Saturday, May 06, 2006
Health Care Problem
No one denies that there is a problem. No one, that is, except a few ideologues like Grover Norquist who think the problem can be solved if the government gets completely out of the situation and lets people buy their own health care, just as they did in the days of Calvin Coolidge. Let’s start by trying to achieve agreement on the true nature of the problem. Here are some thoughts, not all of them mine:
If left to itself, the health care problem is going to get worse. Effective action by government is needed to remedy the problem. However, proposals to help solve the problem have become politicized. Republicans have one set of proposals, Democrats another. Neither side likes the other’s ideas. There’s a stand-off. At present, the only plan that has a chance of enactment is one that is acceptable to members of both major parties.
Massachusetts provides an example of a plan that was acceptable to both Democrats and Republicans in State Government. The State has a Republican Governor and a legislature with majority Democrats. The plan includes the following elements:
At present the State is running a surplus. Because of competition, insurance premiums are not excessive. There is money at present to fund the system so that it can get off to a good start. The whole country is watching the Massachusetts experiment.
I wish the experiment well. However, as a “lefty” (according to one of my friends), I foresee some problems. By allowing people choice of which insurance company to patronize, the State allows the insurance companies to “cherry pick” and insure the most healthy individuals at low premiums. Individuals with preexisting health problems will have to pay more for essentially the same insurance. Since the State provides a subsidy to those who can’t afford insurance, the State will be in effect subsidizing the sick. I doubt that this is a politically sustainable position. Insurance companies should be required to insure everyone at the same premium, regardless of any existing condition. The whole idea of insurance is to enlarge the pool and the risk, so that everyone contributes to the pool that covers the health care for those who need it.
At least, that is the classical excuse for insurance. Nowadays, insurance companies are in business strictly to make as much profit as possible. You make profit by selling policies that you are not likely to have to pay out on, that is, policies to the healthiest individuals you can find.
My recommendation is that a plan like the Massachusetts plan be based on a single insurance entity, a non-profit entity established by the government, one that insures everyone. That is, I favor the “single-payer” approach to health insurance. This single insurer would not have to pay for advertising costs and would provide insurance at a lower cost than any private for-profit could.
Anyway, it’s a good first step. I hope it turns out well.
- Health care costs too much. Many people can’t afford preventive health care and must go to hospital emergency rooms when they are seriously ill.
- If health care were free, many people would overuse it and the system would be even more expensive than the present hodge-podge.
- Health care, just like police protection and fire fighting, should be a public right, available to all at no cost. That is, the cost would be paid out of taxes, just as the police and fire fighters are paid.
- Different people have different health care needs. A single universal system would not be flexible enough to meet the special needs of some individuals. Individuals should have a choice in what system they enroll. Competition between different systems would keep prices low.
- Shopping around for health care is different from shopping around for auto insurance or for autos. If you buy a car and it turns out to be a lemon, you can sell it and buy another. If you have a hip joint replaced and it turns out to be a bad job, you have difficulty trying to have the joint replaced. It’s a lot more expensive than buying another car. Riskier, too.
- It’s silly to believe that health care consumers are going to be able to choose the cheapest and best health care provider. I wouldn’t try to do such a thing myself. My own approach would be like the approach I took to finding a contractor to repair the roof on my house. After interviewing several contractors, getting bids, and finding out just how they proposed to repair the roof, I settled on the contractor that I had the most confidence in and who told me the most believable story. He did an excellent job. His bid was the highest. I am very satisfied with his work and would recommend him to any acquaintance.
If left to itself, the health care problem is going to get worse. Effective action by government is needed to remedy the problem. However, proposals to help solve the problem have become politicized. Republicans have one set of proposals, Democrats another. Neither side likes the other’s ideas. There’s a stand-off. At present, the only plan that has a chance of enactment is one that is acceptable to members of both major parties.
Massachusetts provides an example of a plan that was acceptable to both Democrats and Republicans in State Government. The State has a Republican Governor and a legislature with majority Democrats. The plan includes the following elements:
- Everyone in the State is required to purchase health insurance. This feature pleases Republicans who believe that individuals should take responsibility for their own health care. It also pleases people who believe that individuals should have choices regarding the details of the health insurance they pay for.
- The State provides subsidies to people with low incomes who otherwise can’t afford the premiums on the insurance. This feature pleases Democrats.
- Limits are set on fees that health care providers can charge the insurance companies. This feature pleases the insurance companies.
At present the State is running a surplus. Because of competition, insurance premiums are not excessive. There is money at present to fund the system so that it can get off to a good start. The whole country is watching the Massachusetts experiment.
I wish the experiment well. However, as a “lefty” (according to one of my friends), I foresee some problems. By allowing people choice of which insurance company to patronize, the State allows the insurance companies to “cherry pick” and insure the most healthy individuals at low premiums. Individuals with preexisting health problems will have to pay more for essentially the same insurance. Since the State provides a subsidy to those who can’t afford insurance, the State will be in effect subsidizing the sick. I doubt that this is a politically sustainable position. Insurance companies should be required to insure everyone at the same premium, regardless of any existing condition. The whole idea of insurance is to enlarge the pool and the risk, so that everyone contributes to the pool that covers the health care for those who need it.
At least, that is the classical excuse for insurance. Nowadays, insurance companies are in business strictly to make as much profit as possible. You make profit by selling policies that you are not likely to have to pay out on, that is, policies to the healthiest individuals you can find.
My recommendation is that a plan like the Massachusetts plan be based on a single insurance entity, a non-profit entity established by the government, one that insures everyone. That is, I favor the “single-payer” approach to health insurance. This single insurer would not have to pay for advertising costs and would provide insurance at a lower cost than any private for-profit could.
Anyway, it’s a good first step. I hope it turns out well.
