Healthcare

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With Medicaid waiver, California dives into health care reform

I think it is admirable that California is attempting some innovative health care solutions and wish them the best of luck.  If I understand their proposal correctly they will be billing the federal government the same amount but the spending will not follow standard Medicaid rules. With the waiver they will be using the savings from stream-lined health services to expand Medicaid. Since expanding Medicaid and streamlining care sound like two independent projects, my fear is that they will expand health care and fall short at getting the cost savings. History has shown that efforts like this are much better at expanding health care than cutting costs. If the cost savings do not appear, California or Medicaid is in the hole for an extra $2 billion per year.

The plan, which the state calls a “bridge to reform,” is also designed to bolster the state’s safety-net hospitals, as well as lower overall health care costs. Under the Nov. 2 agreement ”” a waiver of standard Medicaid rules aimed at allowing states to test innovative new programs ”” California promised to shave $2 billion per year from its existing Medicaid bill by streamlining care for its highest-cost recipients: seniors, adults with disabilities and children with severe illnesses. The federal government agreed to give California $2 billion per year in return.

With Medicaid waiver, California dives into health care reform

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When Do I Get my Obamacare Waiver?

Since it appears that 111 waivers have already been granted including a waiver for mini-med plans, I was wondering whether everyone who has a high deductible health insurance could be exempted? High deductible health care health insurance is the cornerstone of health savings account(HSA). For some people this is a very cost effective way to manage health care costs. I use the health re-imbursement account(HRA) I get at work to purchase a low cost, moderate deductible plan.  The cost of this plan is much lower than the HRA limit. This allows me some wiggle room if something unusual comes up that is not covered by the health insurance plan. The company I work for benefits since my family is healthy and I have been savvy about controlling our health care costs. Since this arrangement is beneficial for me and my company, it actually makes more sense that the government should waive my plan than it is to waive the high cost labor union or mini-med health care plans.

Michelle Malkin » The Obamacare Waiver-mania! movement builds

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Ideas for Bipartisan Health Care Reform

I am doubtful that Obamacare will be repealed in the next two years but I am slightly optimistic that it can undergo some significant improvements in controlling health care cost growth. Here are two key issues that I think we can get bipartisan support on.

  1. Embrace a a wider range of cost reduction strategies including HRA and HSA.
  2. Increase the transparency and honesty of how the Obamacare health system is supposed to reduce health care costs.

Although Democrats loath any health care other than universal health care it is probably an impossible task to convince the American people that universal health care will reduce health care costs. Since the experiments at controlling health care costs using universal health care failed in Tennessee and it looks like it will fail in Massachusetts, we need other health care options if we want to reduce costs.

One health care cost reduction option that has fallen through the cracks is Health Savings Accounts(HSA) and Health Reimbursement Accounts(HRA). I am an example of a person who has successfully used no health insurance, health reimbursement accounts, and health savings accounts for my family over the last ten years. The most recent employer provided health care costs that I could find are about $12,000 a year. My health care costs last year were $2,000. Beating the employer average for one year might be interesting but when you beat it for ten years you are looking at a viable health care alternative to universal health care and large employer health care plans. It may not be the right plan for everyone but it is the best investment I made over the last ten years. With the recent legislation my concern is that when the government develops a consensus that $12,000 for health insurance is normal, they will not be satisfied until everyone pays that amount. This is reflected in the recent health care reform which forces people to buy an insurance plan they may not need or want. The press coverage has indicated that the plans available in the health exchange will be modeled like those at large employers. For a person like me this amounts to a $10,000 a year tax. Even if I do not have to pay for the increase, I am grossly over-insured and my employer will bear the brunt of the cost increase.  When I read the description of how the health insurance exchange plan is supposed to work, it sure sounds like a governmental version of http://www.ehealthinsurance.com/ with social goals as the primary goals. This is a recipe for a cost control disaster. If our government really wants to lower health care costs, they need to have health care cost control as their number one priority. If controlling health care cost is our number one priority, than it follows that people need the option of low cost health insurance as an incentive for those people who are willing to become savvy about their health care options.

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Things that make me go hmm… HealthCare.gov Insurance Finder

I was looking at HeathCare.gov today. It is a pretty site. I was researching information about how the recent legislation impacted HRA and HSA accounts so I decided to give this site a try. It did not have anything. Their insurance finder looked intriguing so I decided to give it a test run. Since I used ehealthInsurance to get my last health insurance policy, I was hoping that they would provide something even better than eHealthInsurance. The worst case scenario I expected is that they would clone eHealthInsurance. However, they chose to provide me with several completely useless suggestions, like check into getting insurance at work. If you are looking for health insurance, HealthCare.gov insurance finder is a complete waste of time.

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Great Ideas about Health Care Reform

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

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

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

 

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

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
Chris Moody
Fri, 30 Oct 2009 18:55:05 GMT

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Handicapping Health Care Reform

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.

  1. 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.
  2. 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.