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Friday, November 8. 2013
It's become clear to me that people are divided into two basic camps on medical insurance: those who want to insure cheaply against major expense and those who want what amounts to pre-paid medical care. In any event, it is stunning to me that 85% of Americans were content with their medical care situation pre-Obamacare so I'm not sure that represented any crisis requiring massive Federal intervention and control.
As someone whose bias is against government getting involved further in our lives, if I were King here's what I would do about medical insurance - free it up:
1. I'd permit medical insurors to create national markets for insurance, like MLS does with real estate. They would be happy to do so were they free to do that.
2. I'd make medical insurance portable across state lines, and detach it from employment. If any employer wants to chip in, or if a union contract requires a business to chip in, fine. They could offer vouchers as a benefit, if they want to.
3. I'd demand that insurors insure everybody who wants to buy some, creating high-risk pools just as they do for auto insurance if needed.
4. I would permit the freedom to sell any kind or style of medical insurance people might want with whatever sort of coverage they want to buy. Or not to buy, if they want. It's a free country, and people are free to be foolish or to trust in the benevolence of others.
5. Regarding Medicare and Medicaid, I would fold them together somehow as means-tested charities for the poor, run by states or municipalities.
(As an off-topic aside, let me tell you the problems with many government-paid Medicaid patients and charity patients: they miss appointments, they are not appreciative and treat you like a servant, they will not make morning appointments, they resist advice, their fees do not pay the rent so docs have to limit their numbers - and they are prone to lawsuits against you. I know about this, because I do around 10-15% charity work in my office as my form of tithing, volunteer one day/week in a charity clinic, and teach for free 1/2 day/week. Just another greedy doc. )
Addendum: A reader asks about tort reform. Good question. God knows how much of medical expenses are CYA by docs and hospitals. The reality is that medical care is an art, and that any medical decision can be challenged or questioned if somebody wants to sue their doc.
What would you do if you ran the world?
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I would simply would change the tax law such that employer contributions to someone's medical insurance are a taxable benefit to the recipient just as cash compensation is.
A (perhaps THE) significant factor in inflated costs is that patients perceive (and in some cases, e.g. Medicare and Medicaid, actually are) that their insurance, and hence their medical care, is being paid for by someone else. Therefore, when their choices are "more money in their pocket" versus "more medical care (even if the benefits are minimal)", they have little or no incentive to choose the former as they don't recognize it as money in THEIR own pockets.
Oh yeah, if I ran the world, I would also ensure that the DSM is recognized for what it has become - an attempt by some in the mental health industry to force payments from insurance companies for life's ups and downs, life-style CHOICES (if you're fat because you lack self-control and eat a box of Krispy Kremes TID, I shouldn't be rehired to contribute to your coaching sessions), and minor foibles that are well within what would be expected in a bell curve distribution.
These have been pretty much my ideas of insurance reform as well.
I think the two keys are making insurance national and decoupling from employment, particularly the tax differences.
Nice summary! Way too simple for the smart people in government to consider. They thrive on complexity not actual solutions.
I would allow anyone who wanted one to have a deductible, health savings account. As it stands now, one must have a qualifying health insurance policy in order to have a savings account. As someone with preexisting conditions, I could not get insurance when I was not traditionally employed, and to keep me from funding my own health savings account was absurd.
I'm now over 65 and on Medicare, and I am still not allowed to make deposits into a health savings account. That's ridiculous.
Sorry, but I needed to add the following......
The elephant in the room in regards to medical insurance is that "we" - as a nation - cannot afford to pay for everything for everybody. All health care policy analysts and politicians know this, but it's neither politically correct nor career enhancing for a politician to address either what this means or how it must be dealt with.
The elderly, particularly in their final year (or months), consume an overwhelming proportion of the medical care delivered in the US in dollar terms. Yet, they underpay for this.
Unlike private insurance policy premiums, Medicare premiums don't cover the costs of the care received by Medicare beneficiaries. The balance is paid for by (a) current taxes paid by current taxpayers, and (b) cost shifting, i.e. higher insurance premiums paid by, well, current taxpayers. With longer life spans and changing demographics (the aging of the boomers), the current situation is unsustainable.
The politicians and policy experts recognize that paying for medical care for the elderly involves making the working age pay the tab. They also recognize that there are limits to which this will be tolerated.
There are essentially two options to reduce the amount of money spent on this expensive end of life care for the elderly - or, put bluntly, to reduce the amount of medical care received by the elderly:
(a) Change Medicare as we know it to a means tested system that essentially provides charity medical insurance to the elderly poor - the working class will still pay for the poor elderly's medical care, but by eliminating the non-poor elderly, the tab will be "manageable". The non-poor elderly would purchase medical insurance in the private market - this would necessarily mean much higher premiums. The sheer number of non-poor seniors who would thus be "deprived" of their entitlement makes this a political non-starter. The notion that we would only be allowing people to live if they are rich enough to afford it would be appalling to the left - even though we only "allow" the rich other benefits and luxuries.
(b) Rather than limit people's choice to extend their lives based on their ability and willingness to pay for this expensive care, we can simply limit that choice based on their age - that's Zeke Emanual's concept that is incorporated into ObamaCare - and deny coverage (and eventually the service itself) for certain high cost treatments for anyone above a certain age. The government term is that such care is not "cost effective." The leftists see this a fair because the government rather than the free market gets to make the voice of who lives and who dies and this is supposedly more palatable to their supporters - "we're not going to let you die because you are poor, but because you are old."
When Sarah Palin spoke about the death panels under Obamacare, she was exactly right. The left wing media tried to brand her a fool and discredit her, but the death panels or independent payment advisory board are an ESSENTIAL feature of Obamacare that gives us option b. It is important to recognize that it won't just be the elderly with some terminal illness who are affected. The concept is that if the care costs more than what the government determines your productivity to society to be, it is nor cost effective and thus it is not unreasonable to deny payment across the board for such treatments. This could include children with certain diseases for which the treatment is expensive and a return to a "productive" life is unlikely.
Limiting the cost of health care to the nation (through both public and private expenditures) and extending health care to more people are two different goals that should not be conflated. The second is the legitimate concern of government, the first is not. Unfortunately, certain people think the government ought to be in the business of dictating the cost of health care and that leads them to suggest changes--like Obamacare--that trammel the rights of a great many Americans. Obamacare will be as "successful" in expanding the coverage of health care to more Americans as NYC's insane rent control policies have been in expanding the stock of housing that's available to New Yorkers.
Extending health care to more people is NOT a concern of the government, but ObamaCare does not do that. ObamaCare attempts to extend heath care INSURANCE to more people. Health care insurance is different that health care. Why should government decide that people must have health care or health care insurance or any other good or service that is produced by someone else. When government insists that Jones MUST have something that is produced by Smith, it sets the stage for robbing prom Peter to pay Paul.
Means testing always sounds good, but some of us would be in a Catch-22.
Military retirement is considered a deferred compensation. The gov't said I was underpaid then since I would collect retirement now.
Similarly, our "free healthcare for life" for retirees and their families I was told was deferred compensation. Stay in at lower wages and you'll be taken care of later -- when you retire -- until you die.
A few years ago, as a "cost saving" measure, healthcare for retirees was moved to CHAMPUS (later TRICARE). TRICARE Prime you have to pay for (not a heck of a lot, but it's not "free"). (An Army Nurse I knew called TRICARE "the HMO that goes to war.")
Once you turn 65, you're moved to "TRICARE For Life" which, although without fee, is a secondary-payer and you're moved to MEDICARE as your primary payer. You also cannot normally use a military healthcare facility as your primary healthcare provider -- you can be kicked out and refused service. Since we've been paying Social Security and MEDICARE payments all our time in the military, using our deferred compensation as a factor in the means testing would tax us twice.
#1 is certainly within the scope of the Federal government Commerce Clause powers, and should have been a head-slapping slam dunk change made years ago.
#2. Fine, make it "portable" and "detach it from employment" but then you're saying the employee, not his employer, should be paying out of pocket to buy the insurance coverage. While some people do buy their own insurance, out of preference or out of need, that's not what the vast majority of people want: they want someone else to pay for their insurance and medical care. This is a nonstarter.
#3. Demanding that insurers insure everyone differs little from the government demanding that YOU treat any and all patients on Medicare and Medicaid as a condition of licensure, something you object to. What's good for the goose is good for the gander. Fail.
#4. A no brainer. Of course.
#5. Medicaid is, in effect, already means tested, is it not? As for Medicare, I suggest raising the age for coverage to 72, just as for Social Security.
None of the changes you propose would do much to extend AFFORDABLE medical care to the poor who are the most likely to lack it because they aren't employed and thus covered by their employer, or don't have enough money to pay for it themselves, and end up having their health care paid by taxpayers. These days, the best way to get people covered is to ensure the economy is healthy and that people have JOBS. Yet that's the one task at which Obama has failed most miserably. Obamanomics is literally killing people because it is a drag on economic recovery. Get people working and the number of uninsured will drop by 5 million, at least.
"(As an off-topic aside, let me tell you the problems with many government-paid Medicaid patients and charity patients: they miss appointments, they are not appreciative and treat you like a servant, they will not make morning appointments, they resist advice, they do not pay the rent so docs have to limit their numbers - and they are prone to lawsuits against you. I know about this, because I do around 10-15% charity work in my office as my form of tithing, volunteer one day/week in a charity clinic, and teach for free 1/2 day/week. Just another greedy doc. )"
Exactly what my sister, a doctor at a clinic, says.
All good suggestions. I would like to make two brief comments.
One, Medicaid means testing is convoluted. Apparently, one can live in a home worth half a million dollars but not have more than $2000. in a bank account. This leads to asset hiding, and allows the family to not have to make difficult decisions or- take responsibility. Once qualified for Medicaid, a wide array of social services are open to you-all free, of course!
Secondly, what we expect from healthcare and hospitals has changed. I remember when there still wards. These days, most hospital rooms are like mini-suites. Sure, it's nice, but I would prefer something less costly.
I speak as a caregiver for my elderly parent and as a patient with a long term congenital health issue.
Amen, how do we go about making our fellow citizens that nothing is free and we are each responsible for ourselves "in sickness and in health?" The whole thing is an ethical failing of the population in general.
I would make it so that only catastrophic coverage is sold. I think we should go back to the days when you were paying out of pocket for routine doctor's visits and tests. Why not create a system where regular docs no longer take insurance and have you pay-by-the-visit or pay a fee for year-round treatment for 'free' to be determined by the doctor what that treatment will include.
I think really what people need medical insurance for are the emergency scenarios, not day-to-day health stuff. So MRIs and Xrays would be covered under this type of coverage. As would surgeries and hospital stays.
Also, no treatment if you don't show insurance or have a way to pay for it. Catastrophic coverage would be very cheap for the young and healthy. If you're too stupid to carry it, why should the hospital have to pay for it???
Thus the system of charity hospitals could fill the hole as they used to!
Exactly Miss T! I grew up in a family that was very health conscious, and my dad always used to say, "That's sickness insurance not health insurance; the only health insurance is to treat your body well, eat sensibly, exercise..."
Just take the $1.4 trillion a year in Medicaid/Medicare and cut a check for about $4200 for each citizen and make theme responsible for securing a plan to promote, protect and insure their health with medical treatment insurance (it's NOT health insurance). Everybody gets the basic resources and employers and government are out of the equation, leaving it to patients and doctors, with only the middle men that any insurance plan requires. If you want to top off your plan, fine. Why should only the poor and old get taxpayer support, when it is something that everybody needs. Now this is universal healthcare, just not government run or single-payer.
"Why should only the poor and old get taxpayer support, when it is something that everybody needs"
Good point, Peter, thanks for the reminder. This is the same argument Obamacare supporters have used to justify the federal government's involvement in medical care, namely, EVERYONE---even young healthy people---will eventually need medical care and will make use of the nation's health care system, therefore it is proper for the federal government to be deeply involved. The way I see it, if this argument is good enough to justify passage of the Obamacare law, it's good enough to argue that government medical care benefits should should not be means tested but should be available to everyone on equal terms regardless of a person's financial ability to pay.
Every one of your 'fixes' are fixes I'd agree with. To that end, I think the one thing in Obamacare that makes sense is the exchanges - if they were available nationwide, rather than as state-run enterprises.
In my business, we use exchanges and they work brilliantly. Which is why the failure of Obama's networks is so funny - ours were developed to accomplish a business end, and were built very quickly and easily. The poor quality of his is laughable, and the excuses given insane for anyone to believe. But the concept is sound and acceptable (not the subsidies, though).
I'd agree with the other person who added that HSAs would be good to have, too. I belief self-insuring would be a popular thing if people could do it. Makes perfect sense to anyone with an ounce of it.
Finally, tort reform IS essential. My father (a doctor) was sued twice for providing a second opinion, and was added in the Dupont silicone implant suit by a patient whose implants were fine - she was told if she didn't join the class action, she'd never get the chance to get 'anything', so she joined. My dad found out and called her, but couldn't convince her to drop out. The legal ramifications of malpractice law created a situation where his malpractice fees were 25% of his total costs.
As he said to me - what percent of malpractice suits are found in favor of the plaintiff? Over 85%. What percent ever make it to trial? Less than 2%. The fact insurance companies settle is the biggest problem - if paying money is cheaper than going to court to solve the problem, and paying that money is a problem for the system to 'solve' - you're involved in a bad system. It needs a radical makeover and the first thing to go should be the fact that you can sue on contigency. If you're not paying your lawyer, the lawyer has the incentive to get the settlement rather than find out if malpractice took place. There needs to be 'skin in the game'.
In reality, forcing this situation would create a whole new business - call it "malpractice hedging". I could front a person the money to pay the lawyer, but if and only if they can give adequate evidence that a malpractice situation is at hand - and then if they can, I'd agree to split the money with them if they win.
This would root out the fraudulent cases, which represent a HUGE portion.
I only disagree with a few statements made here:
1. Conflating Medicare and Medicaid is a mistake. One (Medicare) is a insurance system where the beneficiaries paid into it and the other (Medicaid) is welfare.
2. Means testing. OK, lets means test Medicare, but if you find that I don't qualify then I insist that the contract be upheld and the government pay me back the premiums plus interest for what they promised.
3. Death panels. This might just work. At what age? I'm 70, should we make it 72? What then? What if I live past 72 and I'm still collecting my Medicare? Do you just expect me to just fade away. Perhaps some will do that, I will not. I would be really pissed and make sure everyone knew it. Perhaps only 1%-5% of the population would feel the same way when they got old but that 1-5% could do a lot of damage. Politicians would have to travel with body guards. Hell! Everyone would need body guards. Have you really thought this through? I think Obama and the Democrats have thought this through and that is why they want gun control.
4. Would we still provide health care to non-citizens and illegal aliens? How would you justify this while at the same time denying care to your grandmother?
Today's Medicare population may have paid something into the system, but far less that what is required to cover the cost of their premiums. Consider an 85 year old Medicare patient. Because Medicare didn't even begin until the mid 60's, they could not have even started contributing to the system unit their mid thirties. Furhermore, because they were paying (for the then current beneficiaries) based on costs from that time period rather than today's costs, they paid in a trivial amount.
Your post is a prime example of my point that seniors make it impossible to fix the entitlement problem that is unsustainable and killing America. Seniors are under the misconception that they have paid in an amount that justifies the benefits they now demand. This is not the case. These entitlement programs were enacted by the leftists to buy votes and expand government. The concern was not whether they were legitimate functions of government nor whether they would be sustainable when those politicians' careers was long past.
When seniors bitch that they want their premiums back if they can't have their entitlement benefits because of means testing, etc. what they are saying in effect is, "We don't want to pay the price for the liberals mistake, we want our grandchildren to pay that price." Newsflash - your generation elected the idiots who enacted these programs and your generation has allowed the government to continue and expand these programs for decades. Medicare was enacted just as you turned 21 and were able to vote. You're far more responsible for this mess than your grandkids!
Yes it is true that the Medicare premiums don't cover the cost of Medicare. But what are the premiums for Medicaid? Or any of the "means tested" programs? Zero, Zip, Nada! SO by your logic the welfare should continue and the paid health care recipients should suffer? Huh! The correct and logical solution to Medicare's woe's is: 1. To increase the Medicare portion of the payroll tax, or 2. To acknowledge that Medicare requires a subsidy from the federal government and increase that accordingly, or 3. To crack down on fraud, waste and abuse (which is huge) to make the system more affordable, or 4. Better yet some combination of al of the above.
You seem to be in favor of scraping the system. I am going to surprise you by agreeing. I too am in favor of scrapping it. BUT, every other subsidy must go first. 100% of welfare gone. No farm program. Eliminate all federal loans, grants, foreign aid and give aways. End unions in federal employment and make the pay appropriate and competitive for the job. Until and unless we can do that we have no business unilaterally changing the contract the federal government has with the ONLY program that requires the beneficiaries to pay into. So do it! End Medicare and SS too if that is your plan but only after the giveaway handout programs are ended. If I didn't have to pay exorbitant taxes all my life to support this wasteful use of my tax money I would have been in a much better position today to fully pay for my health care.
And it is important to understand I want to end the approximately $2 trillion a year of federal spending (not spent on Medicare) so that you and my grandchildren won't be burdened. In my humble opinion the only things the federal government should be spending tax money on is the military the federal courts and a modest wage to lawmakers and the president. All the rest is waste and pork.
You've missed the point I think we agree on virtually everything. It's just the issue of who pays for what has already been promised and in some cases delivered. I don't like it either and I recognize that because many who have already received the benefits that you, I and many other have paid for are either dead or dying or destitute, it's unlikely that we can force them to pay for the benefits they consumed. Thus, we're left with the question of who gets screwed.
Like you, I would also scrap all of the entitlement programs - Medicare, Medicaid and Social Security, along with food stamps, earned income tax credit, etc. In fact, I would abolish the income tax - what you tax, you get less of - and replace it with something like excise and property taxes.
My point was that most politicians recognize that these programs are not sustainable. However, as your comments regarding "I've paid into the system and therefore I want my money back either as a refund or as benefits" indicate, current beneficiaries don't want to be the ones who pay the price for poorly conceived entitlement programs that they helped enact. What is clear however is that eventually someone gets royally screwed. Is it fair that those of us who have carried the weight - that is those of us who have really paid the taxes - have to pay again? Nope! But it's foolish to imagine that there will be no eventual loser in this Ponzi scheme. The longer it goes on, the greater is the amount of wealth transfer and the greater is the amount of damage to the eventual patsies.
I think Paul Ryan's suggestions were a genuine effort to recognize the problem and to spread the pain over more people. Naturally, the leftists, who use these entitlement programs to buy votes, seized the opportunity to use the for political gain rather than trying to solve the problem.
I agree that in dollar terms the fraud issue is huge, but as a percentage of the budget it's trivial compared to the programs themselves. The solution is not to fix the problems with the entitlement programs - as long as we have government doling out money, there will be bad people taking advantage of it - the solution is to eliminate the entitlement program.
If we look at the federal budget from a broad perspective, we see that the entitlement programs (Medicare, Medicaid and Social Security) and military spending encompass the lion's share of the costs. The ONLY one that is a legitimate government function is the military. Eliminating the entitlement programs and approaching war as war (inflicting the maximum amount of damage on the enemy in the minimum amount of time in order to effect a rapid surrender rather than engaging in these prolonged forays in foreign lands) would solve our budget crisis and allow for a reduction in tax rates.
PS - In regards to your comment that the government owes you something for your SS/Medicare contributions because of the "contract", the SCOTUS ruled in 1960 (Flemming v Nestor) that entitlement to Social Security was not a contractual right.
PPS - I don't necessarily agree with the idea of means testing either. It is repulsive to me as I recognize it as simply one more form of wealth redistribution (socialism) from those who produced and saved to those who didn't. I mention it because of the issues I raised regarding (1) politicians worrying about the senior voting block, and (2) the reluctance of people, like you, to not get the benefits they "think" they paid for.
I do understand that the government can and will do whatever it wants to and if that means having the Supreme court declare a contract is not a contract if the government doesn't want it to be then they will do it. But many people talk about reducing or eliminating SS or Medicare and I simply want to point out that these are the only two "entitlement" programs were the beneficiaries have paid into it. That being the case I say it is still OK with me to cut or eliminate these programs but ONLY after total elimination of all welfare subsidies and the long list of pork spending. If the federal government thinks they can throw grandpa under the bus while at the same time continuing to give our money away they are mistaken. AND it's important to understand that is exactly what they want to do. They want to screw over the old folks and continue to buy the low information voters with welfare. They want to steal the revenue from SS and Medicare. This is going to piss off some people.
I write from way up north in Canada.
I would create immediate single payer government health care on condition that anyone who used it be immediately sterilized, along with all of their progeny.
What, you don't believe in evolution? You think subsidizing genetic losers is a good idea? Why?
Ditto the comments about the medicaid patients. I have experienced the same in my specialty practice as well. I would add tort reform with a limit on the amount lawyers can get from awards and settlements to 20% or less as at the moment the lawyer tends to get the lion's share of the money and the plaintiff less. Loser pays all court costs. Separate tort courts might be in order. What most people don't realize is that unlike companies with bad debt docs have no recourse tax wise with bad debt. If we were allowed personal or professional tax credit for the bad debt/charity care that we do I think we might have less of an issue for elective care. This actually was suggested sometime ago pre-ACA and failed in votes. For life threatening care no one can be turned away due to money or lack there if they are at a hospital.
I got this "Happy Birthday" message today from Medicare:
Happy Birthday from Medicare! We wish you well in the upcoming year and want to remind you of the preventive services Medicare offers to help you stay healthy.
Our records show that you have not taken advantage of some of the preventive services which are available to you now or in the future and listed in the table below. Please talk with your doctor to decide which ones are right for you.
Name Eligibility Date
ANNUAL WELLNESS VISIT 05/01/2012
OBESITY COUNSELING 11/29/2011
CARDIOVASCULAR DISEASE (BEHAVIORAL THERAPY) 11/08/2011
HIGH INTENSITY BEHAVIORAL COUNSELING 11/08/2011
DEPRESSION SCREENING 10/14/2011
ALCOHOL MISUSE SCREENING 10/14/2011
PAP TEST DR 11/01/2009
PAP TEST 11/01/2009
ABDOMINAL AORTIC ANEURYSM 11/01/2009
To see more details of the services you are eligible for, visit www.MyMedicare.gov and select "Preventive Services" under the "My Health" tab. Or, talk to your doctor for more information.
So if you go to a gp who doesn't take Medicare patients your health records don't record it? And wouldn't you be saving the government money in that case? Note that paps are no longer recommended for women over 65 - Medicare recipients, in other words.
My neighbor has started getting helpful phone calls on the same subject. Wouldn't you like us to send someone out to check over your home, see if there are any issues or concerns? She always thanks them while politely turning them down. I'd be tempted to say, "Sure, if you show up with a gun and a warrant." Which would just be noted in my medical file, I'm sure. I guess a better answer is, "Let's schedule it for later. We're about to leave on an extended vacation."