The following was written prior to enactment of PPACA by the United States Congress. Whether or not the present healthcare law (sometimes referred to as ObamaCare) is fully implemented will be decided by the United States Supreme Court, as many states have filed challenges to the Act. The opinion expressed is that of the writer and not the Association.
Current Plans being proposed still give too much control of healthcare to the Insurers and are therefore not competitive enough. The Government is on the path to insolvency on Medicare, and therefore has a huge credibility gap when it offers to solve the problem with a government insurance plan. The following addresses both issues.
National Health Insurance Plan Proposal
There can be a uniquely American Health Care plan that will combine the innovative engine of competition with the moral requirement of universal coverage.
It will be an example of “Capitalism with a Heart”. In addition, it will bring money into Medicare now, helping to stave off the impending crisis there. Lastly, it will lower current health care premiums making them much more affordable.
In addition to lowering premiums for the average person and family, it will do away with black – listing for preexisting conditions. Insurers will still have a major role; but they will now be truly competitive and not the de facto monopoly they currently are. It will even make Medical Savings accounts a viable option, which they currently are not. This will play well on the “Right Side” of the aisle.
It will eliminate the need for a separate health system for the poor and, over time, will allow the Medicare age to be raised for healthy septua/octo – genarians. Aside from the immediate large current infusion of cash into Medicare, over time, by being able to affordably raise the Medicare age, it can lead to long term stability of that important program.
If in a calendar year a person has in excess of $100,000 in medical expense they are transferred over to Medicare, regardless of age.
The remainder of the citizenry is able to choose from a competitive insurance market, which is essentially selling $100,000 “Term” health insurance policies.
The Cost – Tax and Premium Expense
A Medicare tax would be applied that would be at about 60 per cent of the average health insurance cost in this country, broken down by age. Example, currently for a family of four at age 50 the Premium would be approximately $13,000 a year. Instead of paying this, they would pay $7800 into Medicare. This would go directly into the Medicare pool creating a huge influx of money well in advance of actual paying out. For their private insurance, the cost would be in the $1000 to 3000 range based on the deductible. Total cost of policy would go from approximately $13,000 to $8800 – 10,800.
The Effect on Private Insurance
No preexisting condition restriction. Their maximum exposure is such that Insurance Companies can afford to do this without restrictions.
The Insurers can offer a competitive product mix from “Dollar One” coverage to a $10,000 deductible. This will lead to real competition on price with resultant affordability. The customers would have true choice, unlike the current situation where any prior claim or just getting older greatly favors the Insurance Company.
Medical Savings accounts will work in this environment, with self – insurance being an option for some citizens.
Company self insurance would be a viable option again.
These much less expensive insurance options could be purchased by the state for their Medicaid patients and end this expensive, poorly functioning, duplicative system.
Private insurers will have a role and many of jobs in the Insurance Sector would remain which would be a positive for the economy. It is important for them to be part of the solution as in this system, they will provide the competitive fuel to make healthcare better.
The effect on Medicare
The age of Medicare could be immediately raised to 66 or even 67, which will further increase its solvency. Over time, the system would be offering affordable private health insurance for patients into their 80’s and there would be no need to enter Medicare until the health costs justify it; or the actuarial data is such that there is an age that could be generally agreed upon. The current age of 65 is because these patients become uninsurable, not due to their usual costs, but due to the possibility of extraordinary cost.
Medicare, over time, with the gradual roll back of the Medicare starting age, saves Billions of dollars on relatively small expense items such as routine office visits, emergency room visits, hip fractures, lab tests, mammograms, vaccinations, colonoscope’s, routine urinary infections, gastroenteritis, upper respiratory infections that it currently pays for in otherwise health elderly patients. Medicare will also get a large cash infusion up front, which will help with current solvency issues.
For those who feel that they are being cheated as they had already paid into Medicare, vouchers could be provided to pay for the private insurance. Medicare would still be way ahead. In addition, with the shared sacrifice environment we all face now, many would be willing to do their share as long as private insurance is affordable and they have the means.
Lastly, competitively priced major medical plans could be purchased by those people who want coverage for things Medicare does not cover.
The Economy of Scale in “Owning Diseases”
Medicare would eventually “own” all the serious illnesses. Tremendous savings will result. They could buy drugs at much better cost for their patients. Medicare could insist on centers of excellence for things such as Organ Transplants that have enough volume and have costs scrutinized for fairness so we have both high quality and efficiency. They Government would also be able to enroll patients in clinical trials when effective treatments are not available. Currently, such patients, mainly with cancer, will accept treatments that have no evidence of effectiveness due to the difficulty one has in giving up. In this system, those patients would not get the therapy, unless they were willing to pay out of pocket, or had a preexisting supplemental policy for such a situation. If, however, Medicare had a clinical trial for their illness, they could enroll for free.
This does not exhaust the list of benefits one would find in this simple system. Current proposals will not resolve cost issues and will ultimately break the bank. Copying the British, Canadian, German, Australian or any mix of the many socialized solutions has been resisted for a reason; we can and should do better. Real competition and true compassion will lead to a cost effective, innovative and uniquely American solution.
Dr. Kim Meyers, F.A.C.P.
Past Chair, Soreng, Solis Chair of Medical Informatics
Senior Attending in Medicine Evanston Hospital
Assistant Clinical Professor Northwestern University
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