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Steve Forbes' latest commentary calls on consumers to sign the new "Free Our Health Care NOW!" petition launched by radio host Mike Gallagher and the NCPA. 

Also, the new issue of Vital Speeches of the Day includes my recent Congressional testimony on exactly how we can resolve the health care crisis with consumer-driven health care reform.

On Monday, June 8th, NCPA Senior Fellow Laurence J. Kotlikoff will join me at a Cato Institute Policy Forum to present our plan to radically reform the financial system. The event will be streamed online. Details at Cato's Web site.

Comments (9)

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  1. says:

    Your Vital Speech was very soft on the dangers of employer-based health insurance.

    Also, if a poor family of 4 can get Medicaid for your reported $6,000 a year then everyone on employer-based insurance paying an average of $16,000 per year is paying $10,000 per year too much.

    With this twisted logic I prefer Medicaid being in control of all 2.5 trillion annually for US health care. The truth is more like taxpayers are being squeezed bone dry to pay $10,000 a year per person in New York for over-priced Medicaid.

    I hope Mike Gallagher isn’t boring about health care reform. After all, freedom is on the ropes.

  2. Vicki says:

    Like the petition.

  3. Bart says:

    In the Congressional testimony, I can understand why an insurer would have incentive to avoid the sick and attract the healthy given an equal premium for both. But what are the “incentives to under-provide care for the sick and over-provide for the healthy?” I would have thought the only incentive would be to pay out no more than required in either case.

    I suppose an insurer could try to delay claims payment for unprofitable accounts in hopes that the insured will either die or give up in frustration. But if that’s not controllable then we’re in serious trouble anyway.

    Obviously there is some scenario I’m missing, but I can’t think what it might be. In any case, as soon as formerly low-risk customer becomes high risk, wouldn’t the same situation arise?

  4. Bart says:

    Just a thought, does this mean, for example, that the insurer is extremely generous with routine and preventive care, but stingy regarding catastrophic coverage? But that would be spelled out in the terms. Dang.

  5. says:

    Even the socialists who want single-payer are better at warning citizens about the dangers of employer-based insurance than Dr. Goodman.

    The socialists report that Americans who have employer-based insurance simply lose their coverage and go bankrupt.

    Not one of our HSA clients, in 12 years, has ever lost their insurance because they lost their employment. We have never had a customer complaint and we have had hundreds of heart attacks, cancers and strokes.

    7-Eleven’s 1st HSA (MSA) in January of 1997 had a heart attack. Mike’s HSA insurance paid 100% after the $4,500 family deductible. Mike followed doctor’s orders and quit smoking and his HSA premiums dropped like a rock. Mike can now sell his store and keep his portable individual HSA health insurance. Mike is still a customer.

    I have to give Dr. Goodman a “D” on that speech, sorry.

  6. John Goodman says:

    Reply to Bart:

    The plan is making a profit on healthy people. So it has an incentive to over-provide to keep the ones it has and attract more of them. You over-provide by providing spa services and well checkups and other benefits that are basically not worth the cost — at least to a health plan.

    The plan is losing money on sick people, so it has an incentive to under-provid — to encourage the exit of those it has and discourage the enrollment of others just like them. You under-porovide by failing to include the best specialists in your network, ruling that lots of drugs and procedures are “experimental,” etc.

  7. says:

    Socialized Medicine Newsflash

    Kennedy’s Socialized Medicine Is an Over-Priced HMO

    Senator Ted Kennedy’s health reform will cost the consumer 550% more and force them into HMOs.

    Kennedy’s plan extends Massachusetts state reforms to the remaining 49 states. Massachusetts Connector is the state’s exchange and competition is restricted to Blue Cross of Massachusetts and 5 other small insurance companies. The state has divided up the health insurance pie. The cheapest price for a 30-year-old male from Blue Cross in Boston is $326.88 a month for an HMO. The same person can get HSA insurance in Lansing, MI for $57.41 a month from America’s oldest health insurance company. Both plans have a maximum out-of-pocket of $5,000 annually but the Blue HMO only pays 50% on Rx and the cheaper HSA plan pays 100%.

    The HSA plan comes with a free HSA account at THE Bank. The expensive Blue Cross HMO does not qualify for an HSA so consumers must pay deductible, vision and dental expenses with after tax dollars. The HSA plan has a 24 month rate guarantee and the Blue HMO doesn’t. The HSA plan is worldwide coverage and the Blue HMO gatekeeper must keep you in cities in Massachusetts. Senator Kennedy wants to eliminate Blue Cross competition then pass a law that citizens must purchase health insurance, exactly like they have done in Massachusetts.

    Ron Greiner says HSAs are magical. If the above consumer is in the 28% federal income tax bracket and saves $3,000 in his HSA at THE Bank he will save $840 in federal income tax. In other words, he saves more in federal tax than the cost of his insurance. Plus, there is no payroll tax on employer HSA contributions. Employers save workers comp and payroll tax and employees save payroll, federal and state income tax. It’s smart when employers and employees band together and cut high taxation out.

    HSAs are line 25 on the front page of the IRS 1040. HSAs enjoy tax free deposits, growth and withdrawals. Total tax freedom. Savings that is never taxed will last longer in retirement.

    HSAs are the centerpiece of health care reform at the RNC. Ron Greiner enrolled America’s 1st HSA in 1996 and is better at explaining them than any of the current crop of talking heads. Socialized Medicine is still just a dream of Democratic politicians where the HSA is the law of the land. When the public learns of tax free HSAs they will become an overnight sensation. The HSA is proof that you don’t need government to have a plan. The best tax cut is NO TAXES and it’s TIME for your HSA.

    The Blue Cross Blue Shield Foundation of Massachusetts and the [Robert Wood Johnson Foundation] have polling that says employers actually approve of employer mandates to purchase health insurance.

    Got the Blues, paying 550% too much? Do you desire a gatekeeper to decide if you need a specialist? Do you need the government’s help to sell you Blue Cross?

  8. Bart says:

    John, thanks for the reply. It sounds like I came pretty close, but thought you might have been talking about incentives to cheat rather than plan design.

    It seems to me that the effect you describe would be self-limiting, in that cost-ineffective preventive care would presumably be available to everyone in the plan, so that the cost of such services would be added roughly dollar-for-dollar to the premium equally for all subscribers. Absent a large tax subsidy, wouldn’t price resistance kick in at about the same place it would if the consumers were paying for the services directly? And healthy subscribers will still demand good catastrophic coverage, whether they expect to use it or not.

    Another thought is that with underwritten coverage, healthy people with low premiums should have more disposable income available to spend on upgrades such as spa services or questionable preventive care, while people with high premiums would tend to scrimp. A flat-dollar-amount tax credit would only intensify this effect. So I wonder how much real difference to expect between underwritten and non-underwritten plans.

    I suppose one could try measure the effect by comparing existing individual plans with employer sponsored group plans, at least with regard to catastrophic coverage, access to specialists and new drugs, etc. But at the other end of the scale, comparing amount of spa and preventive coverage, I’ll bet it would be hard to control for the influence of the tax exclusion. Maybe it would be possible to compare plans for high versus moderate tax bracket workers, in order to extrapolate the tax effect. Any excess might then be attributable to lack of risk rating.

  9. Bart says:

    > …in order to extrapolate the tax effect. Any excess might then be attributable to lack of risk rating.

    Should have been “…in order to extrapolate the full tax effect. Any excess well patient spending after correcting for tax incentives might then be attributable…”