Six Suggestions for Health Insurance Reform

Health Insurance Reform: Where is the Misinformation?

During summer recess, Congressional leaders are hearing an earful from constituents about health insurance reform. In numerous town hall meetings around the nation, opponents of reform have emerged in large groups battling the proposals. President Obama vociferously argues that those opposed to his reform proposals are “spreading outlandish rumors and misleading information”, and the Administration blames Republican and industry backed groups and conservative talk-show hosts for “staging” the outcry. The White House is even asking that in order to track rumors, individuals should send information on any dissent to a new website: [e-mail].

Just the Facts

Since there is so much concern about misinformation, let’s look at the facts.

Fact #1. Freedom of speech is a given right in the Constitution

Free discourse of opinion and political debate is allowed according to our Constitution. In fact, freedom of speech has been upheld by the Supreme Court in opinions related to previous challenges to the First Amendment. We do not want a society where Big Brother watches us, as happens in communist countries; or where we tattle on our neighbors, as occurred in Nazi Germany.

Fact #2. Medicare/Medicaid government programs have consistently exceeded original cost estimates and have grown faster than private insurance costs

As noted in the Wall Street Journal last week,

Medicare spending in the first nine months of this fiscal year is $314 billion and growing by 10%.

The Congressional Budget Office estimates that the

House bill will increase the deficit by $239 billion over the next decade.

However, beyond the 10 years,

the net costs of new spending will increase at more than 8% per year between 2019 and 2029, while new revenue would only grow at about 5%.

In other words, the cost burden to taxpayers for this program will be huge and will last for a long time to come. Taxing private insurance firms to pay for the government plan won’t work, as the private firms will simply pass along those costs to their customers. Raising taxes on employers will simply shift the costs of healthcare to the public sector.

Fact #3. End of life treatments account for a large portion of Medicare costs.

According to the latest Business Week, a UnitedHealth report prepared for lawmakers finds that

27% of Medicare’s budget is now spent during the last year of older patients’ lives, often on questionable hospital tests and procedures.

Expanded hospice coverage and other services could save significant amounts, perhaps $18 billion over 10 years, according to the article. Purchase of long-term care insurance by individuals could also ease the financial burden for end of life treatment costs.

Fact #4: Any government health insurance plan that tries to compete with the private sector by focusing on affordability will inevitably offer cheaper rates and drive all insurance into a single payer plan.

While the Administration says it simply wants to offer another alternative to the private sector, the reality is that the private sector will be unable to compete with a government run plan that offers insurance at below market rates to make coverage more affordable. Employers will naturally cede insurance coverage to the government plan to cut their own costs.

Fact #5: U.S. insurers have already openly indicated a willingness to consider moving to a ”take-all-comers marketplace”, whereby they will accept all applicants, regardless of age or medical history.

If private insurers follow through on accepting all applicants, the need for a universal health insurance plan is partly obviated. A better solution to a single payer plan is to have consumers assume higher co-pays for everyday medical costs within the private sector, with insurance coverage focused more on those high end expenses that can truly bankrupt families.

Fact #6: Single payer plans adopted by other nations have led to long delays in treatment, rationing of services, and rising costs – good indicators of what can be expected if a government health plan is adopted in the U.S.

Even the State of Massachusetts -- the model that serves as the basis for the Obama plan -- is having problems: a scaling back of initial benefits, rising taxes, and higher costs. France, which has long had a single payer plan, has tried to adopt more American-style methods such as increased co-pays to cut increasing expenses. The state insurer in France has been operating in the red since 1989. The Japanese government fixes the costs for treatment, resulting in low doctor pay, bankrupt hospitals, and demand for supplemental health insurance coverage to fill the gaps in the government plan. In Canada, waiting lists for various treatments are said to cost $14 billion a year nationally in lost economic activity, and there is a chronic shortage of doctors. Despite the universal plan, many Canadians cross the border to seek treatment in the U.S. when faced with long waits and expensive treatments.

Rationale for Rancor

There are many reasons why Congressional leaders are hearing negative feedback from their constituents. The dissent mainly focuses on concern over government control and intrusion into a major economic sector, as well as the cost burden of any healthcare reform program for taxpayers. There is no free lunch. We need to control the costs before we introduce any new, expensive, and inefficient plan. Healthcare is important for everyone. Congressional leaders should look beyond party politics and pass laws that are in the best interests of the nation -- and our legislators should have the same health plan as everyone else to align their interests.

Here are some suggestions:

1.We should work to improve the existing private health insurance sector and encourage supplemental insurance to fill the gaps in such coverage, before we introduce any new government insurance plan.

2. We should encourage higher co-pays for everyday ailments to cut overuse of healthcare facilities, focusing attention instead on catastrophic issues.

3. We should establish a national cap on medical malpractice lawsuits, as has already been done in many states. High malpractice insurance costs lead to higher medical costs and force many good physicians to abandon their practices.

4. We should look into expanded hospice coverage for end of life care.

5. We should provide more information on diet and exercise and do more to incentivize individuals to adopt healthier lifestyles via lower insurance rates.

6. Before we do anything else, we should cut inefficiency in existing government programs.

Disclosure: No positions but I am a licensed AFLAC agent.

Comments

[rkwriter:]

Licensed Aflac agent - that says it all. So much misinformation here it's hard to know which scare tactic to address first. Like over 25 million Americans I am paying over 10% of my income on healthcare costs. My brother, in Massachusetts, pays $104 a month. Families I know up there pay $254 a month for complete coverage. Down here in NC most families I know pay between $650-$1300 a month.

We're paying for insurance anyways, so I'd be more than willing to pay more in taxes because my overall bill would still be much lower. One practice in Washington State stopped taking insurance(they claimed 60% of the cost of a doctor's visit is to pay for paperwork going back and forth between insurance companies and health care providers), started 'insuring' their patients through a monthly fee at their office, ranging from $54 to a top of $159. The only thing the patients pay for are medicines. They also are suggested to buy their own catastrophic insurance(which you can get really cheap). Everything else is covered.

We can run healthcare just like the public schools - doctors get a set reimbursement fee per patient, irregardless of their health profile. That fee will be lower than the average private insurance fee, but will still be more than enough to pay doctors high six figure incomes. A set fee will encourage an emphasis on wellness and the avoidance of unnecessary tests.

As for the scare tactics about European healthcare - every single person I know in Canada, England, France is satisfied with their healthcare. They pay 50% less per year than the average American and by any standard of measurement they receive higher quality healthcare.

Lower cost, better care - only a fool, or a greedy capitalist, would object to that.

Aug 10 08:12 AM

[User 439370:]

I work in healthcare. It seems the rich and special interest get what they want and the rest of us don't. Does anyone know that Senators and Congressmen have their own retirement pot. They get paid "forever." There will never be a "Social Security Shortage for them. So as far as healthcare......Our people ...all people should be adequately insured and Covered. We should not be shuffled to Hospice if we are older and "don't necessary deserve further treatment. Or why did they not pull the plug on President Reagan w Alzheimer's? I imagine his bill was high. But....of course he was one of our special people a president. When will westart taking care of the people who work pay the taxes? Big Business runs our government and our lives...for which they do not care about.

Aug 10 08:38 AM

[user344210:]

"We can run healthcare just like the public schools"

The average student in the graduate schools of education in the US has the lowest standardized test scores and undergraduate GPA of any cohort going on from undergraduate to graduate school. Medical school is just the opposite. Start running health care like the public schools and you will just start attracting lower-quality candidates to medical school.


On Aug 10 08:12 AM rkwriter wrote:

> Licensed Aflac agent - that says it all. So much misinformation
> here it's hard to know which scare tactic to address first. Like
> over 25 million Americans I am paying over 10% of my income on healthcare
> costs. My brother, in Massachusetts, pays $104 a month. Families
> I know up there pay $254 a month for complete coverage. Down here
> in NC most families I know pay between $650-$1300 a month.
>
> We're paying for insurance anyways, so I'd be more than willing to
> pay more in taxes because my overall bill would still be much lower.
> One practice in Washington State stopped taking insurance(they claimed
> 60% of the cost of a doctor's visit is to pay for paperwork going
> back and forth between insurance companies and health care providers),
> started 'insuring' their patients through a monthly fee at their
> office, ranging from $54 to a top of $159. The only thing the patients
> pay for are medicines. They also are suggested to buy their own
> catastrophic insurance(which you can get really cheap). Everything
> else is covered.
>
> We can run healthcare just like the public schools - doctors get
> a set reimbursement fee per patient, irregardless of their health
> profile. That fee will be lower than the average private insurance
> fee, but will still be more than enough to pay doctors high six figure
> incomes. A set fee will encourage an emphasis on wellness and the
> avoidance of unnecessary tests.
>
> As for the scare tactics about European healthcare - every single
> person I know in Canada, England, France is satisfied with their
> healthcare. They pay 50% less per year than the average American
> and by any standard of measurement they receive higher quality healthcare.
>
>
> Lower cost, better care - only a fool, or a greedy capitalist, would
> object to that.

Aug 10 09:16 AM

[DUKESIG:]

Another earful of misinformation, and more importantly, she echoes Repub talking points that the planned, sponsored and carefully orchestrated town hall disruptions are examples of Freedom of Speech, falilng to state that investigative reporters have uncovered that most of the disrupters are from out of state and out of the voting district. Her reference to Nazis is way off base. Again, she echoes the wing nut talking points. Read "The Rise and Fall of the Third Reich" by William L. Schirer to learn the tactics that brought the Nazis to power, then ask yourself which US political party has employed those tactics for the past 8 years and is continuing to do so. Final comment: Where is the Republican counter proposal to Universal Health Care? What does it do? Who does it cover? And what does it cost?

Aug 10 12:02 PM

[NC Investor:]

I agree with you completely and if you run for office you will have my vote.

I would add increased emphasis on tort reform to reduce excessive jury payouts for malpractrice suits and to reduce the expenses for unnecessary treatments and tests performed by doctors and hospitals to avoid law suits. This could provide a signicant cost reduction in health care costs without impacting quality of healthcare.

Aug 10 12:13 PM

[YoYoMama:]

I have to take issue with equating Republicans with Nazis. This Republican is FOR health insurance reform and is NOT a Nazi!

If you have an issue politically with health care reform, take it up with your own party, as Republicans do not have the votes to block Obama care. Its the Blue Dog Democrats who are creating the most difficulty for Obama's plan at this time.

Which is good. This is not an issue we should be steamrolling through Congress.

If Obama had FIRST opened this health care discussion with - let's tackle the waste and fraud associated with Medicare / Medicaid, the American public (and his own party) would have received the second part of his message (let's expand coverage) much more readily. If there are any cost-cutting measures in his proposals, he is not promoting these measure strongly enough to make any reforms palatable to the American public.

But like everything else he's done, he's gone in too hard too quick. He's not explained his reforms in a way that makes dollars and sense to the American public. He is throwing too much at Congress for them to absorb and act on in an informed manner.

In essence, Obama has shot himself on the foot on this one. As a result, nothing will get done. Which, in spite of the author's assumptions, is NOT a good thing for the long term health (financial and otherwise) of our country. Not Obama care, mind you, but continuing to do NOTHING towards reform.

Health care spending is 17% or more of GDP and rising, and that premiums have doubled in the last 10 years, and that medical bankruptcies account for 1/2 of the filings (and over 75% of these HAVE insurance). I guess nothing will get done until insurance companies scale back care to the point that even those on group plans will not take it any more.

Which will be just fine with the insurance companies. Our health is not their first priority.

On Aug 10 12:02 PM DUKESIG wrote:

> Another earful of misinformation, and more importantly, she echoes
> Repub talking points that the planned, sponsored and carefully orchestrated
> town hall disruptions are examples of Freedom of Speech, falilng
> to state that investigative reporters have uncovered that most of
> the disrupters are from out of state and out of the voting district.
> Her reference to Nazis is way off base. Again, she echoes the wing
> nut talking points. Read "The Rise and Fall of the Third Reich"
> by William L. Schirer to learn the tactics that brought the Nazis
> to power, then ask yourself which US political party has employed
> those tactics for the past 8 years and is continuing to do so. Final
> comment: Where is the Republican counter proposal to Universal Health
> Care? What does it do? Who does it cover? And what does it cost?

Aug 10 01:01 PM

[Michael D.:]

Everyone agrees that the insurance companies make decisions on what level of care you get. Everyone agrees that this article is jaded by the author's profession.

So, would you rather have the insurance companies make these decisions, or your government through a state plan? Think about it.

Competition by insurance companies is fierce, resulting in 'normalized' service delivery at the expense of corporate profits. Your service will not get worse if you go to a state system, you'll eliminate the corporate profits from the system and allow your doctors to make their decisions. Everyone gets treated, it is how society works.

Writing from Canada, where I get all of the treatment I need. If I want it faster, in a Spa, or with irish linen sheets, I go pay extra or take out insurance for it.

Aug 10 02:45 PM

[secmaven:]

30% of every health care "insurance" premium dollar is eaten up in commissions, overrides and other compensation to the folks who "sell" this insurance. That is the first thing to cut out in any sensible health care reform legislation. Second...the US must expand support for public health care clinics and emphasize preventative care in these clinics. Third there must be more in home care for the infirm and elderly by compassionate care givers. This would dramatically reduced health care costs. But LO the health care industry lives on high costs It is their cash flow. There can be no reduction in costs for that would mean reduction in jobs.

Aug 10 04:11 PM