Archive for Sunday, October 14, 2007

Health insurance shift is gaining support

October 14, 2007


— As the United States prepares for the next great debate on its ailing health care system, support is growing for a shift from the traditional employer-based financing to publicly subsidized individual health insurance.

A measure co-sponsored by Democratic Sen. Ron Wyden of Oregon and Republican Sen. Robert Bennett of Utah to convert to such a system has attracted a total of nine sponsors. Last week, presidential candidate John McCain introduced a variant that is a partial step in that direction.

And this week the Committee for Economic Development (CED), a high-powered business group, will give a strong push to the idea with a report saying in blunt terms that business can no longer afford to pay the rising costs and lacks the clout to curb the forces that are driving health care inflation.

Instead, the report calls on government to restructure the private insurance market in less rigid form than Hillary Clinton proposed 14 years ago - and then step back and let competitive market forces do their invaluable work of forcing recalcitrant insurers, doctors and hospitals to bid against each other on the basis of price and quality.

Five years ago, the CED laid out a strategy for business to curb rising health care costs while continuing to subsidize workers' policies and helping cover the costs of the uninsured. Now, it acknowledges that strategy has not worked.

"The U.S. employer-based health insurance system is failing," the report says. "Fewer American workers have insurance now than did seven years ago and fewer American firms are offering insurance now than did then. ... The competitiveness of American firms is threatened by the cost of health insurance. Public budgets at every level are eroded by the costs of health care, including costs that previously were paid by employers. ... We believe that our health-insurance system is in crisis, and needs immediate attention to stop steady erosion that may become sharp, quantum deterioration."

The report, bearing the imprint of Alain Enthoven, the eminent Stanford health guru, and Joseph Minarik, the CED's director of research, devotes page after page to discounting a wide variety of what it terms "Band-Aid" approaches. They range from Newt Gingrich's favorite - the introduction of high-tech computers to medical practices - to the Bush administration's "consumer-directed health plans with medical savings accounts," to the liberal Democratic solution of "Medicare for all" or single-payer plans.

Instead, it outlines a two-step solution, aimed at producing a competitive marketplace with broad individual choices.

First, the federal government would establish independent regional "exchanges" through which individuals would purchase one of many competing private insurance plans. The exchanges would set standards for the insurers, and each year conduct an "open season" when purchasers could change insurers. The exchanges would manage risk-adjustments for insurers, but no one could be denied coverage because of age or prior illness.

Second, every family would receive a fixed-dollar credit, sufficient to pay the premium on the basic, low-cost plan in its region, so it could be insured without cost to the family budget. Any higher-cost policy would be paid by individuals with after-tax dollars.

The current tax credit for employer-financed health care would end (along with the company obligation to insure its workers), and that saving, plus some form of broad-based tax either on payrolls or income or on purchases, would finance the universal insurance payments.

The Congressional Budget Office has estimated that the Wyden-Bennett plan, which is the closest parallel, would actually save the nation $336 billion during the next 10 years from the current estimated expenditure - because of the economies possible in a restructured, competitive marketplace.

Plans similar to the one CED has endorsed are already in place - and working well - at Hewlett Packard, Wells Fargo, the University of California, Stanford, and for state employees in Wisconsin, Washington and California. The Federal Employees Health Benefits Plan, which covers members of Congress, has a somewhat similar structure.

None of the leading presidential candidates has yet endorsed fully a shift away from employer-financed health care, though several have called for credits to individuals or tax deductibility for individual insurance.

Converting to such a system would be controversial. Insurers and some of the players in the health system would probably object. But the growing sense in business that only a mass marketplace of individuals can apply the competitive pressure needed to discipline the forces of medical inflation is moving the country in that direction.

It should be at the center of the coming health care debate.

- David Broder is a columnist for Washington Post Writers Group.


Richard Heckler 10 years, 6 months ago

National Health Insurance is best for taxpayers and the economy. The plan Broder exposes still is catering the one of the most powerful lobby's in D.C. and further supports special interest money in the system.

Currently, about 64% of our health care system is financed by public money: federal and state taxes, property taxes and tax subsidies. These funds pay for Medicare, Medicaid, the VA, coverage for public employees (including teachers), elected officials, military personnel, etc ( McCain and his pals love you and I paying the premiums for them and their families for the rest of their lives....yes as part of their retirement.)

The United States spends more than twice as much on health care as the average of other developed nations, all of which boast universal coverage. Yet over 46 million Americans have no health insurance whatsoever, and most others are underinsured, in the sense that they lack adequate coverage for all contingencies (e.g., long-term care and prescription drug costs).

Why is the U. S. so different? The short answer is that we alone treat health care as a commodity distributed according to the ability to pay, rather than as a social service to be distributed according to medical need. In our market-driven system, investor-owned firms compete not so much by increasing quality or lowering costs, but by avoiding unprofitable patients and shifting costs back to patients or to other payers. This creates the paradox of a health care system based on avoiding the sick. It generates huge administrative costs, which, along with profits, divert resources from clinical care to the demands of business. In addition, burgeoning satellite businesses, such as consulting firms and marketing companies, consume an increasing fraction of the health care dollar.

We endorse a fundamental change in America's health care - the creation of a comprehensive National Health Insurance (NHI) Program. Such a program - which in essence would be an expanded and improved version of Medicare - would cover every American for all necessary medical care. Most hospitals and clinics would remain privately owned and operated, receiving a budget from the NHI to cover all operating costs. Investor-owned facilities would be converted to not-for-profit status, and their former owners compensated for past investments. Physicians could continue to practice on a fee-for-service basis, or receive salaries from group practices, hospitals or clinics. more:

kansas778 10 years, 6 months ago

"The United States spends more than twice as much on health care as the average of other developed nations, all of which boast universal coverage. Yet over 46 million Americans have no health insurance whatsoever," First of all, the 46 million without health insurance includes 10 million illegal immigrants, which while they count towards the population, they are not Americans. Anyways, another reason why the American system is different is that we are a much larger nation than most other developed nations. France and Germany have around 60 million people, Canada has like 22 people, but the US is around 300 million, which changes the situation significantly. Are there any comparably sized nations that have a similar system to what you are proposing?

Richard Heckler 10 years, 6 months ago

It's all relative. If 64% of medical coverage is funded by tax dollars there is no reason why 36% more could not be funded to cover 100% of medical care thus everyone has the same coverage as our elected officials. The system is in place which eliminates reinventing the wheel. All humans receive a medicare card. The cost is covered by consolidating all funds under one umbrella thus reducing admin costs as well which adds more to the pie. Over 300 umbrellas is not efficient cost of healthcare.

Healthcare should not be a matter of who can or cannot pay.

Currently, the U.S. health care system is outrageously expensive, yet inadequate. Despite spending more than twice as much as the rest of the industrialized nations ($7,129 per capita), the United States performs poorly in comparison on major health indicators such as life expectancy, infant mortality and immunization rates. Moreover, the other advanced nations provide comprehensive coverage to their entire populations, while the U.S. leaves 46 million completely uninsured and millions more inadequately covered.

The reason we spend more and get less than the rest of the world is because we have a patchwork system of for-profit payers. Private insurers necessarily waste health dollars on things that have nothing to do with care: overhead, underwriting, billing, sales and marketing departments as well as huge profits and exorbitant executive pay. Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy. Combined, this needless administration consumes one-third (31 percent) of Americans' health dollars.

Single-payer financing is the only way to recapture this wasted money. The potential savings on paperwork, more than $350 billion per year, are enough to provide comprehensive coverage to everyone without paying any more than we already do.

Under a single-payer system, all Americans would be covered for all medically necessary services, including: doctor, hospital, long-term care, mental health, dental, vision, prescription drug and medical supply costs. Patients would regain free choice of doctor and hospital, and doctors would regain autonomy over patient care.

just_another_bozo_on_this_bus 10 years, 6 months ago

The relative sizes of these countries is absolutely irrelevant.

And even if the 46 million uninsured includes undocumented workers, it's also irrelevant. Those folks are here because the "economy" wants exploitable workers, and health insurance is just one more expense that can be avoided by those looking to exploit them.

kansas778 10 years, 6 months ago

"The relative sizes of these countries is absolutely irrelevant." "And even if the 46 million uninsured includes undocumented workers, it's also irrelevant." Again, more conclusions without reasoning. just_another_bigot you really need to work on this.

Oracle_of_Rhode 10 years, 6 months ago

Single-payer health care is the only way to go. Nobody should profit from the misfortune and illness of others. Here's a description of the single-payer health care solution...

just_another_bozo_on_this_bus 10 years, 6 months ago

"Again, more conclusions without reasoning."

You're the one who threw out the conclusions without reasoning. I merely pointed out your normal lack of reasoning.

kansas778 10 years, 6 months ago

just_another_bigot--umm, I threw out a fact, that the 46 million number includes non-citizens, another fact, that the US has a much larger population then the other countries--that I know of--that have a similar health care system the one being proposed by Merrill, and a question: are there any countries as big as the US with such a health care system. No conclusions dummy.

just_another_bozo_on_this_bus 10 years, 6 months ago

"I threw out a fact, that the 46 million number includes non-citizens,"

Does it really? Got a link? And even it it is a "fact," that leaves 36 million citizens with no health insurance. Hardly a triviality.

"Anyways, another reason why the American system is different is that we are a much larger nation than most other developed nations."

Sounds like a conclusion to me.

kansas778 10 years, 6 months ago

just_another_bigot, facts require evidence or sources, not reasoning. It is a fact that America has a larger population than France, Germany, and Canada (combined at that). And yes, I do have a link to show that there are almost 10 million non-citizens included in that number, and also 8.3 million uninsured people who make between $50,000 and $74,999 per year and 8.74 million who make more than $75,000 a year Not to mention that of the 46 million uninsured, only 21-31 million are long-term uninsured. So, while some of these categories overlap, roughly 3% of the population are long-term uninsured citizens who couldn't otherwise afford it. Also, and no one seems to be able to answer this, but an even smaller % of those people actually have health care needs that are not being met, as they are either young and healthy, or only have small health care costs. So yes, it is a triviality.

just_another_bozo_on_this_bus 10 years, 6 months ago

Intersting data, K778, but your gross misreading of them explains a lot about how you arrive at your mostly erroneous notions about the world.

kansas778 10 years, 6 months ago

just_another_bigot, do you have any reasons whatsoever for what you believe? Or do you just like being on the side that "feels" right to you? Again you have a conclusion without any reasoning or support. Why why why? Quit being so lazy in your posts. How old are you that you think that "nah-uh, YOU'RE wrong" is an appropriate argument?

just_another_bozo_on_this_bus 10 years, 6 months ago

Well, for starters, you first said that the number of uninsured included 10 million "illegal immigrants." Your link does show 10 million "non-citizens," but that is very different from "illegal immigrants."

You also state that there are "8.3 million uninsured people who make between $50,000 and $74,999 per year and 8.74 million who make more than $75,000 a year," but those are household incomes, and not individual incomes. Those households can have one person or multiple people. I'm not sure what point you are trying to make by throwing out that number, but the reasons these people don't have insurance are likely quite varied, and I suspect that for most of them it isn't just a matter of "choice." A more useful statistic is that the higher the income, the more likely it is that you'll have insurance. For households with incomes greater than $75,000, 91.5% have insurance.

"Not to mention that of the 46 million uninsured, only 21-31 million are long-term uninsured."

You want to focus on the "only" 21-31 million who are long-term uninsured, as if that's somehow a good thing, implying that the other 15-25 million are not a problem at all. But this is just a snapshot, and doesn't indicate that there are millions more who might now have some insurance, but are among those who either just cycled out of the uninsured category, or will cycle into it soon. In other words, in addition to the 46 milion with no insurance, there is easily an equal number who have inadequate insurance, or are at risk of losing it altogether.

Regardless of what your philosophy is on how health care is provided, the current system in this country is badly broken, and there are many examples of "socialized" systems that are doing a much better job than the private, for-profit system in the country does.

Richard Heckler 10 years, 6 months ago

It ten million of the uninsured are " illegal immigrants" they still need healthcare which is another excellent point in favor of National Health Insurance....the clinic gets paid for its' services.

Maybe the person making $75,000 has a lot of cancer bills that insurance quit paying therefore can no longer afford insurance. What's missing are the reasons why?

A lot of the insured apparently have policies that might be worthless for serious long term care such as cancer in which case this group may be better off paying out of pocket for their medical care.

I'm more than ready for my tax dollars to fund medical care. I am more than ready to cut off the taxpayer bail outs of corporate america for mismanagement of business affairs such as obscene CEO salaries while the business is going down the tubes.

National Health Insurance has the potential of paying back in the form of new economic growth aka new jobs. Toyota would open another plant in the USA instead of Canada perhaps...yep Canada got the most recent new Toyota plant because of Universal Health Care.

kansas778 10 years, 6 months ago

Everyone brings out this 46 million people figure to say: see, look how many people are going without. So the millions of people who are uninsured who live in households that make $50,000 + are going without, but could easily afford insurance. That only 21-31 million are long-term uninsured is imporant because the short-term uninsured should not be counted either. People switch jobs, people lose their insurance and buy new insurance etc. all the time. It is not a serious problem that some people are without insurance for a few months. Being non-citizens means you dont get the benefits of a citizen, and they shouldn't be counted either. So there are three groups that should not be included. We should not have to pay for health insurance for people who could afford it themselves, we should not have to pay for health insurance for people who will get it again in a few months, we should not have to pay for health insurance for people who are not citizens of this country. Not only that, the consequences of not having health insurance in America are not severe. People without health insurance can still get treatment, and if they cannot pay, they can seek protection from the hospital through bankruptcy. So really what you are asking us to do is pay for other people's health insurance so that they can avoid going bankrupt.

just_another_bozo_on_this_bus 10 years, 6 months ago

"So the millions of people who are uninsured who live in households that make $50,000 + are going without, but could easily afford insurance."

See, there you go again. Making baseless assumptions, and then rambling on and on as if you had the slightest clue of what you are talking about.

kansas778 10 years, 6 months ago

haha, you are too much. As if someone making $50,000 a year can't afford health insurance. I got some quotes online for a family of four. Prices ranged from $2100-$7500 a year. Of course that is an assumption that the average household has four people. Actually the average household has only 2.5 people, so really that price tag should be adjusted down. But regardles, what the hell are people making $50,000 a year spending on that they can't afford $2100-$7500? But I guess it's just a baseless assumption to think that a family with an above average household income could afford basic health insurance. Especially when millions of people with below average household incomes have health insurance.

just_another_bozo_on_this_bus 10 years, 6 months ago

"Actually the average household has only 2.5 people, so really that price tag should be adjusted down."

That's largely irrelevant. What would be relevant is the average size of those families who don't have health insurance.

" But regardles, what the hell are people making $50,000 a year spending on that they can't afford $2100-$7500?"

Unlike you, I don't claim to know what these people I've never met are spending their money on. But I would venture an educated guess that among the many things they may be paying for are already huge medical bills that the insurance they used to have didn't cover, and new medical expenses that have to come out of pocket because no insurance company will cover them. If you are unaware of that all-too-common circumstance, it fits well with your well-demonstrated (willful?) ignorance on a lot of topics.

guesswho 10 years, 6 months ago

We are the only developed country in the world without some sort of national health system. Posters above are quibbling about is it 36 million or 46 million. Either way, it is a pretty grim number. Why do we take for granted certain public goods, like police, firefighters, and public schools. but not a basic level of health care? Granted, we cannot cover every single treatment option for every single disease, but there should be some floor of care. I know many people who hate their jobs, but can't switch because they cannot be without health insurance. Part of the problem is our individual 'pull you up by your bootstraps' mentality, such as, hey, why can't you afford to pay health insurance for your family if you are making x amount of money? I can't answer that for every person, but the fact is, most people don't have that disposable income when the mortgage payment needs to be made. And, people don't want to have to pay for something (health care premium) that they hope to not use. Health care is unique in its uncertainty - i.e., we don't want to have to use it. But, a major medical illness/event comes up and, bam, bankruptcy can loom. That affects our entire society, not just the family. We have lots of 'government-run' health systems in this country - I'm not saying they are all the best but here are some: on the federal level there is Medicare (over 65 years plus certain qualified disabled persons), our elected officials, Native Americans, veterans, US military. And, there is Medicaid which is roughly 60/40 federal/state provides health insurance for poor people, either elderly in nursing home care or poor pregnant women/children - but not poor men. Some federal grants (SCHIP) provides block grants for states to cover children - who are the cheapest to insure but seems to have a lot of resistence on 'entitlement' issues. That's a pretty piecemeal approach to providing healthcare, leaving out persons we assume 'should' be working - but cannot get employer-based health care coverage. Fact is, for small businesses, their cost of health care for their employees is also too great. [Let me know if you want actuarial reasons for that.]

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