HealthCare Revisited

Due to some interesting discussions lately, I'm inspired to post another healthcare thing. It kind of started with the statement,

"the American government's health care system is disgusting and vile. A country should take care of it's people better than that." - Penny from Canada

It's given me pause to think about the whole issue once again.

The key message above includes the assumption that it's the natural duty of a government to "take care of its people". It goes to the heart of what our country's all about, and the whole question of just what do we expect from our government. Canada's like most of Europe in that they are unabashed socialists. And of course, socialists believe the government's very reason for existence is to take care of its people. In general, the Americans that believe that are Democrats. For some, the government is just a benevolent entity that has unlimited resources to take care of its citizens. For others, it's the means of leveling out society so that nobody gets to be rich and nobody is allowed to be poor, because they believe in taking from those who have money and giving it to those who don't, whether they deserve it or not.

Aside from the politics, what about the American healthcare system? Is it the best in the world or "disgusting and vile"? Given the fact of my many years in HR consulting, which includes setting up Benefit Plans and Employee Enrollments for many companies, I think that gives me some license to pontificate on the subject.

American healthcare is the best in the world for those with the means to access it fully. Hands down. Anyone with unlimited resources or a great health insurance plan can get the best care on the planet. The problem exists for those who don't have either.

And it's not fair to say the government isn't trying to help. Penny in Canada may have never heard of Medicare or Medicaid, but everybody in America surely knows about these programs. Medicare covers our elderly, while Medicaid covers the poor and indigent. And as far as I have observed, both programs are addressing the needs of both groups, for the most part. Yes, you can start the prescription drug argument and be right, but our poor and elderly are overall well cared-for.

So who's falling through the cracks? Basically everyone else who's not rich but not poor, under 65, and not covered by an employer-sponsored health plan. The number of people in this category is increasing dramatically, and I'm one of them.

The average lower-to-middle-class family that isn't covered by an employer is effectively shut out of health coverage.

Here's why:
1. They can't afford COBRA. COBRA's required by law, and must be offered to employees who leave their company for up to 18 months. By then, they should be eligible for benefits with their new employer, even with pre-existing conditions. Sounds like a good idea, right? Yes, in fact it initially worked very well. But it doesn't work anymore because the premiums have effectively shut most working people out. My specific example - when I left my employer, the COBRA rate for covering my family was about $1,000 per month. How many people on average incomes can afford that? Actual costs for covering a typical family hover right around that range - the company I'm currently consulting with has a self-insured medical program with a rider for catastrophic costs, which they're budgeting very close to that $1,000 per month for every employee who signs up for the plan. Next year it could easily rise to $1,200.
2. Pre-Existing Conditions. Have a bit of asthma? A little overweight? Blood pressure a little above average? Ever had surgery for anything? Sorry, you're too high a risk for private insurers. They won't insure you at any price.
3. Choice. At current premium costs, even if they could access insurance and scrape together enough to keep current, it's such a high cost that people choose to roll the dice and go without.

But does this mean those people are denied care if they need it? Perhaps if they're too far behind on payments to their physician, he may turn them away unless they catch up on their unpaid bills. But generally, if someone requires emergency treatment for a life-threatening illness or injury, they will receive it. They also will be held liable for all of the related bills from Doctors, Hospitals, Medicines, Equipment, Ambulance Services, etc.

So what happens to the uninsured if they have a catastrophic illness or injury? They go bankrupt. Then at least the patient will qualify for Medicaid. Guess what that means. Right, the differerence gets passed on to everyone else in higher premiums. Medicare's already in the red, and Medicaid is bankrupting most states right now. And employer premiums continue to rise between 10 and 30 percent annually.

Sounds bad? It is bad. But what can be done?

Some say the government should step in and make sure everyone is covered. Institute socialized medicine. Eliminate evil private insurers that won't insure anyone but the healthiest and arbitrarily deny or delay needed treatments and surgeries. Expand Medicare to cover every citizen. It's Bill & Hillary's national health plan. Opponents say it will stifle innovation, lead to rationed care, and decimate the quality of care. Which is true, but to what degree is difficult to predict.

My ideas, which I outlined in an earlier blog, are these:

Let employers continue to purchase insurance privately as they do now; in fact, make sure they are incented to do so. Because the more people are insured through private plans, the less burden on the public plans.

Open government-sponsored clinics for the uninsured that charge whatever the patient is able to pay. In rural areas, the government could provide subsidies to help defray the costs.
Expand health savings accounts that let people put aside pre-tax dollars to use for medical expenses as they see fit. It's a great program already that should be expanded, but it's not the only solution.

Tort reform, of course. There still needs to be legal redress for true malpractice, but the junk lawsuits are ruining it for those who have legitimate claims.

Create a federally-sponsored insurance program for everyone that isn't already covered through a private plan with premiums indexed to income. I'd replace Medicaid with this sort of program. It would essentially be a gigantic group open to everyone in the country who needs coverage, but nobody gets it for free. There would be a premium directly tied to the individual family's income. If it's only $10 per month for a family in extreme poverty, so be it. Maybe it's up to $1,000 a month for those who can afford it but got turned down by the private insurers. And there can be different plan options, with lower or higher premiums based on the level of deductible or type of coverage elected, just like private plans offer today.

It's still socialized medicine? Yes, but it's socialized medicine with choice. People could still choose to remain uninsured, but they're rolling the dice on possible bankruptcy if they are hit with a catastrophic illness or injury down the road. And although I can't run numbers on what it would cost, I have to believe the total cost would be less than the current system.

Unfortunately, I can't make it happen, and there aren't any politicians who want to stay in office with the courage to champion the idea. Too many lobbyists paying them too much money will make sure the status quo stays in place.