Health Care: Can the GOP prove it still has a soul?
December 4, 2010With Republicans poised to take control of the House of Representatives, there is little doubt that the recently-passed health care bill is up for, shall we say…”discussion.” The fact that Democrats continue to hold the Senate and White House also means that there is no run-away train here when it comes to passing – or repealing – legislation. A ‘divided’ government means that we can have two years of gridlock…or we can have statesmen from both sides of the aisle who actually work together to address the nation’s ills.
Eric Cantor, set to become the new Republican House Majority leader, has suggested in the last few days that the Republican Party, while looking to repeal “Obamacare,” may also offer revisions and additions to the bill rather than just repealing it and walking away. In this statement, there is the faintest glimmer of hope that America could actually end up with a better law.
Tea Party darling (and complete lunatic) Michele Bachmann (R-MN) has already gone on the offense, stating to the Christian News Service,
“…I think there needs to be an insurrection here in Washington, D.C., against our own [Republican] leadership, because that is the message that’s come loud and clear out of this election: a full-scale repudiation and rejection of the federal government takeover of private industry…If we want to replace ["obamacare"] with Obamacare-lite where the government comes in and tries to have interventionist policies, we are going to continue to see failure…”
Bachmann represents everything that has gone wrong with the Republican Party: extremism, ignorance, mean-spiritedness, an elevation of ivory-tower theory over people and reality, and a slash-and-burn, rule-or-ruin style of governance.
For all its flaws, the Democrats got several things very right with the Health Care Bill: A new McClatchy Newspapers/Marist survey found that 68% of respondents favor allowing people under the age of 26 to be covered by their parents’ plans, and 60% want to deny insurance companies the right to turn people down for coverage on the basis of pre-existing conditions. Permitting insurers to refuse coverage for pre-existing conditions is a pocket-lining win for corporate insurance at the expense of struggling families.
The entire theory behind insurance is that everyone goes into the ‘pool’, and those at greater risk are subsidized by ratepayers who pay more than they take from the system.
Seven hundred years ago, ship merchants in the Baltic Sea were besieged by Vikings; they got through that period by pooling their risk and cargoes, thus creating the first known insurance pool (The “Hanseatic League”). Those merchants who were set upon by Vikings were not ‘ruined,’ but rather, participated in the profits of the ships that did successfully reach port. That is the theory behind insurance: sharing the risk increases the chances that all will survive horrible mishaps. When Insurers are permitted to cut off newborn babies born with birth defects, or refuse to cover spouses with crippling diseases, they are throwing the ‘bad risks’ overboard; it is no longer an insurance pool, but a cartel of the healthy for the profit of the insurer.
Contrary to Bachmann’s blind quasi-religious belief in the existence of perfect markets in health care, we must acknowledge that there *is* a problem in terms of affordable access to health care for many Americans. With 10% of the Labor Force out of work, an additional 10% “underemployed,” and youth, stay-at-home parents, part-time workers, the disabled, many immigrants, and the homeless not included in those figures, estimates range from 30 to 50 million Americans living without health insurance. That means somewhere between 10% and 15% of Americans living on the edge of ruin or death at the instance of a single serious mishap or disease. The compassion of a civilized society rejects, “hell, tough on them!” as an acceptable response.
Republicans must be convinced to keep these two provisions of the health care bill, as well as an end to lifetime caps, or suffer the consequences at the ballot box two years hence.
In addition, this is an opportunity to make improvements to the existing bill. Those improvements could include the following:
1) Permit non-profit regional or state groups to form for the purpose of buying health insurance. Sounds simple, isn’t it? But it’s illegal under IRS Rule 501(m). Individuals can *not,* under existing law, form ‘groups’ whose primary purpose is purchasing group health insurance. (Groups may form for business or fraternal purposes, and then choose to buy insurance as an incidental benefit, but they can not form for no other reason than to buy insurance). End this prohibition, let competition ensue, and there will be no need for the single Federal Government Insurance company the Republicans fear.
2) End State-granted Insurance Monopolies. The Federal Government has the authority to regulate Interstate Commerce, and since people may get sick *anywhere* and request their insurer to cover it, this is clearly federal jurisdiction. Blow open the lid on Insurer Competition across state lines.
3) Enact Tort and Medical Malpractice Reform. It was reported 6 years ago that an OB-GYN doctor in Massachusetts has to deliver EIGHTY-FIVE babies just to cover malpractice insurance premiums for a year. Worse, 5% of doctors are responsible for 95% of malpractice claims, raising all doctor’s and hospital’s premiums. Limit Malpractice Awards, raise the negligence standards (so hospitals don’t need to run costly and unnecessary tests), and relieve the 95% of decent doctors from paying the premiums of the 5% convicted of malpractice.
4) Eliminate the FDA’s Efficacy test, especially for terminal patients. Currently, the FDA requires that pharmaceutical companies prove that their drugs meet two tests: they must prove safe, and they must be ‘efficacious,’ that is, they must be proven to cure the condition they claim to address in virtually 100% of patients. This is a costly and inconclusive standard: people react differently to different substances. The peanut butter that fed me through high school will kill someone with an allergy; let *Doctors* decide what to prescribe, with the understanding that the idiosyncrasies of individual patients means that results WILL be different with different drugs. And while we’re at it, permit the medical production, possession, and use of cannabis.
5) Engage in Multi-national agreements with other nations to accept their pharmaceuticals and increase competition. The refusal of the US FDA to permit the importation of Canadian pharmaceuticals is insane. An individual can come to the US from France, or Britain, or Mali, or India, and providing only a driver’s license from their own nation, get behind the wheel of a 6,000 pound rental car and take off minutes after landing - even if they don’t speak English or have never driven on the right side of the road. And yet, if a pharmaceutical company goes through hundreds of thousands of test subjects in Germany, or Britain, or Canada, the results are not considered ‘valid’ in the US. Now, realistically, which is more dangerous: the driver, or a drug produced in Canada?
6) Permit every American to have a Medical Savings Account. Currently, Government workers and some self-employed people can utilize a Medical Savings Account which permits them to cover medical costs using a credit-card-like card. These citizens have a certain amount of money deducted from their paychecks, and go into an account for medical expenses: prescription drugs, eyeglasses, dental work, and even over the counter remedies. These deductions are pre-tax, meaning it lowers the person’s gross income, lowering their tax and even possibly dropping them into a lower tax bracket. Better yet, these workers can ‘borrow’ against future deductions if they incur expenses early in the year at no interest expense. If government workers are allowed these accounts, why not ALL Americans?
7) Repeal DOMA and the Internal Revenue Service Imputed Income provisions. The Internal Revenue Service requires that employers report the value of health insurance benefits provided to non-traditional partners: registered domestic partnerships, civil unions, and some marriages. The value of this ‘benefit’ results in greater employee taxes - often as much as $3,000 annually. This creates a disincentive for employees in the majority of states where thee benefits exist to actually cover their partners…who then go uninsured, or who qualify for taxpayer funded low-income health programs in the states. ALL of these partners can be better served, with better insurance, at no taxpayer expense, if the IRS would stop punishing otherwise economically viable households based on their formal definition of ‘federal marital status.’
conserv-ed
Dec 4, 2010
Get a grip Democrat! Stop whining,kicking and screaming insults…The vote on November 2nd in part was to tell Socialist Democrats like you and in Washington that the “Will of the People” will be heard.
If you don’t listen to America, then who do you listen to Thom?
If you want to come on here and spew more insults at specific Republicans then do not expect a future response that creates dialog. Seems you have a habit of tipping out that has some history of apologies.
Thom Simmons
Dec 5, 2010
As always, a well-reasoned, erudite response showing a clear grasp of the issues raised.
TimothyHorrigan
Dec 5, 2010
It is ironic that the Republicans love to tout themselves as the party of maturity & responsibility while also indulging themselves in childish rhetoric like Conserv-ed’s. Thom took the trouble to write a thoughtful op-ed. Yes, there are many points in it which are controversial, and I am sure Thom fully expected it to be controversial— but Conserv-ed’s inane taunts don’t add anything to the debate. He sounds like a 2nd Grader, and he is not the only one who sounds like that.
Democrats can be obnoxious too, as Thom found out when he ran in a Democratic house primary this summer— but at least they tend to be maturely obnoxious.
conserv-ed
Dec 6, 2010
I see. You both are brilliant we can see that. Like Nancy Pelosi…
Peter
Dec 7, 2010
Thom, if I may quote you;
“The entire theory behind insurance is that “everyone” goes into the ‘pool’, and those at greater risk are subsidized by ratepayers who pay more than they take from the system.”
How do you get “everyone” into the pool? You glossed over the most contensious part of the Healthcare Bill. A Federal Law requiring everyone to purchase health insurance. So do you support a law requiring every citizen to purchase a service from a private company? And if these people don’t, should they pay a fine or tax?
Thom Simmons
Dec 7, 2010
No, and No.
That’s why I support a repeal of IRS rule 501 (m) instead, permitting the establishment of local/regional pools, so ACCESS is possible.
I NEVER support mandatory requirements to purchase anything.
Which makes me, as a Democrat, more in line with most RH folks than Republican Mitt Romney, n’est-ce pas?
Peter
Dec 8, 2010
Wow, there are still Blue Dog Democrats left. You must be unnerved that your party has been taken over by progressives…..Anyway. This is not meant to be an insult.
“Seven hundred years ago, ship merchants in the Baltic Sea were besieged by Vikings; they got through that period by pooling their risk and cargoes, thus creating the first known insurance pool (The “Hanseatic League”). Those merchants who were set upon by Vikings were not ‘ruined,’ but rather, participated in the profits of the ships that did successfully reach port. That is the theory behind insurance: sharing the risk increases the chances that all will survive horrible mishaps.”
What of those Merchants who chose not to participate in the “Hanseatic League”? Should the Merchants who paid for coverage in the pool cover those who chose not to be in the pool, and suffered losses? And shouldn’t thoses Merchants who had more ships, more expensive cargo, and sailed more dangerous routes pay more than those Merchants in the pool who were smaller and sailed safer routes?
The true nature of insurance is assessing risk, then pricing for the potential of a loss. The larger the pool, the more the risk can be spread and lower cost. If an insurance company is not allowed to assess risk, then it is no longer insurance, n’est-ce pas?
Thom Simmons
Dec 8, 2010
Using the Hanseatic league as the model, and answering your questions:
“What of those Merchants who chose not to participate in the “Hanseatic League”? Should the Merchants who paid for coverage in the pool cover those who chose not to be in the pool, and suffered losses?”
No. They didn’t then, and they shouldn’t now.
“And shouldn’t thoses Merchants who had more ships, more expensive cargo, and sailed more dangerous routes pay more than those Merchants in the pool who were smaller and sailed safer routes?”
No. This is precisely what did NOT happen. The merchants of Lubeck were closer to Denmark (and the Viking homeland) than any other merchants, and they actually began the League. Once you start assessing higher rates on those who are in a more perilous position, you almost negate the reason to have the risk pool in the first place: those with low risk don’t need the pool. Provisions permitting insurance companies to refuse coverage to greater risks stacks the deck: the insurance company wins, because thsoe paying into the pool are the ones least likely to draw from it, while those in most need of the pool are prevented from having access. That is preciely what The Hansa attempted to prevent, and precisely why that is one provision of th enew law with which I agree: I am not willing to see the poorest and sickest denied coverage that can easily be absorbed by existing pools.
Yes, the insurance company should assess risk insofar as charging an appropiate premium to all…but the purpose of those premiums should be to cover expenses and pay out claim…not to amass large sums of ‘winnings’ for the insurance company itself while the most vulnerable in society go helpless. In the end, the child with pre-existing conditions and no coverage will bring the parents to ruin - hospital bills are the largest cause of bankruptcy claims in the US - and that means the medical providers get screwed in the end.
I tend to side with patients and providers, at the expense of insurance executives. When push comes to shove, I think most Americans would, too.
Peter
Dec 13, 2010
“Once you start assessing higher rates on those who are in a more perilous position, you almost negate the reason to have the risk pool in the first place: those with low risk don’t need the pool.”
What you described is what the State of New Hampshire DOI did in 1995. The DOI mandated every health insurance company which offered private health insurance accept everyone regardless of health, with no-prexisting conditions.
What happened? Adverse selection. As you said above, those which were low risk chose to not buy health insurance because deductibles went up and premiums doubled. Deductibles in 1994 were as low as $100, but in 1995 with guarrenteed acceptance (I believe SB711) passed the lowest deductible in the private health insurance market went to $1500. Why? No competition. Did the DOI see this coming? Yes. Vermont passed the same law the year before, and all the health insurance companies save two left that state. In 1995, seven health insurance companies testified in hearings that if N.H. passed the same law they would walk as well. Imagine, a company preferring to write no business rather than lose money. After N.H. implemented Guarrenteed Acceptance in 1995, over the next four years 37 health insurance companies left New Hampshire or went out of business. Government intervention at it’s best. And what did we as consumers benefit from our government’s wisdom? Plans that only the very sickest bought, and only those who could afford it. Those who were low risk, as you suggest, went without. To keep premiums affordable, the lower risk must subsidize the higher risk. Otherwise, it’s 1995 all over again.
“one provision of th enew law with which I agree: I am not willing to see the poorest and sickest denied coverage that can easily be absorbed by existing pools. In the end, the child with pre-existing conditions and no coverage will bring the parents to ruin – hospital bills are the largest cause of bankruptcy claims in the US – and that means the medical providers get screwed in the end”
New Hampshire has had plans in place, such as Healthy Kids and the New Hampshire Health Plan (NHHP), which completely invalidate your concern above. HK is free to anyone with lower income, for children ages 0 to 18, and the NHHP for adults offers a subsidized rate for those denied coverage and have lower income. To imply that someone cannot obtain health insurance coverage due to poor health in New Hampshire is blatently false.
Thom Simmons
Dec 13, 2010
So Peter, am I to understand that you favor the NHHP and the Healthy Kids program? For the record?
That wouldmake you quite a bit more progressive than many on the GOP today…and it would make us virtually in agreement.
Keep in mind I was speaking of the national law, not the NH peculiars…but I surely would not disagree with the NH safety net you point out above.
Where I disgaree is you assertion that companies would walk. If this was the national rule, there would be no place to walk to…
New Hampshire
Dec 14, 2010
Horrigan you were discredited long ago. You and Thom should stick with extremist progressive blogs like Blue Hampshire… they’d likely love to have you.
Thom Simmons
Dec 14, 2010
Does anyone else find it intriguing that people like Tim and myself use our real names and attempt to engage in reasonable dialogue, while those who merely seek to lob irrational ad hominem sucker punches all use anonymous aliases?
Peter
Dec 16, 2010
“So Peter, am I to understand that you favor the NHHP and the Healthy Kids program? For the record?”
I favor competition and market transparency, free market solutions with some regulations so there are rules to be played by. I’m in favor of state solutions (NHHP), not Government takeover. Without pricing transparency (cost of services) you will never have competition, hence no pressure to reduce the cost from providers.
One other way to reduce the costs of healthcare is thru Government Healthcare. The Government in it’s infinate wisdom could dictate pricing, as it does in Medicare, and who gets what services when. For instance,the government could simply tell all hospitals that the MRI charge of $2500 will be reduced to $1250. Voila, all fixed! Or maybe not. Doctors and hospitals are dropping Medicare patients. The Mayo Clinic as of January 1st, 2010 no longer accepts Medicare!
I suppose at that point the government could order hospitals and doctors to take the lower reinbursement rate, just as you suggest they order all health insurance companies to accept everyone regardless, even the sickest of the sick. This is naive. If the government dictates pricing, hospitals will close, and waiting lines will extend for months. Any possibility of a free market will end. But this was the purpose of Obamacare, it’s a lose lose senario for the free market, as it does nothing to reduce cost. Single payor has always been the objective. The only reason Medicare utilization is as widespread as it is today is because of cost shifting to Private Health Insurance Plans. When the Private Plans are gone, then what? And the Doctor Fix was not included in Obamacare because Obama needed to say this will not cost us a dime. A 300 billion dollar Medicare fix, not put in the bill because it is unfunded! How cynical!
“I tend to side with patients and providers, at the expense of insurance executives.”
This is a talking point from the left.
How much is rotator cuff surgery? Shhhh, it’s a secret. Next time you go shopping, imagine there are no prices, and the surprise is at the register. You would say, I wouldn’t have selected this had I known the price!
This is happening on the provider side as we speak. UMass lab is running $100 swab tests and charging Anthem BCBS $4300. The President of UMass lab is selecting “models” to run bullcarts at 22 malls in New England, to pursue mall patrons, especially men, for mouth swab test to determine if someone is suitible as a bone marrow donor. This is a scam, and is being investigated. UMass lab has collected over 4 million dollars from insurance companies for this “service”. And I have news for you, overcharging, cost shifting, mis-billing is prevelent on the provider side…this is where the fat is. Ask any doctor or nurse.
Our friends, the insurance companies, were told they would be attacked during the Obamacare hearings but to keep their mouths shut because the government would give them 30 million new customers. The insurance companies oblidged on being the villan. But their profits average 3% of every healthcare dollar spent, so what of the other 97%? To attack the insurance companies for the high cost of healthcare is a clever deception, but after the insurance companies can’t lower the cost because they are not the driver of cost, then the government promised “Public Option” will be introduced.
This is inevitable.
“Where I disgaree is you assertion that companies would walk. If this was the national rule, there would be no place to walk to…”
You may disagree, but it does not change the fact that you cannot force a company to lose money and stay open for business. INSURANCE COMPANIES WILL LEAVE THE MARKET!. Don’t believe me, it’s already happening. Celtic has left the New Hampshire market due to mandated child coverage. Harvard Pilgrim and Cigna announced they are out of the Medicare Advantage market. Provident Mutual announced they are out of the health insurance business after 60 years. Assurant Health, in business since 1892 is in discussions to get out of health insurance and sell supplements like AFLAC. How incredibly naive (or ignorant) to say they have nowhere to walk to. Did you read my previous post? Currently there are around 1300 health insurance companies nationally. Due to economies of scale, I bet this number will be whittled down to a dozen within 10 years if Obamacare is allowed to stand.
The #1 problem with healthcare is lack of transparency, no one knows the cost of services. Until the consumer is involved in the decision process (i.e. more out-of-pocket and rewards), given the tools to know the pricing and quality of services, and makes choices with this knowlege, there will be no advancement in lowering the cost of healthcare. By the way, there is a major first step that already exists in the market. But only 5% of consumers are using it.
Before you respond to this, please read about the jumpers and dumpers in MA. and how this fits in with your healthcare solutions for this country.