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UPDATE: Details on “the plan” for Real Health Reform

Posted Nov 25 2009 10:06pm

Here is a continuing update detailing, in greater depth, various points of “The Plan” designed to address the reasoning behind these ideas and the objections some have voiced.

(1) All persons must have health insurance from the private sector or government sponsored plans.

Many have objected to this as a violation of personal choice and freedom.  However, I would suggest that it is a dereliction of civic responsibility (if such a thing still exists in America) to force others (fellow citizens, doctors, hospitals, insurers, government - i.e. taxpayers) to pick up the tab for you when you become very sick or injured (as you WILL at some point in this life).  By mandating coverage with penalties, just as we do for auto insurance, we put personal responsibility back in the equation.  It has been far too long since that was the case as the government in particular, along with big labor and big business to varying degrees, have sought to remove responsibility from the individual and to displace it to some other entity.

(2) Proof of insurance would be required to get any type of license, enroll in school, apply for job, yearly confirmation will be required, etc. just as with automobile insurance.

Like all mandates, those without teeth fail. Therefore, there needs to be a “stick” which can be applied in the course of daily life, as opposed to a medical emergency (when no person will be denied care). The suggestion here is that all persons would be effected by these type of requirements and therefore the need to make sure that they have health coverage would be a stron g driver for compliance.

(3) Fine of $1,000 if presenting to Doctor, Hospital, etc., for service without insurance, and must pay all expenses for services.

This item is potentially more problematic, but only in the case of a TRUE emergency.  It would also require the cooperation of health care workers, doctors, offices, hospitals, clinics, etc. to report offenders. This is not necessarily the ideal scenario, however, along with point number 2, it forms the basis of a credible strategy to ensure compliance with point number 1, which, after all, is the real goal.

(4) The truly financially disadvantaged should be folded into the current Medicaid system with revisions; in that they should pay needs based premiums. As such, Medicaid, Medicare, disability, workers compensation, Government employees, Veterans, Retirement and children’s programs would not be significantly changed.

Here we get to one of the major issues, coverage (and access) for those without means to acquire private coverage in the marketplace.  There is much to debate about each of the programs mentioned here. Many things can and should be changed about how these programs work.  However, if we try to fix ALL issues in the system at once, the most major items of reform will not occur.  Therefore, we MUST focus on what is achievable and provides the most benefit within the framework of our currently established free market/government based system.  Expansion of these current forms of tax payer subsidized coverage should continue for the near term. Over time, some of these programs can be merged, rearranged or even eliminated without affecting the base of coverage provided.

(5) All company-sponsored programs would be phased out over three years (better than a tax break).

This will strike some as a major politically incorrect proposal.  However, if we are to restore personal responsibility back to the system we must do so by removing the need for businesses, which are clearly not in the health insurance business, from it.  Business should not be in the health business, but in business.  The morass created by having to have benefit coordinators (who spend most of their time on health insurance matters) instead of focused on traditional benefits (retirement, vacation, leave, etc., etc.) is inefficient and costly.  Elimination of the need for businesses to carry these costs will result in markedly reduced overhead, which is even better than a tax break to expand their current coverage systems as some have suggested.

(6) Minimum wage increased by $2.00 per hour so low income workers would have no excuse to offer for not having coverage.

Again, there will be resistance in many quarters to this proposal.  As we well know, the minimum wage is in the process of being increased as we speak ($6.55 effective July 24, 2008 and then again rising to $7.25 per hour effective July 24, 2009).  However, a further increase as suggested beyond this is a better format than asking businesses of all sizes to carry the full load for providing health insurance, which should be a personal responsibility.  For a full time worker, this $2 increase translates to $4,160 per year ($2 x 2080 hours).  That is more than sufficient for workers to purchase their own health care coverage within the context of the full plan as outlined here.

(7) Private health insurance should be re-structured to function as a regulated utility. Their rate structure should be only that needed to operate (process payments, review claims etc) plus a set profit of not more than 8-10%. Rates to be set nationally not state by state, or group by group.

Another very controversial approach. This site favors open markets and market based solutions to problems.  However, if we view health care as a national security issue and personal citizen responsibility (not necessarily a ‘right’ as some would argue) then it is fairly easy to justify some set controls on health insurance premiums and rates.  At present, there is little control, and since product offerings vary so widely and offer insurers so many avenues to deny claims, theremust be some balance put into play.

(8) Eliminate state oversight of health insurers in terms of rates.  Continued monitoring implementation of federal standards.

Again, not something that is offered lightly in view of this sites overall positive attitude to state (read local) versus federal controls.  Nevertheless, the current set up creates a situation where health insurers can cherry pick not only those they will cover, but which states offer the most favorable climate for them (read profitability).  States have a role to play as umpires but there must be a uniform playbook to govern all health insurers.

(9) As a regulated utility, the prices set should be wholly market based and not risk stratified for individuals or select groups

Basically, this is no different than offering any other product for sale.  The price is not based on WHO is doing the buying, but based on the value of the product being offered as set by the overall buyers in the marketplace. By offering coverage to ALL individuals, the risk is shared and a proper premium structure, along with surcharges if needed, can be arrived at. The current system allows for some of this.  However, all to often the result is denial of coverage from the get go or limitations on coverage, such as pre-existing condition exclusions.  Also, we often see groups (such as women) adversely rated, forcing them to pay higher premiums based on their sex alone, not any other factor.  This needs to be eliminated.

(10) Adoption of item 9 means pre-coverage physicals, pre-existing condition exemptions and the like will no longer be necessary – the premium is set and if I can afford it I buy it. I cannot be denied coverage for non-financial reasons.  Companies will have to compete on efficiency of their systems and overall quality of their services.

As an outgrowth of item 9, this is perhaps among the most important of all tenants of this proposal.  The major obstacles to health insurance access are limitations imposed by insurers on who they will cover and financial resources.  The former can be EASILY remedied by adoption of national standards prohibiting discrimination in the purchase of health insurance.  The latter can be dealt with through the current programs in place (as discussed above in item 4) as well as adjustments in the minimum wage and tax credits as needed.

(11) The base package of services required to be offered is pre set and supplements can be offered. Minimum basic policy defined (like auto insurance) with individual deciding on increased benefits.  However, the base must be very broad to make sure the pricing factors in overall gross population risks, as opposed to sub group risks. Minimum basic policy defined (like auto insurance) with individual deciding on increased benefits.

What should be in the base package? First, all aspects of a major medical policy should be included.  Second, emergent care.  Third, preventative services (vaccinations, screenings, etc.).  Fourth, basic materinty coverage for women and families.  Deductibles can be varied to adjust price, as they are now, however, there should be limits on how high deductibles can be set for primary policies.

(12) Fine of $100,000 to any insurance company that denies writing the policy (basic) regardless of age, gender, sexual orientation, race, genetic assessment, pre-conditions, etc.  Policies are not cancelable except by death or lack of financial qualification of coverage under item (1) above.

This site does not like onerous enforcement tools.  Again, however, insurers need to know that there are penalties which will be applied if they discriminate against policy seekers for ANY reason other than inability to afford premiums.  Individuals must be able to purchase coverage regardless of their health status which can and will vary from time to time.

(13) No limitation on sale of health insurance products across state lines.  This means that consumers in all 50 states would be able to choose among all licensed plans sold in the United States.

This increase in choice and options will help insure competitive rates in the marketplace.  The current system allows health insurers to cherry pick states and communities, with excessive rating of certain areas. By expanding to regional and national markets, health insurers can more easily spread their risk over the entire population insured.

(14) Hospitals and similar, fined $50,000 for refusing to treat presenting patients (patient non-compliance, refusal of treatment by patient, leaving against medical advice etc. would remain in force as currently practiced).

As noted in item 12, this site does not like onerous enforcement tools.  Still, major health provider sites such as hospitals, emergency rooms and the like, must accept any patient presenting for care. Currently, all do, and there are federal laws in effect which govern much of their behavior in this area.  However they are exposed both financially and legally in many cases by the current system. At this time, hospitals must treat individuals that present, regardless of insurance status or ability to pay. That means that emergency rooms are generally major financial losers for most institutions.  The best way to overcome this is to increase the numbers of patients who have coverage via the mechanisms outlined above, so the current financial exposure is drastically reduced.

(15) Physicians and all other health care providers fined for refusal to treat $25,000 (dismissal of patients for non-compliance or other ethically accepted reasons as outlined by the professions would be maintained).

Again, as noted, it would be this site’s preference not to propose this.  However, physicians and other individual providers must be willing to accept all patients who present to them for treatment.  This is already the case for doctors who are on call for emergency room duty at hospitals nationwide.   In the office or clinic setting this is also true, except that non emergent patients who lack coverage or ability to pay can be turned away.  This proposal would not change that scenario for elective visits but would change it in fact since most if not all citizens would have health insurance coverage, which would make non coverage and / or non payment a non event.

(16) True tort reform will be instituted nationwide. Tort reform must include caps on damages for pain and suffering, but should still allow for medical cost recoup as well as any expected longer term medical costs to be recovered.

The current system encourages lawsuits.  Additionally, lawyers almost always “blanket” sue, ensnaring anyone who was even remotely involved in the patients care or who is named in the medical record for any reason, even if they never care for or saw the patient.  This creates a web of defensive medicine at every level in the system.  Since this practice is systemic, it is very difficult to accurately gauge it in economic terms.  However, the impact is large and accounts for billions of dollars of unnecessary tests and procedures annually.  It also contributes to an endless stream of documentation as providers and facilities seek to justify every, single action taken in the care of patients.  This time is wasted and better spent actually taking care of the ill.

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Posted in health care reform, health insurance, health insurance reform, health reform, Hospitals, insurance access, Medicare, Physicians, Public Health Tagged: access, affordable health insurance, fines, health, health care, health care reform, health insurance, health insurance access, health Insurance exclusions, health insurance reform, health news, health plans, health policy, health reform, healthcare, Hospitals, Insurance, insurance access, insurance benefits, insurance commissioners, insurance companies, insurance premiums, mandated health coverage, Medicaid, medical care access, medical news, Medicare, medicine news, news, patient care, patients, penalties, personal health mandates, personal health responsibility, physician behavior, Physicians, political news, politics, pre existing conditions, underinsured, uninsured
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