Getting Ready for the Health Care Summit
What’s the purpose of the health summit — bringing the president and Republican and Democratic Congressional leaders together? The Republicans hoped it meant we would start over. Toss out the highly defective legislation that has been working its way through the House and Senate and begin anew with a clean slate.
The White House is rejecting that idea. Apparently, all they want is to ascertain the minimum changes they have to accept in order to get a bill passed.
Okay. Here are ten of the changes (in the ‘60’s we would have called them “non-negotiable demands”) needed to make ObamaCare acceptable. They are listed below the fold.
Someday, We’ll be Together
- Establish Equality Under the Law. That means everyone should be treated equally. Specifically:
Treat every Medicare enrollee the same. There should be no special subsidy for Medicare Advantage members in Florida, while millions of seniors are losing their coverage in other states.
Treat every Medicaid enrollee the same. There should be no federal bailout of Nebraska’s Medicaid expansion, while other states are forced to pay their own way.
Treat every taxpayer the same. There should be no tax on some workers, while exempting others because they happen to be longshoremen or members of other unions.
- Drop Individual and Employer Mandates. Remember Barack Obama’s admonition to Hillary Clinton: We should not require people to buy something they cannot afford and then fine them when they don’t buy it. Further, we should not have one set of rules for carpenters, plumbers and bricklayers, while a more generous set of rules applies to employees of every other small business. Accordingly, we should:
Replace the mandates with a fair and efficient system of economic incentives. We should provide generous financial support through the federal tax system to make health insurance affordable for every American.
Give all insurance the same subsidy — regardless of where it is purchased. We should treat all insurance the same — whether it is provided through an employer, purchased in the marketplace or acquired in a health insurance exchange.
Give every individual the same subsidy — regardless of how insurance is obtained. We should treat all individuals at the same income level the same — regardless of where they obtain their insurance. (See details in my commentary, “Level the Playing Field for U.S. Health Insurance.”)
- Encourage Comprehensive Coverage for Seniors. We should encourage rather than discourage Medicare Advantage plans, which give seniors access to the type of broad comprehensive coverage most nonseniors have. We should encourage, rather than tax, employers’ supplemental Medicare benefits.
- Allow Health Insurance to be Sold Across State Lines. We should encourage a national market for health insurance, allowing the citizens of each state access to the types of products routinely sold in the other 49 states. (See details in the NCPA Brief Analysis, “How to Create a Competitive Insurance Market.”)
- Encourage Personal and Portable Insurance. We should end the current practice of barring employers from purchasing the type of insurance employees most want and need: insurance they own and can take with them as they go from job to job and in and out of the labor market. (See details in the NCPA Brief Analysis, “Personal and Portable Health Insurance.”)
- Allow Private Insurance Alternatives to Medicaid and S-CHIP. Instead of trapping more children and more families in public health plans that all too often ration care by waiting, we should make those dollars available to subsidize private coverage which gives patients access to the full range of medical providers and facilities. (See details in the NCPA Policy Report, “Opportunities for State Medicaid Reform.”)
- Allow Special Health Savings Accounts for the Chronically Ill. One of the most successful Medicaid pilot programs is Cash and Counseling, under which the homebound and disabled manage their own budget and are free to hire and fire those who provide them with services. We should use this experience as a model to liberate the chronically ill and empower them in a newly-competitive medical marketplace. (See details in a previous Health Alert on chronic illness and Health Savings Accounts.)
- Allow Health Insurance Plans to Specialize in Solving the Problems of the Chronically Ill. Instead of requiring health plans to treat all enrollees as though they were the same, we should encourage special needs plans that specialize in treating the health problems of the chronically ill. (See details in a previous Health Alert on chronic illness and Health Savings Accounts.)
- Allow Employers and Their Employees to Prefund Post-Retirement Health Care. Although one-third of baby boomer workers have an employer promise of post-retirement health care, almost none of these promises have been funded. We should allow employers to help their retirees obtain personally-owned, portable insurance for their retirees and to build up funds in order to keep their promises. (See details in a previous Health Alert, “What to Do About Early Retirees.”)
- Enact Sensible Malpractice Reform. Encourage a health care system in which victims of unexpected adverse events are promptly compensated by episode-specific insurance and in which providers and facilities have economic incentives to reduce medical errors — without the need of lawyers, judges, jurors and courthouses. (See details in the chapter, “Five Steps to Liability by Contract,” from the NCPA’s Handbook on State Health Care Reform.)
Hear, hear!
John: Great ideas.
Agree these are great ideas. But will the Repbulicans stand behind them when they get to the summit?
Clear and straightforward. Of course, one must bear in mind the following civics lesson from the recently departed Charlie Wilson:
Joanne Herring: Why is Congress saying one thing and doing nothing?
Charlie Wilson: Well, tradition mostly.
Excellent ideas!
I’m surprised to see nothing about community rating or guaranteed issue in the above list. Have you caved?
This is certainly much clearer than anything I have heard from the Republicans. Kudos.
1. yes, wonderful
2. treating all insurance and all individuals the same, yes, wonderful; replacing mandate without leaving underwriting restrictions in place? you will not get anything approaching “affordable” for the “uninsurable,” and you still haven’t gotten around to defining what “affordable” means.
3. yes, fine
4. of course, but this won’t do too much for the individual market, and group is already essentially multi-state – also, you never consider the insurance company sector response to your various reforms, neither here or anywhere else in your list
5. I read the referenced paper, and despite what Blue Cross of Texas might have worked out (and the best and brightest in the insurance business do not work for the BUCAHs), this is not something that can happen easily, though moving to an “all individual” choice market is certainly one of the possible solutions to the challenges for financing medical expenses through insurance vehicles, with or without a mandate, as long as some kind of transition exists for the currently uninsurable, and the future ones.
6. Certainly. One of the stupidest rules is the one that creates a “cliff edge” for qualification for Medicaid – all or nothing. What is wrong with a “graded” subsidy so that people can “afford” the employer offered option, etc.? Need does not follow an all or nothing recipe.
7. You keep at this. Whenever somebody else’s money is being used, of course it is a wonderful thing. If chronics had to use their own money, it is like a substitution for the sky-high premium they would have to pay an insurer assuming they could get insurance in the first place. Or are you suggesting that this is done AFTER someone who is already insured first becomes chronic? Then, it is a variation on how the insurer who is responsible for the cost wants to most effectively spend their money, and it is certainly a viable option. It is no different than innovating different provider payment packages, condition based capitation, reverse auctions, etc.
8. See 7 above, plus there still is no indication that anyone would choose to capitalize such an insurance product.
9. sure
10. agreed – some level of “no fault” or workers comp scheduled style insurance to compensate and keep admin costs to a minimum, probably with a drop dead time to opt out into litigation.
None of the above address the core problem with the current system – that the government is allowed to cause tremendous distortion to the marketplace because of their illegitimate price fixing on half of the medical care spend. Fix the pricing through valid economic transaction mechanics between the patient and provider, and then mess around with the rest.
JOhn,
How can we get Cost Shifting as a primary topic of the health care reform Congressional Meeting on Feb 25th?
Government paid healthcare will soon be 50% of the total $2.5 trillion healthcare bill in America. Congress is only focusing on the private sector, which means they have to reduce private healthcare cost by $2 to reduce overall costs by $1. And one of the largest, if not the largest problem in the costs of the private sector is the government cost shifting.
I doubt you can reduce costs in the private market enough to offset the public market increases due to seniors living longer and using ever more resources as though there is an unlimited source of funds.
I think we’ll all agree that the Dem’s won’t talk about it – can we get the Republicans to bring it up?
I hope we can get the Republicans to start by asking for tort reform and an end to cost shifting. If the Dem’s won’t open up those areas, you might as well walk away – the system is doomed.
11. Require medicare claims data to be transparent and utilized to develop process and outcome measures in the public domain — no black boxes
12. Comparative Effectiveness Research must be enabled to validate the marketing claims of the various providers.
13. Quality measurements efforts must be redoubled so that both process and outcome measures are publicly available that measure hospitals, physicians and the combinations of the two.
ilovebenefits.wordpress.com
John, great job. As usual.
I second Larry’s question. where are the Republicans?
John,
Who is the genius who thought of putting wonderful music on your “Health Alerts”?!?!?!?!?
That’s a reason to open it up each morning. (And I don’t normally even listen to music.)
With huge amounts of known healthcare fraud [mainly in Medicare and Medicaid, and which was #9 on your previous list] doing all your current #1 through 10, will amount to drilling a hole in our boat’s hull to let out all the water which is currently sinking it.
But attacking known fraud reduces campaign contributions, so whatever happens I guess we just have to allow all government health programs to go bankrupt and then start anew!
Great ideas promoting equality and common sense. I would hope that the summit would give equal time to Reps and Dems to present their ideas to the tuned in Americans and press. Each should present their ideas separately at this meeting and encourage future discussions to proceed to a next stage.
If the Reps take this approach with John’s ideas (and other free-market concepts previous outlined)Obama will not be able to use the televised meeting as a political stunt to trap the Reps into just saying NO to his bills. There is no way to modify a lemon to make it into an orange. You must plant a new tree!
Here is a more comprehensive list of reforms:
1. High-deductible Major Medical policies have been virtually regulated out of existence. This needs to be reversed. These policies used to provide very low-cost catastrophic insurance appropriate for people between ages 18 and (say) 50. But older people who have accumulated assets or large medical IRA’s would find major medical policies appropriate also. We must get rid of the laws that have driven major medical policies from existence.
2. States are violating the constitutional prohibition of trade barriers between states by prohibiting interstate and international competition in health insurance. This practice needs to be banned by Congress. Barring congressional action, this practice by the states needs to be litigated up to the Supreme Court. The state and national barriers drive up the cost of insurance a great deal and drastically limit consumer options.
3. The fee for class-action lawsuits payable to the attorneys in such suits should be limited to customary hourly legal fees only. The primary reason for permitting class-action suits is to provide a mechanism where, in situations where many people sustain low damages, it is possible to afford the cost of litigation by pooling the damages.
The fees the attorneys get in class-action lawsuits should not be a percentage of the damages awarded and should not include the remainder left after members of the class are compensated. Often this remainder is millions of dollars. This simple change would reduce medical costs as well as insurance costs.
4. Lawyers filing medical malpractice lawsuits should not be able to collect a percentage of the award. Their remuneration should be based on the actual hours of legal services provided, billed at their normal hourly rate. After all, the purpose of such suits is supposed to be to compensate the person damaged.
5. Legislation is needed to authorize medical IRA’s for all categories of employees such that money set aside in them may be invested there for life with contributions to them being either fully deductible (or better yet, eligible for dollar for dollar tax credit). Some form of these IRA’s is currently legal for some employers but should be for all individuals, as well as all employers.
6. Legislation is needed legalizing health-insurance co-ops that would bargain on behalf of individual buyers and small businesses.
7. A major problem with the current employer-provided health-insurance system is that the individual insured does not confront the full marginal cost of his or her medical expenses. Right now few employees have any idea of what things cost and consequently over-consume medical services.
To eliminate this problem, once the medical co-ops exist (see# 6 above), employers should lose any special tax privileges they may currently receive for providing health insurance to their employees. If the employer continues to provide a policy, such expenditures should be treated as income to the employee (which they are, in fact) and any tax exemption or credit for purchasing health insurance should apply to the employee, not the employer.
Companies could choose to serve only as a negotiator with the insurance companies to obtain the best deal for the employees. The employees would have to choose individually the specific coverage and pay the costs. With this option, employers would be required initially to increase the employees’ pay by the amount that it previously paid per employee for health-care coverage, since it is, in fact, part of each employees income now. Employees should be able to either have a dollar-for-dollar tax credit or receive a tax exemption for the cost of the employer-negotiated insurance coverage.
8. If a business chooses to provide health insurance for its employees, that policy should be “vested” with the employee once past probation. If the employee leaves, it should remain in effect for one year from date of purchase or until the employee obtains alternative coverage, whichever is less. If the employee who leaves is covered by health insurance, that person should be able to transfer coverage to a new insurer without new conditions.
9. Individuals should be legally able to opt-out of their employer’s insurance plan and instead have the money left in their monthly pay. The employee who chooses that option should then be able to either put that money tax-exempt (or deferred) into his or her medical IRA or purchase an individual insurance policy and not pay income or payroll taxes on the money.
10. Legislation should be passed facilitating creation of private medical foundations to fund medical care for the poorest people. Generous tax deductions or credits should be available to donors to these foundations.
11. Eliminate mandatory Medicare payments by employers/employees and require private health insurance policies to continue through the lifetime of the buyer. Younger workers would in effect prepay the probable high costs of their care when they are elderly. By eliminating mandatory Medicare, insurance companies would have to factor in the lifetime cost of medical insurance.
Buyers who could show insurance companies that they have very large medical IRA’s would be able to bargain for lower-cost insurance, particularly when they are elderly.
12. Health insurance buyers should not be required to buy “package deal” policies. There is no reason why a single person or married elderly persons should have to purchase a policy containing fertility service, pre-natal care, or children’s care, for example. Each buyer should be able to tailor the coverage to his or her own perceived risk profile and ability to pay.
These ideas would go a long way toward solving the problems people have identified with health care in America…cutting costs and improving service –while preserving our individual liberties.
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These are excellent proposals. Thatis probably why the administration, senate and house will reject.
Dennis
I submit that the following be added to your item 2 of 10:
Congress shall make no law that applies to the citizens of the United States that does not apply equally to the Senators or Representatives, and Congress shall make no law that applies to the Senators or Representatives that does not apply equally to the citizens of the United States .
A great resource for ideas to improve our health care system is the one in Singapore. I know from exprience as my wife has benefited from it. It will be worth while to study it.
[…] anticipation of the health reform summit on Feb. 25th, John Goodman has identified 10 things that need to change to make Obama Health Care Initiative accep… In other health care […]
All this misses the point. I’m hearing nothing that actually targets the root of the problem. Medical costs are to high and rising too fast. The only way to really get costs down is to empower individuals by getting the money into their hands to spend how and where they choose for health care. As long as it’s a third party spending the money costs will never come down. We should be encouraging health savings accounts across the board. We should prevent states from requiring plans to load up on benefits for all kinds of minor treatments like physicals and office visits. If individuals have to pay out of their own HSA they will start to shop for the best deal instead of just focusing on what their co-pay is. Put simply their is no incentive for cost savings at the patient level. There is really no free market in health and as long as that is the case cost will not come down. As long as costs don’t come down by free market competition there is no way any plan left or right will succeed.
And what no one has mentioned is that most if not all of Obamacare is blatenly Unconstitutional. And undoubtably will most certainly be chalenged by State and individual lawsuits.