Tuesday, September 08, 2009

One Health Care Proposal

The Cato Institute has a proposal for the rhetorical onslaught from President Obama.

The President accuses his opponents of defending the status quo, or demanding that we do nothing. I have seen the wisdom in giving a detailed set of options to attack the same problems in a less centralized manner.

Below are the 7 proposals from the Cato Institute with my thoughts interspersed.

1. Let individuals control their health care dollars, and free them to choose from a wide variety of health plans and providers.

The more freedom individuals have, the better they can responsibly control their health care costs and fight for better care.

2. Move away from a health care system dominated by employer-provided health insurance. Health insurance should be personal and portable, controlled by individuals themselves rather than government or an employer. Employment-based insurance hides much of the true cost of health care to consumers, thereby encouraging over-consumption. It also limits consumer choice, since employers get final say over what type of insurance a worker will receive. It means people who don’t receive insurance through work are put at a significant and costly disadvantage. And, of course, it means that if you lose your job, you are likely to end up uninsured as well.

Absolutely right on the money. The biggest complaints echoed from the people are that they don't want to lose their insurance if they lose their jobs. Losing insurance at any point is problematic for people, but especially those that have degenerative conditions because the insurance companies have pre-existing condition exclusions.

3. Changing from employer to individual insurance requires changing the tax treatment of health insurance. The current system excludes the value of employer-provided insurance from a worker’s taxable income. However, a worker purchasing health insurance on their own must do so with after-tax dollars. This provides a significant tilt towards employer-provided insurance, which should be reversed. Workers should receive a standard deduction, a tax credit, or, better still, large Health Savings Accounts (HSAs) for the purchase of health insurance, regardless of whether they receive it through their job or purchase it on their own.

I just want to emphasize that the Federal Government through the IRS has greatly influenced the very problems that we face today. Don't expect them to see the problems that they've created and turn towards proper solutions. The Government always trends towards more centralized power, and that inherently invites corruption. When the Government picks winners and losers, most people are losers.

4. We need to increase competition among both insurers and health providers. People should be allowed to purchase health insurance across state lines. One study estimated that that adjustment alone could cover 17 million uninsured Americans without costing taxpayers a dime.

Some conservatives that I respect are concerned about this portion of the plan. They do not want to give any opportunity to the Federal Government to take over regulation of things that are currently handled by the States. As long as this step is executed with explicit prohibitions on the Federal Government to define what insurance is, and does not give them any influence over the content of the insurance, I can support this.

5. We also need to rethink medical licensing laws to encourage greater competition among providers. Nurse practitioners, physician assistants, midwives, and other non-physician practitioners should have far greater ability to treat patients. Doctors and other health professionals should be able to take their licenses from state to state. We should also be encouraging innovations in delivery such as medical clinics in retail outlets.

State to State licensing should be handled in a cooperative manner, not by the Federal Government. Once again, it is proper to distrust the Feds. I think that on a state by state basis we should relax the licensing and allow competition to prosper in our state. This is something that should be done by the State legislature. Allow more people to treat less risky ailments. Just give more freedom to people to participate in medicine that they desire, such as midwives, herbal treatments, etc.

6. Congress should give Medicare enrollees a voucher, let them choose any health plan on the market, and let them keep the savings if they choose an economical plan. Medicare could even give larger vouchers to the poor and sick to ensure they could afford coverage.

Yes, any plan to offer a transition away from Government control.

7. The expansion of “health status insurance” would protect many of those with preexisting conditions. States may also wish to experiment with high risk pools to ensure coverage for those with high cost medical conditions.

I'm not familiar with health status insurance. Generally speaking, most problems would be solved if you provided a structure to keep people insured in a fair manner. Maybe each state should create a transfer method. If you were insured with certain types of coverage, but want to change companies, the state might require that insurance companies use the application information from when you were first insured to prevent pre-existing condition problems. I'm not very sure about that.

One thing that may work is that if you are diagnosed with an illness such as diabetes, the insurance company could basically be required to designate a payout amount that they now owe you, that could be transfered to other companies if they choose to handle the coverage. It makes a little sense since one of the major reasons to have insurance is to protect against catastrophic events in your health. The removal of your employer from the equation would be another major benefit to this situation. Each individual could negotiate their own insurance contract instead of the take it or leave it options with most employer driven insurance. People would be self interested in scouring the contracts, or hiring lawyers to do it for them. Better contracts would attract more customers, and would bring profits to more types of insurance companies.

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