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Great Ideas about Health Care Reform

bill — Sat, 03 Apr 2010 13:23:15 +0000

My boss and I came to same realization on Friday. We would be more in favor of the individual mandate if the Federal government required everyone to buy one of our products, too. We are hurting just like the hospitals. Hospitals have un-insured patients and we have dead beat customers. Why can’t we get a piece of this mandate pie?

Here is a great idea that will help balance the budget. Instead of paying tax refunds in cash, they should give out GM or Chrysler rebates. This is definite step up from California’s IOU idea.

Don’t fret that the health care bill is doomed to failure but take pride that “politics as usual” has brought us in full circle to our fore fathers predicament, “Does too much federal power corrupt absolutely?”

Being a state official responsible for finding the funding for an expanded Medicaid system is just part of the job description, vassal for Washington.

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Confessions of a Health Insurance Scofflaw

bill — Sun, 28 Mar 2010 14:01:32 +0000

Back in 2000 when I moved from Texas to Ohio I was given the opportunity to buy health insurance at what I thought was an exorbitant price of $350 per month. I declined. On Friday I commented on a post that about the insurance mandate that the insurance mandate is very expensive option for me for what I consider to be a hospital billing problem. Today I calculated about how much I saved by not having health insurance or having a low cost high deductable plan. Just for the health insurance premiums alone I would have spent $52,970. I used this slide from the Kaiser Family Foundation and its 131% increase to estimate my health insurance premium increases. This looks like a pretty conservative number since it assumes I can get a comparable low deductible policy today for $457 per month. From Quicken I can say that my medical and dental costs over this time period was about $37,900. Based on my ten year experience you can save a lot of money by being a savvy health care buyer.

Yesterday Ann Althouse and Les Jones both commented on an interview in the Wall Street Journal with the Nobel economist, Gary Becker. They focused on his comment:

Here in the United States,” Mr. Becker says, “we spend about 17% of our GDP on health care, but out-of-pocket expenses make up only about 12% of total health-care spending. In Switzerland, where they spend only 11% of GDP on health care, their out-of-pocket expenses equal about 31% of total spending. The difference between 12% and 31% is huge. Once people begin spending substantial sums from their own pockets, they become willing to shop around. Ordinary market incentives begin to operate. A good bill would have encouraged that.

Although I agree with that statement I am most concerned about the following statement in the article since it links a bad health care policy with aggravating our current economic malaise. The next logical step for people frustrated with the current health care policy is to “game the system” and watch the legislators fumble around trying to explain how the policy is actually working quite well. Already we are seeing several unintended consequences such as, “AT&T Sees $1 Billion Charge Tied to Health”. There is definitely some passive-aggressive behavior going on here. You might call this scenario the sequel to “Jobs saved or created”.

Bad legislation, maintained by self-seeking interest groups. Back in 1982, I remind Mr. Becker, the economist Mancur Olson published a book, "The Rise and Decline of Nations," predicting just that trend. Over time, Olson argued, interest groups would form to press for policies that would almost invariably prove protectionist, redistributive or antitechnological. Policies, in a word, that would inhibit economic growth. Yet since the benefits of such policies would accrue directly to interest groups while the costs would be spread across the entire population, very little opposition to such self-seeking would ever develop. Interest groups—and bad policies—would proliferate, and the nation would stagnate.

Gary Becker: ‘Basically an Optimist’—Still
Sat, 27 Mar 2010 03:48:35 GMT

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The Long, Painful Road to Austerity

bill — Mon, 22 Mar 2010 11:42:36 +0000

Despite the drama about the health care debate the country continues down its path to austerity. The only way we can get off the path is if the economy shows a robust, vigorous recovery of permanent employment and consumer spending. The states, counties, and cities desperately need more tax revenue. It is not surprising that this week Arizona’s governor signed a budget-balancing bill that cuts benefits immediately and threatens to cut even more benefits if a sale tax increase is not approved. Like most states Arizona has been trying to develop a budget to deal with the shortfall in tax revenue. It is ironic that one of the major spending cuts is a $385 million cut in the state’s Medicaid program. For many states the growth in Medicaid has become too large a burden for a weak economy. When it comes down to laying off teachers, police men, or cutting Medicaid, Medicaid is going to get cut. Many states view the Medicaid expansion as an unfunded mandate. So Congress votes to expand Medicaid coverage and Arizona cuts it.

Governor signs Arizona budget-balancing bills

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The No-Cost Path to Cheaper Health Care

bill — Fri, 06 Nov 2009 12:07:10 +0000

Republicans are offering common-sense reforms that would lower costs.

Naturally I like the plan as explained in this Wall Street Journal article, The No-Cost Path to Cheaper Health Care, by Mr. Shadegg, a Congressman from Arizona. As a person who buys his own health insurance with money from a HRA I have at work, I am familiar with his proposals. Buying medical insurance is about as complicated as buying auto insurance. I went to http://www.ehealthinsurance.com/ and picked the insurance that met my needs from the available health plans. So for me the Republican plan is easy to understand, simple to implement, and has a real good chance to save me money. Although controlling health care costs polls as the most important reason for health care reform, the Democratic plan rarely talks about cost control. Read this quote announcing the vote on the health care reform bill.

The House will move on the $1.05 trillion legislation that would cover 36 million uninsured people and create a government plan to compete with private insurers even after the election of Republican governors in New Jersey and Virginia. President Barack Obama will go to Capitol Hill tomorrow to meet with House Democrats, as they seek the 218 votes they need to pass the bill, a Democratic leadership aide said.

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The Myth of ‘Market Failure’ in Health Care

bill — Tue, 03 Nov 2009 13:07:42 +0000

Eighteen years ago when my son was born I came to the conclusion that health care was a very strange animal that appeared to be immune to the common sense practices used by businesses. Sadly the situation has gotten worse over the years and the present forms of “health care reform” look like they will aggravate the health care cost situation. I find both David Goldhill’s arguments in the video interview and the Cato Policy Analysis paper well thought out and more likely to improve the health care crisis than any other plan I have read.

One argument in favor of a government overhaul of the health care system is that the free market had its chance, and failed when it comes to providing the best possible care. But as David Goldhill discovered while researching for the September cover article in The Atlantic, the United States has anything but a free-market health care system.

He explains his findings below:

For real market-based reform, see Cato’s new Policy Analysis, “Yes, Mr. President: A Free Market Can Fix Health Care.“

The Myth of ‘Market Failure’ in Health Care
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Handicapping Health Care Reform

bill — Sun, 01 Nov 2009 15:32:07 +0000

Like most people I thought the Democrats would pass a health care reform bill even if it was universally disliked. I assumed that health care bill had about 99% chance of passing. Recently I lowered the odds to 50%. I have two major reasons to lower the odds.

The primary reason I am lowering the odds is that both the Senate and House versions of the health care bills continue to include the public option. The public option issue polls very badly among prospective voters and is very divisive for the Democratic party. This issue by itself poses a very difficult decision for at-risk Democratic House members. Although this is a small part of the bill, it is shaping up to be the straw that breaks the camels back. The argument that the public option is a de facto government take over of the health care system appears to be resonating among both the media and the public.
The huge unresolved issue is how to pay for the health care bill. One of the tax revenue options is the tax on the luxury health care plans. Despite the “luxury” name it looks increasingly like it would be a tax on union health care plans. I cannot see the unions standing by idly while this happens. The idea that the Democratic party is proposing to raise taxes on significant part of its base is both amazing and risky. The proposed changes to the Medicare Advantage and Drug Benefits are equally difficult to explain. Instead of improving Medicare the savings from Medicare is being used to expand health care to other groups. It is not surprising that polls of the elderly show that they are against the health care reform bill. To a lesser extent the cost shifting malaise affecting the elderly extends to the average voter. Increased payroll taxes are being used to subsidize insurance premiums. The polls suggest the voters are likely take it out on their elected officials next fall. One option not openly discussed is that the health care reform bill will become an unfunded mandate. Although an unfunded Health Care Reform bill would be distasteful to most voters, the politics of the Democratic party may force the party to not specify the funding specifics so that the Democratic party can get enough votes to pass something that looks like a Health Care Reform bill.

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Health Care Reform Part II: The Sequel

bill — Wed, 14 Oct 2009 12:16:09 +0000

One of the things not being discussed is the fact that there is overwhelming skepticism that any of the current legislation will slow down future health care cost increases. The political tactic is to expand health care coverage and leave the responsibility for “bending the health care cost curve” to a future group of legislators. Here are some sage comments by two organizations on the front line of health care.

The chief executives of the Cleveland Clinic and Mayo clinic, both held up as models for health reform, voiced concerns about the health care proposals moving forward in Congress.

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Fri, 02 Oct 2009 13:22:00 GMT

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The Low Cost of Individual Health Insurance

bill — Wed, 16 Sep 2009 11:28:11 +0000

Last week my boss and I were talking about health care insurance. He said the reason our company offers a Health Reimbursement Account is because the the price offered to corporations for health insurance is so much higher than the price offered to individuals. Although I did not have specific knowledge on corporate rates, I am familiar with individual rates. I am amazed that the individual rates for a high deductable plan, $4,000/year, are so low compared to the rates reported in news stories for Verizon($20,000/year) and an Ohio lobbyist($30,000/year). The high rates paid at Verizon and others makes me wonder why such “smart” people can be so dumb.

Today an editorial in the Wall Street Journal, Another Health-Care Invention, reaffirms that point.

The Congressional Budget Office expects premiums for employer-sponsored coverage to cost about $5,000 for singles and $13,000 for families this year on average. "Premiums for policies purchased in the individual market," adds CBO, "are much lower—about one-third lower for single coverage and half that level for family policies."

The best health care deal for a frugal, healthy family is to combine a high deductable plan with a savings account for medical expenses.

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An open letter to America

bill — Sun, 13 Sep 2009 22:31:57 +0000

Here’s what I think one of our “dis-respectful” elderly might say to Stevie about his post, An open letter to America, in which he says,

Dear Everyone,
Stop debating health care reform. You have no idea what you are talking about. …

Stephen, you need to calm down a bit. The sound you hear from these town hall meetings is just our legislators going through a California legislative moment. Our elderly are taking their Congressman and Congresswoman back to the wood shed for a little Bible study. Stephen, we are old but we are not senile. The TARP bill was supposed to stem the tide of foreclosures. It didn’t. The stimulus bill was supposed to stimulate the economy and stem the rate of unemployment. It didn’t. Now you are trying to ram a Health Care Reform bill through Congress and the bulk of the “savings” is going to come out of Medicare benefits for the elderly and you want us to believe that we won’t notice it! Which part of “Thou shall not lie” do you not understand?

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Will the Government Option Increase Health Care Competitiveness?

bill — Thu, 03 Sep 2009 18:04:50 +0000

One of the interesting ironies of the government option in the health care reform plan is that it is supposed to increase competitiveness in the health care insurance market. For those of us who have studied markets in a micro-economics class or read the Wall Street Journal, the key to increasing competitiveness has been to make it easier for competitors to enter into the market. When I look at the existing health care insurance market and compare it to the reform plan, I do not find any significant changes that will make it easier for companies to enter into the market. In fact a very good argument could be made that the increased regulations from the proposed Health Care Reform will make it even harder for companies or organizations to enter into the market.

Why Don’t the Health Insurance companies complain more?

When you consider the scenario that a government option could be the end of the health care insurance industry, you would think that the health insurance companies would be gathering up their supporters and flooding the airwaves with “public interest” commercials. The fact that we do not see the commercials tells me something. Although it is difficult to determine the insurance companies strategy, I think the insurance companies look at the government option as a likely failure. If the government option is modeled after Medicare the insurance companies are betting that they will be up against a very weak competitor. Up until this year Medicare was widely thought of as the high cost provider of health insurance and a poor model for state health care plans. The complaints about Medicare are fairly numerous. Unless something miraculous has occurred to Medicare, it is unlikely Medicare will be an adequate model for a new and improved health system. The biggest problem with this option is that it does not provide any incentive to improve efficiency at insurance companies.

If the government option is modeled after the Massachusetts or TennCare system, the insurance companies are betting that it will heavily subsidized and probably fail in a couple of years. TennCare was closed down because it failed at controlling costs. The Massachusetts system has been effective at enrolling people but has not yet reduced the rate of health care cost increases. This leaves us with a scenario in which the government option fails to reduce health care costs and the people will demand the insurance companies to come and rescue us. It looks like a win-win situation for the insurance companies and an unnecessary detour for the people who desire a health care reform that actually gets us more bang for our buck.

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