Attempt to start a real conversation on a bi-partisan health plan

by Chana Cox

Disclaimer:  Although I am a member of a political party and of other organizations, I am not speaking for any party or any organization in this post. This is simply one individual’s attempt at stimulating a conversation on a cobbled together, potentially bi-partisan plan for our own very blue state. As with my posting on Glass-Steagall, I anticipate that this will be controversial.  (As a potentially bi-partisan plan it violates some of my own ideological principles.)

So, Oregon Catalyst reader, what would you need to know, to add, or to change before you would even consider such a plan?

In Oregon, the left wants universal coverage, the right wants individual choice, everyone wants to control costs, and virtually everyone is agreed that Obamacare does none of these things.  The left wants to soak the rich, the right wants to get business off the hook for basic health care, and almost everyone wants to greatly reduce the administrative burdens of the current system.  So here’s the plan…

The State of Oregon applies for exemptions from all Federal Health care mandates in return for a block grant and a commitment to use those funds as partial funding for The Plan described below.

  1. Every Oregonian contributes a fixed (by law) percentage of his/her/questioning income to fund The Plan because there is no free lunches much less free health care.
  2. Every individual, adult or child, irrespective of employment status or pre-existing medical conditions will receive (a) a voucher of precisely equally monetary value, and (b) $2,500 to be deposited into a Health Savings Account (HSA).   The voucher must be used for the purchase of a health insurance package.  The balance of the voucher amount, if there is a balance, must be deposited in the HSA. Vouchers and HSA funds for children will be managed by their parents or legal guardians.
  3. Private insurance companies (in state and out of state) may bid on providing packages that would be paid for by the voucher.  All such insurance plans would be open to all individuals.  The minimum required plan “Model T Plan” must cover prenatal doctor visits, inoculations for children, and the minimum catastrophic care for every individual.
  4. The Model I Plan would cover any life threatening condition after a deductible of $5,000.  The definition of “life threatening and the level of the coverage will be determined by the state.  One of the strengths of the original Kitzhaber health plan was that it transparently, exhaustively, spelled out what would and would not be covered by taxpayer subsidized health plan.
  5. The taxpayers are only on the hook for the Model T and the HSA.  Beyond the basic Model T, insurance companies may offer particular groups of individuals plans with supplemental packages of benefits to supplement the Model T.   There could be Daimler, Packard, Volvo, Mustang, Expedition, and Corvette plans each with very different benefits.  The insurance company is under no obligation to offer everyone the same set of supplements.  Which supplemental benefits are selected will be determined by individual customer preference and insurance companies and not through either government regulation.  Costs of insurance in excess of the voucher amount would be the responsibility of the individual purchaser.
  6. Once each person has purchased their preferred health insurance package, they will put the balance of the voucher amount, if any, into the Health Savings Account.  HSA funds not spent in one calendar year would roll over and into subsequent years.  All HSA funds would be deposited in an account in an FDIC insured bank or with an approved HSA servicing company where they may earn interest.  Those funds could be accessed through a debit card, or, or by submitting bills for reimbursement to an approved HSA servicing company.  The funds will remain the property of the insured individual, but may only be used for their own health care expenses, or, in the case of adults, for their spouses or their children.  In contrast to the criteria for the Model T Plan, however, allowable HSA expenses will be very broadly defined.
  7. Individuals currently in the VA system or the Medicare system could, at their option, remain in those systems.

 

Chana Cox is a Senior Lecturer Emerita at Lewis and Clark College, and she has a Ph.D. from Columbia University and a BA from Reed College. She has been a featured speaker at U-Choose events.

 

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Posted by at 02:10 | Posted in Health Care Reform | 50 Comments |Email This Post Email This Post |Print This Post Print This Post
  • Branxton

    I cannot support any plan where I have to pay. Health care is a right. I must have it even if I cannot afford it.

    • We all have a right to own a gun. That DOES NOT imply that someone else should buy if to you.

      We all have a right to a free press. That DOES NOT imply that someone else should buy if to you.

      OR do you advocate that every one get a free gun and free printing press?

      Thanks
      JK

      • 3H

        Oh for God’s sake Jim… he’s not serious.  He does that all the time.   It is supposed to be satirical.

      • 3H

        I don’t need a gun to say alive..

        I don’t need a printing press to speak…

        I need health care to cure the illness that might kill me. 

        If you can’t see the difference, then I can’t help you.

  • Brodhead

    I think you are living in Lala land.

    5 million baby boomers will retire each year for the next 2 decades. Medicare will balloon to 80 million folks supported by a labor force of between 175 and 200 million folks on low paying globalized service based economy jobs. Health care inflates by 10% a year. In 7 years, a health care policy will double. Medicare will quadruple in cost.

    Average policy costs range from state funded policies of $250 to Tricare Retired Reserve at $1040 a month. Then there are special pools for pre-exsisting conditions etc. that cost much more. Once you have a pre-existing its hard to get insurance.

    America is seeing an epidemic of childhood obesity, hypertension, diabetes, and disseases associated with the American/technology lifestyle. This reality will drive healthcare from 16% of GDP to 30% of GDP within 20 years. Healthcare costs will skyrocket. Adding any government involvment beyond Medicare. Medicaid, and children’s health care is going to bankrupt America…In fact, we will just be working for the federal government, boomer entitlements, other peoples health care, and Chinese made products off of devalued currency….

    I f people truly want healthcare, let them buy their own……………………
     

    • 3H

      And if they can’t buy any, let them die.

  • 3H

    “The Model I Plan would cover any life threatening condition after a deductible of $5,000. …”

    How will the poor be able to afford this?  LOL..  or.. would they just go get care they need to save their lives, and then worry about paying the bill later?

    • Chana Cox

      The HSAs mean that the poor will have more than enough money to cover the deductibles — except in the case of those who are critically ill from birth.  Remember those funds will be sitting in your bank account and growing.  If a child is critically ill from birth, her family members may contribute their HSA funding.  

      The HSAs would also mean that relatively healthy people could, over time,  accumulate the funds to use alternative health care services and to have elective procedures. 

      HSAs are working in INdiana for the poor and they are working at any number of upper middle class companies like Whole Foods for the relatively well off.  

      I am not certain of the size of the Medicaid HSAs in Indiana and South Carolina.  Anyone out there know. 

      • 3H

        Well, would there be a mechanism for if they young children, and they wasn’t a lot of family with $$, that the government would pitch in?  Or, does the family just quickly sink into debt?

        How would you see this being phased in?  Obviously plans for the elderly are going to cost more – since they tend to need more care.

        How does the cost compare, to the government, of a single payer system?

        This will be the government providing every man, woman and child money for health care, right?  Is there a mechanism in place to control costs?   Otherwise the level of services will just drop.    

  • Anonymous

    I believe this is correct. I also believe this is the kind of plan that we are likley to end up with, though somewhat less generous as it will be forced on us by our creditors who won’t give a hair about healthcare for seniors and the needy. Read “Penny Health” articles if you dont have insurance.

  • Bob Clark

    Sounds better than ObamaCare and the Oregon health plan. Don’t know if the numbers support this approach.  Vouchers might have to be a lot bigger than here to cover health insurance premiums.  First glance.  Keep on cooking, though.

  • valley person

    I expect you posted here to get a right wing response. I’ll give you a left of center one.

    First, I think you mischaracterize Obamacare. It does provide near universal coverage. The only way to get full universal coverage is fully socialized insurance, like in Europe. He didn’t have the votes for that so did not bother to try.

    Second, On “individual choice,” this is a cannard. We never had it to begin with, so won’t have it under Obamacare either. Most Americans get their insurance through their employers, and have a “choice” of maybe 2 or 3 insurance options.  The individual market has more choices on paper, but not in reality. In fact, many individuals can’t “choose” any insurance at all due to pre-existing conditions, which Obamacare eventually does away with. So for these people, choice is increased, not decreased.

    Third, the left does not want to “soak the rich.” The rich, or top 1% has seen their incomes and wealth grow much faster and larger than the other 99% of working Americans, who have had mostly stagnant incomes and have lost a great amount of our net worth in the housing crash. (Rich people have way more stocks and other securities, and have proportionately less of their wealth in housing). What we want is higher taxes on the rich in recognition of this fact of life, in order to maintain spending on programs important to the vast majority, like SSI and Medicare.

    Fourth, I don’t see “the right” getting business off the hook for medical care. quite the opposite in that by resisting government taking health care over, they leave insurance as a private business benefit.  If they were smart, they would look for ways to get business off the hook because it would make the US way more competitive abroad. But they are not smart, they are ideological.

    As for your proposed program, I believe we have the right to opt out of Obamacare and produce our own approach as long as it meets the coverage goals equally.
     

    • Chana Cox

      No, valley person.  I am extremely interested in seeing how this plays out on the left of center although I am clearly right of center.  I am trying for a b-partisan plan.  Let me reply point by point. 

      1.  “First, I think you mischaracterize Obamacare. It does provide near universal coverage. The only way to get full universal coverage is fully socialized insurance, like in Europe. He didn’t have the votes for that so did not bother to try.” 

      My plan DOES provide universal health care — although, if the numbers are to pan out, the health care would have to be stripped down as medicare and medicaid are now.  In addition, countries like Israel and Australia which provide universal socialized insurance also use vouchers and top up options to allow for choice. 

      2. Individual choice is not a canard.  You yourself point out that our present plans do not really have much in the way of individual choice for consumers.  Given the HSAs my plan would have a great deal more individual choice.  We on the right believe that this feature would not only expand individual liberty but would contain costs.  At the moment, as a member of a traditional health care plan, I cannot effectively contain the costs of my own health plan.  

      3.  This is not a save the rich plan.  It is, as you will notice, a tax the rich plan.  One of its down sides that worries me a great deal is that it would up the income tax rate for individuals in Oregon.  I think, however, it would lower the total cost of health care for those people who actually do business in Oregon and employ people in Oregon.  It would also lower their paperwork burden.  It would depend on how the numbers pencil out and on whether the government could restrain itself on the Model T plan, but I think something like this could be very good for attracting business to Oregon.  My friends on the right, do not believe that people in government are capable of limiting these expenditures, but perhaps if the percentage of income tax is fixed by law and if citizen’s approval would be required to up that percentage it might work.  Again, I have my own doubts. 

      4. Insurance as a private business option works far better than a totally government insurance system even in systems with long traditions of fully socialized health care — again I cite, Israel, Australia, and even Britain in which top-up private insurance is a very hot commodity and high in virtually all union negotiations. 

      • valley person

        Health policy is not my area of expertise. Nevertheless:

        1) I’m all for a 2 tier system with basic insurance, provided by the state, paid for through taxation, topped off with supplimental private insurance. France has this, and they are rated the best overall system in the world. But without the basic insurance as a foundation, topping off is problematic. You have to have something to top off.

        2) I’m skeptical about the value of HSAs. From what I’ve read, about 80% of total health care expenditures accrue to about 20% of the population. We are talking really big costs for a few people with chronic or catastrophic conditions. HSAs would at best help constrain some costs on the other 20% of expenditures. And individual choice would still depend on the underlying policy, not the HSA, which would only matter for routine care. The real potential savings in health care are in the 80% arena, not the 20%.

        3) The rich are perfectly capable of saving themselves. Lets not worry about them.

        4) On lowering business costs. This would be great, but if it just shifts costs to consumers, then they have less to spend on other goods and services, which hurts the 80% of Oregon businesses that need local customers.

        5) Comparatively, the best systems in the world are basically medicare for all with a private insurance top off. These provide the best services at lowest cost with maximum free choice of providers. If “conservatives” want to save money and improve choice, medicare for all is the way to go. What many conservatives confuse is choice of insurance versus choice of provider. They have focused on choice of insurance as the important thing, which makes little sense in the market place. 

        • Joseph Cox

          I lived in Australia and experienced the system there. IMO, the benefit of HSAs is that it can drive down the little stuff. The big stuff tends to be a collection of a bunch of little stuff (bandaids, office processes, paperwork, sutures, medical equipment expensing etc…). The HSAs can drive improvements in the little stuff. My wife had surgery in Oz. Her bill (prior to government health plan support or insurance) was $1800. It would have cost $15,000 here. We ended up covering $600 out of pocket. My father (a foreigner) was in the ER for 2 days in isolation. His bill – sans any government support at all – was $1200.

          You can lower costs when people begin to shop. Look at Indian costs in Western-facing hospitals. There outcomes can be great and their costs are amazing (like $4500 for open heart surgery with survival rates as good as the US).

          We need the ‘public’ option to include actual purchasing of small stuff because people will want to save their HSA dollars. A little of that can help a lot of people. Check out https://www.365shorts.com/?p=11.

          We can’t micromanage costs down. We need a market where users are buyers – not insurance companies. But we also need people to have a backup when the big stuff hits.

    • Oh my GOD! Dean actually said something rational:

      We should end employer supplied health insurance!

      Thanks
      JK

      • valley person

        “We should end employer supplied health insurance!”

        And replace it with basic Medicare for all plus private supplemental insurance as a top off. Like France. Simple, effective, affordable, and you get to go to any doctor you want who will take you on.

        • Dean Apostile (Valley Person): … replace it with basic Medicare for all plus private supplemental insurance as a top off.
          JK:  Why medicare for those that can afford to pay their own way?

          Why not end the long list of things health plans MUST cover and allow a free market?

          Why not have all (except charity cases) just pay their own health bills with government help ONLY when they get to the point that the bills are a genuine danger to ones financial health? That would minimize government tampering with people’s freedom.

          (Never forget that government decisions are NOT made for the good of the people, they are made for the good of the politically influential people.)

          Thanks
          JK

          • Joseph Cox

            I think the Model T plan need only cover life-threatening situations. It should be very limited. The reason to give it to those who can pay their own way is the same reason we let them go to public schools if they wish. They are outsized contributors, there is no reason to lock them out of the system.

            The HSA model is one that encourages people to pay their own way until a substantial deductible is met.

            That said, you *could* have variable deductibles based on income. Richer people could have higher deductibles – poorer people or chronics a lower deductible. This works well, except for one issue – income is a trailing indicator. Often when health problems are substantial (e.g. life threatening), income vaporizes. These Model T situations are for when peoples financial health is being challenged anyway.  

          • 3H

            But you are all talking about a sizable government investment… and you don’t want the government to oversee or in any way regulate the way that money is being spent?  If the amount being given to people is insufficient, then the government will need to raise the amount.  They have a vested interest in making sure that costs are not simply rising to increase profits without also increasing coverage.

            Where does all this extra money come from, by the way?  I think Ms. Cox mentioned that this is something the states should do.   Where are they getting the money?

          • Joseph Cox

            It can regulate like it does now – enforcing anti-trust and collusion laws. Otherwise, the market can do a superb job at rewarding those who can cut costs within the basic Model T constraints. Remember, today companies have a vested interest in limiting benefits if they can limit costs – so long as their reputation isn’t poor. Few people will reject a job opportunity because the health insurance isn’t as good as they’d like. Under this system, people are free to reject systems that cost more without providing reasonable benefits.

            The money comes from a tax on income specifically for healthcare vouchers/HSA funds as well as federal medical block grants. 

          • 3H

            Or.. as it happens now.. the HSA will cover less and less as medical costs continue to rise.   Insurance companies want to profit (I assume).   That profit model has yet to reduce soaring medical costs.  And today insurance companies are not limiting costs, they are increasing premiums.  Or..  offering plans with less coverage.

            But, we will have to raise taxes to create and maintain a HSA for everyone, right?

            Why an HSA model, and not, say, the French model?  Single payer for basic coverage, additional coverage provided by independent insurance carriers.   So states like Washington would have to adopt an income tax?   Or, are you having the feds collect the money, and then push it back to the states?  Why have that extra step?  Wouldn’t it be more effective to simply cover everyone at the Federal level?

          • Joseph Cox

            Medical costs don’t need to continue to rise. This is the fallacy created by our distorted ‘market.’ It is like private colleges – they wouldn’t cost so much if they weren’t so subsidized. In addition, there is no private model on insurance – because so few people can actually buy it for themselves judging benefits and costs around their own needs – rather than companies putting together group plans with very different incentives.

            In other words, there is currently no ‘market’ for health care or health insurance.To the single payer system – wouldn’t it be simpler to have a single federal grocery store for basic necessities like grains, milk and eggs? Then people can top up at private stores for the fancy stuff like steak and garden burgers? That is a good way of making sure everybody has food, right? Grocery stores have a profit incentive so wouldn’t Government Groceries would be cheaper and easier. There are many reasons we don’t do this – and food is no less important than health.

            IMO, the food stamp model – despite going through private entities – is far more persuasive.

  • HBguy

    I’d make one additional provision. Allow people to opt into medicare, adjusting the HSA to account for increased benefits they may get.

    Also, I don’t quite understand how you claim that the HSA will take care of any deductible should someone suffer from a catastrophic illness if the deductible is 5,000 and the annual HSA is 2,500. Even if you could pool a families HSA together what about single people, or smaller families with more than one ill person?

    • Chana Cox

      These HSAs are revolving.  They are not returned to the government at the end of the year.  They sit in your bank account and accrue interest over time.  Interest compounds.  Unless you are chronically ill, you will have $5000 in your HSA within two or three years at most.   

      Again, no system is perfect, but we have seen — with the current increase in concern over actual prices generated by HSA options — that the range of costs the hospitals charge for the big things are awesome.  Whatever the rhetoric, neither the government nor the insurance companies are doing a good job of shopping for lower cost alternatives.  Perhaps the whole system is skewed because of price controls on some items.  Perhaps the insurance companies’ are afraid of legal suits if they do go low cost.  Individuals would be in a much better position to shop.  If, as Joseph Cox, has pointed out, I needed to have open heart surgery, I might opt to go to India to get it.  That might spur some US hospitals to actually compete with India.  A fair number of Canadians are now going this route because their socialized systems does not cover a great many things for older people and the waiting lists for procedures it does cover are very long.  A fair number of Americans are doing tourist dentistry these days.  In fact, a fair number of Canadians are coming to the US for procedures they cannot get in Canada. For many years a doctor telling a Canadian patient that he or she needed a surgery which the system would not covered made the doctor a criminal.  More recently a Supreme Court decision in Canada ruled that unconstitutional.  Systems adjust to reality. 

      Again, as a conservative, I am not looking primarily for choice in insurance plans.  I am looking for maximizing all my health care choices.  In the interests of equity, I am also looking for a system that does not systematically discriminate between those who are employed and those who are not employed.  

      I am urging this kind of compromise now at the State level because I think there is a flexibility now that wasn’t there a few years ago.  Obamacare is granting waivers to all kinds of states –and to blue states in particular. 

      Whether it would make sense would depend on the numbers.  Who knows?

      • HBguy

        So..you answer is to not get too sick for a couple of years (That’s assuming you take nothing out of the HSA during that time, which is hard to imagine, given most people do to a dentist a couple times per year. May get glasses, have a checkup).

        Here is my real life experience.

        My employer has an HSA option. Here’s how it works. Employees who use the HMO get all premium paid. If you sign up for the HSA, then the company pays the premium for that high deductible policy, and contributes to the employees HSA in an amount equal to the saving between the cost of the HMO and the high deductible policy. 

        So, if the HMO cost the company $500/mo, and the HSA policy cost the company $400/mo, those that opted into the HSA received a company contribution of $100/mo. Of course, in order to max out the HSA which most people want to do and is a reason to get into the program, the employee would also have to contribute $108/mo of their pre tax wage to thei HSA account. So the employee who elects the HSA sees the deductin coming right out of their check every month. They don’t like that.

        One person signed up. All the rest didn’t want to take the risk, as they saw it. 

        The one person who did sign up ended up using virtually all of the HSA money on regular maintenance on the family so far this year.

        In essence, the HSA employee ended up paying $1300 out of pocket this year (so far). Though it was the equivilent of about $1000 take home. I haven’t figured out what all the co pays would have been for the services rendered, or what the cost of all the dental work would have been. Perhaps more than $1,000 I guess. But I will tell you right now. Most people are uncomfortable with the HSA, they are risk adverse, and those that have HSA’s are, frankly, don’t really have an opportunity to shop around. They are still seeing the same providers because the company providing coverage is the same. 

        Here is my take on HSA’s. They work OK. There is no great benefit to the covered person. There is little opportunity to “shop around”. There is some benefit in being able to pay for services that are not normally covered using pre tax dollars (in our case dental is not covered under the HMO). Most people are too risk adverse, or not analytical enough, to want to move to an HSA. And, even if you could convince people there is some financial advantate, they won’t risk changing their health coverage because of a few dollars advantage.

        I believe the ONLY way people will migrate to an HSA is if it’s the only option they are provided. OR, if you can easily show that there will be huge savings to the employee. Otherwise, they would prefer to stay with a known quantity, not have a monthly deduction from their paycheck, not have to keep records of how much they paid, not have to deal with another bank account, and not have to submit expense reimbursements.

        So, I am well aware of how an HSA works. How people react. How to implement one. The pitfalls and the psychology behind employees opting in or not. The HSA is a creature of the insurance companies, I think wanting to offer a lower cost product to companies who had to chose between keeping some insurance or dropping it as the cost of traditional policies shot skyward. It has little to nothing to do with cost containment or reform. Those rationales simply arose as a marketing byproduct.

        • Joseph Cox

          I have to disagree here. Bush created the HSAs to encourage market forces in healthcare. They were not widely adopted for all the reasons you list. All of those reasons – by the way – would apply to any market. Traditional insurance protects both buyers and suppliers from the market. So do government subsidized student loans. But both result in massive cost increases.

          Take a look at one of the nooks of healthcare free from insurance – laser eye surgery. Insurance rarely covers it. And because of this, costs have tumbled while service has improved. This is how most technology-driven markets function. I am reminded of a friend who had two surgeries. One was for his ear – covered by insurance. One was laser eye surgery. He chose the cheapest eye surgery  – even though results were a little less ideal – but he chose the most expensive ear option, because he wasn’t paying.A large number of HSA users – the impact of making them the standard option – would result in major changes.1) Hospitals and doctors would need to actually publish prices for services2) Backroom deals and impossible accounting and paperwork would drop by the wayside – consumers simply won’t buy from people whose prices they can’t understand3) People would get a whole lot better at conserving health dollars.

          I’ll revisit Australia. There, you get a bill. A simple bill with various providers and their charges. You can get estimates in advance and choose providers (like which anesthesiologist you’d like for your baby delivery) up front. The government covers some of the bill. Insurance helps with the some more. And then you cover the rest. Most often, you handle the paperwork – sliding your insurance card at the provider and forking out the non-insured cost up front. Then, you take your receipt to the government to get their part back. You end up with money out of pocket – but aware of costs the whole way through. 

          • HBguy

            But from what I see, (at least based on the experience my employer had) an HSA is different than what they have in Australia in one important way. And that is important in that it is one of the main arguments for cost containment through user action.

            It appears that in Australia you have the ability to hire who you want and get treatment where you want. Here, I think that you are stuck with the insurance company’s providers, because they negotiated the fees up front. 

            So, should we require all health insurance to cover treatments from any provider? Understanding that the insurance company will pay the same price per procedure regardless of who the provider is? That could be a step in the right direction.

          • Joseph Cox

            That’s what they have there. You get a bill – THEN you swipe your card and the insurance company pays some of it. They could drop providers (for example those who cheated them through false billing). I also remembered ours dropped one top-tier maternity hospital because the rates were too high (the hospital was putting up people on their 2nd+ child in a 5-star hotel for their post-delivery stay, which is normally 5 days there. Apparently the hospital thought it was cheaper and opened up more bed space – and the insurance company disagreed.) 

            But the prices were the same no matter which insurance company you used – and the insurance had a yes or no answer as to whether they’d provide their standard compensation to a provider. They couldn’t do different rates for different providers.

          • valley person

            Since your proposal includes mandatory participation, how does that square with the constitutional arguments conservatives have been making against Obamacare?

          • Joseph Cox

            It is a tax. Not a fine for non-participation. Everybody pays the tax, no matter what they buy or from whom. They get back a voucher. I suppose they can choose not to use it. It is just like school choice. We all pay tax for schools – conservatives just want more freedom on where/how the money is spent.

          • Chana Cox

            Valley person, This plan, I believe, would be constitutional in that it would not be a federal plan.  The federal government is precluded from doing things that the state is not precluded from. In addition, this plan does not mandate that you buy health insurance.   

            I would not advance this as a federal plan in any case because the federal government can print, at will, fiat currency. The state remains under some pressure to keep costs in check and limit its debt.  Nor does the state government have the same ability to coerce particular forms of rationing.  

            HBguy, This proposed plan does not have employees paying for the HSA or the model T.  Both are taxpayer covered for the basic Model T plan.  All the taxpayers would pay and not the insured individuals themselves.   Individuals would not be choosing to buy or not to buy such a plan.  There would be no direct costs to individuals for that basic plan, and that basic plan would cover, at a minimum, life threatening cases and the HSA.  This plan is in many ways much closer to many “socialized medicine” plans than Obamacare.  The government might in fact mandate doctors and hospitals for the basic plan — as they effectively do already for medicare and medicaid.  One way or another the health care under medicare and medicaid is now being severely rationed — and not very efficiently or transparently.  That is why so many people purchase Medicare Advantage. 

            Neither the government nor the insurance company will be able to mandate for the HSA.  There are providers available in this and in other states that are handling directly paid for or debit carded procedures.  They are far more competitive.  I will try to look up the figures for you.  

            The top-ups are optional and you would pay for them.  The insurance company would not control your choices unless you consented to buy their insurance plan.  I don’t see how your insurance company controlled your HSA funds, but I don’t know the particulars of your company plan. 

            And yes, this plan seems to favor families over singles.  The current plans do as well.  If your company was like mine, I paid for myself as the employee, for my spouse, and for my family.  I paid much less for my spouse’s coverage than I did for my own and it wouldn’t have mattered on my group insurance whether I had one child or nine children.  This proposed plan treats every individual as an individual except that parents can choose to allocate some of their HSA to their children.  Note that they cannot allocate their other children’s HSA’s to a child.  

          • HBguy

            The insurance company doesn’t control the HSA funds. But the insurance coverage that was provided did provide the medical care once the deductible was met. I guess I could have gone to one doctor for my deductible, then when I met it, switched over to the insurance provider, but really??? That’s not going to happen in real life. 

            And I get it that the voucher is paid for by the government. But it just seems to me that you’re bending over backwards to involve insurance companies in the “basic plan”. Why not just make it Medicare for all as the basic plan. There would be fewer  overhead costs, and better cost control because of market share. I appreciate that your ideas here are actually pretty good, I just don’t see the need to involve private insurance in the basic plan, other than political reasons. That is, insurance companies stand a lot to lose if  50% of the market is covered under Medicare.

            As to funding. Whoa boy……this is where it gets really tricky. You need to minimize the winners and losers as much as possible, which means probably a tax on employers or a payroll tax paid by the employer, for health care. Since they are the ones that have been paying for it most, they will be the ones with the least net win/loss. So the less reasons to object. Of course, you will get the employers who pay NO health insurance screaming the loudest, but perhaps those are the employers who should pay more since when they haven’t paid, the rest of us who DO pay insurance have been in effect subsidizing the health of their workforce for some time.

            Overall, I think this goes a long way towards universal coverage, cost control, and basic single payer for everyone. I just don’t know why you have insurance companies involved in the Model T coverage. Other than political.

          • Chana Cox

            In countries where universal health care seems to work best, private insurance companies became involved only after to became clear that government programs NEVER minimize cost or maximize efficiency.  Some checks and balances are needed to make feed-back systems work.  It’s basic control system theory. (but that is another post)  Private insurance companies are not operating on large margins and many are non-profit.  With insurance available from out of state insurers, our state’s private insurance companies will have to compete to keep the business.  Currently, at least at my employer, there were really only two options — Kaiser and Regence.  
            The administrative costs of the Model T insurance would be far lower than our current plans because so much of the administrative superstructure will have been simplified and eliminated and the plan will be lean. This is all predicated on our ability to get out from under a zillion unfunded or partially funded federal mandates and as many pages of administrative rules.    The funding of the Model T would be on a straight income tax — like the current medicare tax although it might be capped at much higher income rates.  It would not be an employer or an employee tax.  Why complicate things with still more bureaucracy?  With no tax benefits to employer provided health care over individually provided health care, many employers will drop out of the health care business.  Some will continue to offer supplemental insurance packages to their employees, but their only justifications for doing so would be because they could negotiate better deals with the insurance companies, or they feel that offering such plans would get them a different sort of employee.  

          • Joseph Cox

            I would add that keeping employers in the loop is a really bad idea. This should apply to everybody – not just the employed. Just like all school kids could get a voucher for education, all citizens/legal aliens should get a voucher for healthcare. This simplified the system greatly.

            I think having insurance companies offer the Model T is a good idea – as it creates some possibility of lowering costs on this level. It’d be great if you could buy Model T coverage that is cheaper than the voucher and get the extra money in your HSA. Insurance company competition is much less effective than services competition, but in this case it is a secondary source of competition (the other being pre-HSA).

  • Is there an option that allows me to use a non-profit to administer my program? Because somehow paying the CEO of United Health Care a BILLION dollars in salary and benefits from 1999 to 2008 seems a tad much.

    Just ensure me a co-op or similar not-for-profit alternative, like a credit union, and maybe I can support this.

    OR, but into universal care, b/c we could cover everybody for exactly what we are already paying. It’s stupid not to (I don’t see anyone creating private water pipes).

    • Joseph Cox

      It is all so incredibly opaque and counter-competitive.

      All that matters in health insurance today is being able to manipulate regulations.

      It is (and it should be) a huge business. Health care – especially provided to foreigners – can be a massive US competitive advantage. It can supply massive numbers of productive jobs on all tiers. But we keep it all bottled up with regulation and a totally counter-market payment system.

      The CEO of United should be able to make lots of money – if he’s actually providing a product that consumers want to buy for themselves. It is just weird that he gets to make it providing a product that third-parties buy for consumers. His earnings are based on massaging the needs of companies, hospitals and governments – not actual living, breathing, consumers.

      • valley person

        I don’t think Rich is suggesting fully socialized, non competitive health care delivery. I think he is suggesting that the insurance aspect of health care, which delivers zero service other than serving as a payment middleman, be turned over to a non-profit (as in switzerland) so he can avoid paying to enrich CEOs. This is a key objection to mandate of Obamacare from the left.

        No one has ever shown any cost savings in having a competitive, for profit health insurance system. The fundamental problem is and has always been that in order for insurance companies to make a profit, they have to limit who gets into the pool by high grading the healthy. This is simply cost shifting, not cost savings. Its 20% of people out there who have serious medical conditions who cost the rest so much money in either insurance or tax support.

        The “private sector” solution to reducing how much that 20% uses up is to make them better “consumers” by giving them a financial incentive to shop around. That can work for some, but not others. The “public sector” solution has been single payer insurance, because this allows the government to establish global budgets and “ration” available procedures.

        Hybrid solutions, like yours and Obamacare, suffer from lots of complexity and difficulty in cost control.   If health care is a public utility, like fire fighting, law enforcement, or water service, why do we need or want a private insurance company between us and the service, especially if it is not (and it clearly isn’t) saving us a nickel? If the issue is “choice,” then make that a choice of actual health care providers, not blasted insurance companies. 

        • Joseph Cox

          I actually think this is a reasonably simple solution. There is no attempt at ‘cost control’ other than defining which services are in Model T and what the voucher will pay. I’ve worked in hybrid public-private government before. ‘Cost control’ is not possible in this environment. It isn’t in public entities either. It is only possible when you have two doors – make lots of money or go out of business. In other words, it is only possible in private business.

          I believe I saw a stat once, that 50% of a person’s total lifetime health care bill was spent in the last 6 months of their lives. It isn’t that some people are costing lots while others aren’t. It is that lots of people are costing lots – at a certain point in their lives. Often, people with major expenses survive – I’m not arguing for rationing here. What I am arguing is that a lifetime HSA allows them to bear this cost even if they aren’t producing income.

          I think the sentence: “The “private sector” solution to reducing how much that 20% uses up is to make them better “consumers” by giving them a financial incentive to shop around.” misses the big point. The big point isn’t to cut use. In fact, I think it’d be great if we all used MORE healthcare.

          The big point is to bring cost innovation into the healthcare world. Right now we basically reward people only for effective medicine. If it increases survival, we use it. If it cuts costs, on the other hand, we just reduce the Medicare payment until profits are just what they were – some marginal %. This discourages providers from providing *cost* innovation. Shopping around can introduce this powerful force – the same force that drives down so many costs in highly innovative fields like mobile phones.

          Check out https://online.wsj.com/article/SB125875892887958111.html for an example of innovation in cost – not just outcomes. It really works.

          • valley person

            Yes, a lot of people “spend” a lot of money on mostly futile health care in the last few months or years of their lives. Absolutely. Which is why making them smart “shoppers” will not work. They are in no position to shop at that point. And their families, often making decisions for them, are not going to be out there bargain hunting or sending grandma to India for her hip replacement.

            Count me as skeptical. No reflexively opposed to your proposal, just skeptical.

          • Joseph Cox

            Introducing efficiency in some areas will result in cost savings in lots of areas. You may not be shopping around in an emergency – but a hospital that has gotten good at being competitive will have all sorts of money saving systems in place developed for non-emergency cases. Look at the Indian heart hospitals. Their costs are low – and their patients aren’t exactly rosy.

          • valley person

            Or doctors and hospitals will try and make up for having to cut costs in some areas by raising costs in less competitive areas, like late stage care.  I’m trying to dismiss your argument on competition in delivery of medical services. I think it has merit. I’m questioning the extent to which it would help, and whether there is any reason to have private insurers as the middlemen. My sense is it would have limited impact on the costs of the big stuff, and there is no good reason for profit taking in the middle. There could be, under your proposal, a market for consultants who closely track provider costs and results, and find ways to sell this data or act as agents for consumers. They would be providing a valuable service.

            All costs in India are lower than in the US for very good reasons. The per capita income in India is $3600, compared to $48000 in the US. So of course they can have lower costs than we can.

          • valley person

            Ooops (to quote Rick Perry). I meant to write I an NOT trying to dismiss your argument. Sorry. 

          • Joseph Cox

            Except they hire doctors from the states and pay them more than we do – they just working them more efficiently. They also buy the same high-cost equipment – they just use it more.

            So, how’s this: health stamps to purchase Model T for the poor or chronically ill – this is similar to food stamps for groceries.

            HSAs – insurance optional – for all others.

            Model T insurance would have a variable deduction based on income. So if you are wealthy you pay more out of pocket – opening up the market for more services.

            Insurance companies aren’t obligated to provide Model T coverage you if you haven’t had continual Model T insurance with a maximum gap of, say, 6 months.

            If you have had continual coverage, then Model T prices are not variable by person. Only top-up plans can be variable.

            This brings the market into more expensive stuff – but only for those who can pay.

          • 3H

            I’ve been doing some reading and as far as I can tell, doctors that move to India take a pay cut.   Not the other way around.   Certainly the cost of living is much cheaper, but do you have a source that shows that doctors in India make more?  Or are those only the doctors that work at the tourist hospitals?

          • valley person

            I doubt they pay them more than here. But even if true, all the other people involved in the operation and post-op would be paid a lot less.

            I’m not rejecting your ideas. I’m just skeptical. And take note you have not got a single response from a  conservative, even though this is supposedly a site for conservatives. That suggests they don’t care about your proposal. They just want Obamacare repealed and then be done with the whole topic. 

        • 3H

          Wait.. while I channel someone……..

          Please don’t take out the private insurance company.  I make six figures and I need to pay for the private tuition for my children.  I work hard every day finding ways to deny coverage so that my company may prosper.  I need my BMW.  Without being the middle man I might have to find a job that helps people, and that will pay less.

          • valley person

            Well done. You have learned from the master.  But please don’t make a career out of it, as the master has done.

          • 3H

            Noooooo….   to become a Master would be to become him (her?).

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