Maggie's Farm

By Bruce Kesler

Friday, February 5, 2010

President Barack Obama and congressional Democrats swung their 2008 majority stick, poked the health care hornets nest and are being chased by a popular uprising saying “no to Washington.” Obama now says he is willing to listen to Republican proposals for improving health care. Republicans believe that just passing an ObamaCare-lite will still move us toward government control, toward larger deficits and higher taxes.

Instead, improvements should be separate and incremental to improve health care without financial excesses or intrusion into personal lives. Here are 10 proposals that would work, cumulatively helping the poor and middle class, be affordable, enlarge care without taking away deserved care, and be supported across party lines.

• Allow tax deductions or refundable tax credits for premiums, so more people would be encouraged to obtain insurance. The poor and middle-class uninsured would be on equal terms to those receiving employer-paid benefits.

• Allow individuals to use savings of pretax income, allowed to accumulate, for health care expenses. Include professional long-term care and over-the-counter medications if prescribed by a doctor or dentist. The middle class would benefit. This also allows more people to choose lower-premium, higher-deductible policies.

• Retain Medicare Advantage programs, whose higher benefits and lower co-pays than straight Medicare are more widely used by the poor. But limit those higher benefits and lower co-pays to core medical, dental and vision care.

This allows some reduction in government subsidies. Medicare Advantage plans use networks with negotiated rates and usage monitoring, which reduces their costs.

• Require full portability of individual medical insurance to other carriers at the same or lower actuarial level of benefits, reducing loss of coverage when moving to another area and increasing competitive measuring across carriers that reduces confusion. Rather than motivating people to wait until after they’re sick or injured, driving up the premiums of others, individuals would have more incentive to at least lock in more affordable catastrophic benefits.

• Allow insurers to offer plans nationally, with fewer mandates, to increase choices of benefit levels and premiums. Premiums in each part of the country would reflect local costs, which would increase knowledge of local variations in costs and competitive pressures to reduce higher outliers.

• Allow immigrants, legal or illegal, to enroll in private or government plans but require full payment of premiums. This would reduce uninsurance among those who are able to afford premiums. Legal immigrants could not be naturalized unless providing proof of basic comprehensive medical insurance from the date of entry into the country.

• To apply for government assistance, means-test income and all financial assets of uninsured citizens and legal immigrants. If premiums plus out-of-pocket expenses during the year exceed 10 percent of means, provide a refundable tax credit. For those still uninsured, require providers’ charges to be capped at 20 percent above the same rates as the provider’s highest rates negotiated with their largest private insurer. Currently, “list” prices charged those uninsured may be 30-100 percent higher than negotiated with insurers, with no cap. This would reduce provider charges due to competition, protect the poor and provide incentive to obtain coverage, at least cheaper catastrophic coverage. Those otherwise qualified uninsured would be required to enroll in the appropriate government program.

• Require tort medical cases to be heard by specialized expert courts to reduce the sway of emotions for outsize judgments. Tort attorney commissions on settlements would be higher for pretrial negotiated settlements than for trial judgments, encouraging more reasonable and less costly results for those who deserve recompense.

• State Medicaid or SCHIP programs offering benefits above the federal level of benefits or enrollee income would be ineligible for any federal subsidies. Higher “welfare” states would not be able to pass their largesse on to taxpayers elsewhere and would have to justify them to their own voters.

• Private or government retiree health programs should be required to become fully actuarially funded within five years. If not, private plans would lose tax benefits. Private and governmental plans could reduce benefits, including at the next negotiation of union plans.

The Democrats’ vision of the perfect is the enemy of the good. There is little public support for the Democrats’ overexpansive, excessively costly intrusion into our very lives. There is widespread support for the above reasonable improvements.

Kesler, a resident of Encinitas, is a former corporate finance and business operations executive. For the past 20 years, he has been an independent health care and benefits consultant.