selection is not the main problem. If insurers can charge according to likely health expenditures, then they have an equal chance of making a profit on a smoker with emphysema as on a healthy 20-year-old. The smoker will have to pay more, as is fair, but he will get covered.
If you want to subsidize the sick, you should do that separately, rather than by requiring insurers to take everyone at the same costs. Doing that WILL make adverse selection a problem, since the sick will get a bargain and the healthy will get shafted, and quit in droves.
(never mind)
Why would basic fraud laws not cover this scenario? You pay me for health insurance, you get sick, I don’t cover it, then why am I not criminally charged?
Because you found a loophole which allowed you to get out of covering me. See Recission, above.
Or I’ve already got an expensive-to-treat disease. Why would you be willing to allow me to buy coverage, knowing that you’re never going to make money off of me? Presumably, you could just charge me an exorbitant premium- but what if I can’t afford that premium?