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Health Care Reform, Doing the Devil's Work on the Lord's Day II

By Jim Odom

Congress has just passed and the President has just signed, the most far reaching and comprehensive health care reform ever considered. To be fair, the bill has some positive ideas, but at what cost? The most conservative estimates say that this bill will cost $Trillion over the first 10 years. I believe that this monstrosity of a law needs to be repealed and replaced with a more common sense approach to the problem. The law does nothing to curb either health care costs or health insurance costs. I believe the following changes could be considered in place of the law that just passed:

Allow consumers to purchase insurance across state lines

This reform could save billions of dollars in health insurance premiums. Why can't a consumer who lives in Georgia, buy the same insurance policy that a consumer buys in Texas? The answer is that all states limit their residents to buying insurance that has been approved by their state's insurance commissioner. It's a turf battle. The answer is simple. Why not allow a consumer the ability to buy any insurance policy that is approved by ANY state's insurance commissioner? In some states, a health insurance policy can cost 3 times the cost of a policy in a neighboring state. One of the reasons for the higher costs is because of the mandates placed on the insurance companies by the individual state insurance commissioners. Here is just one example: State A requires that every insurance policy sold must have maternity benefits. State B does not have that mandate. If you are a woman living in State A, and want to buy insurance; but you know that you are unable to get pregnant, you are still required to buy the policy approved by State A, including the maternity benefits. If you could buy across state lines the policy approved by State B, you could save thousands of dollars a year in premiums.

Take away the ownership of policies from Employers

Most consumers receive either partial or full benefits including health insurance as a part of their pay “package”. This method of getting health insurance means that the employer “controls” the insurance policy. If the employee is fired, laid off, or changes jobs, the insurance cannot be kept by the employee past a short period of time. This means that if an employee is currently insured, he is at the mercy of his employer as to whether he will remain insured. I would propose allowing the employee to buy his own policy with money that is withheld from wages. Employers could opt to match funds or even contribute the full cost of the policy but it would be purchased by the employee, not the employer.

One objection would be that employers get special “group rates”. Well why not offer special group rates to employees? A group couldn't be much bigger than “All Americans”. If policies were sold across state lines, and if a group were set up to include everyone without regard to preexisting conditions, health, or age, the premiums would drop for most everyone significantly. Once the policy was purchased, it could not be terminated by the insurance company for any reason except failure to pay premiums. Even then the policy holder should have a reasonable time to “catch up” back premiums and get the policy reinstated.

Allow consumers to purchase insurance with pre-tax income

Currently if a consumer is not covered under an employers plan, he must purchase health insurance with after-tax income. That needs to be changed so that an employee can purchase his own policy with pre-tax income. That simply means that the health insurance premiums are tax deductible. If an employer buys the policy, it is deductible to the company. Why then shouldn't the consumer get the same benefit if he is purchasing the policy himself.

If the cost of health insurance premiums were tax deductible, more people would opt to voluntarily buy insurance and the mandates in the current law would be unnecessary. 16,500 new IRS agents to police the new insurance mandate,...really!!!! I can hardly stomach the thought of the IRS being involved in our health care decisions. I'm sure other ideas can be considered that would make buying health care insurance less of a burden and negate needing fines for NOT buying insurance. Reducing the cost of premiums would ultimately be the leading reason for consumers to buy health insurance without it being mandated.

Allow use of Medical Savings Accounts

One way a consumer can “self insure” to some extent is through the use of a medical savings account. The way a medical savings account works is that a consumer sets aside an account that is funded through tax deductible contributions in amounts decided by the consumer. The funds can then be used for any medical needs and withdrawn without penalty for such needs. There would be a hefty penalty for withdrawing the funds for any other purpose. There is a reason these health insurance accounts can be a health insurance cost saver.

Once the account has reached a certain level, lets say $5,000.00, then the consumer can buy a much cheaper health insurance plan. The new plan could have a $5,000.00 deductible and would be much cheaper than the typical policy that has a low deductible or co-pay. The high deductible could be met by withdrawing funds from the savings account to be replaced later. If the consumer had no major out of pocket expenses, the fund would not be replenished and would remain at the original $5,000.00 balance drawing interest income that was also tax exempt as long as it stayed in the account. Theoretically, the consumer could keep adding to the account and getting a higher and higher deductible policy as time went on and the account grew. Can we say self reliant.

Health care cost savings

The easiest way to bring down health insurance costs is to bring down the overall cost of health care. If insurance companies didn't reduce premiums when costs of services fell, another insurance company would step up and offer lower premiums. This free market competition has been the way that America has led the world in our standard of living. There are those who say that the government should take the place of insurance companies. I would ask for you to name one business that the government has run well. Would you like to get the same level of service that you get at the DMV when you need health care? If you do not like the level of service you get at one insurance company, you are free to take your business to another company. Competition makes the system work. A single payer government entity would be a nightmare. The current law does not provide for that single payer government option. But make no mistake, that is the ultimate desire of the lawmakers who passed the current law.

So how do we bring down health care costs and ultimately health insurance costs? First and foremost would be to reform current laws regarding medical malpractice. There is a real need to legislate tort reform...no frivolous lawsuits. Doctors are mostly honest men who try very hard to relieve human suffering and above all else “do no harm”. Given the complexity of the human body, there are obviously going to be mis-diagnosis and errors made. Very few doctors would intentionally or carelessly cause human suffering. Yet when a doctor makes a mistake, patients and trial lawyers act as though they just won the lottery.

Where does the money come from to pay off these lawsuits? Everyone seems to think that money grows on trees and there is an unlimited supply. I may as well “get mine”, is everyone's attitude. Don't get me wrong, patients need to be reimbursed for reasonable costs associated with repairing anything that a doctor may have “messed up”. But millions of dollars for mental pain and suffering must come from some source. The “source” is ultimately other patients. If one patient “wins the lottery”, the money to pay off this patient comes through either higher costs of malpractice insurance or higher costs for that procedure in the future.

Additionally, many “unnecessary” tests are run just so a doctor feels comfortable that every possible avenue has been examined before a patient is diagnosed. Every test, every procedure, and every lawsuit award become a part of the overall cost of health care. These costs are spread out among all of us in the form of insurance premiums. These premiums could be much lower and affordable by all if some of the above measures were taken.

There are many other cost cutting measures that can be taken. Digitizing records could help hold down costs. A doctor's handwriting is notoriously bad. Putting information on computers and writing prescriptions by the click of a mouse could save lives as well as time and money. There are many other ideas that could be implemented if time and effort were put into cost savings instead of government intervention.

Indigent care

Needless to say, even with all sorts of cost savings, not everyone is going to be able to afford health insurance. There will always be a need for showing love and compassion towards our fellow man and help others in a time of need. But why not make it voluntary? I like to give. I get a warm glow when I think I have made a difference in another person's life. When I get my electric bill each month there is a box I can check that says,”Would you like to pay an extra $10 to help keep electric service on for the needy?” Why not do the same for our health insurance. If many of the health insurance policy holders voluntarily gave a little bit extra, everyone could be covered.

As evidence that this could work, look at the outpouring of support when there has been a human need. Look at the millions of dollars that poured in to relief agencies after hurricane Katrina, after the earthquake in Haiti, and after the tsunami in Indonesia. There is a role for the government to play in making sure insurance companies all are regulated fairly. There is a role for government but don't make that role one of confiscating our money and mandating that everyone have health insurance. Individuals can step up and do it better than the government can do it.

That is what has made America great. A people who were not satisfied to stay at Plymouth Rock launched out towards the west. They didn't know whether all their needs were going to be met. Rugged individuals who will step up and say, "I am going to take responsibility for my family and not look to the Federal Government to solve all my problems."

Hi Jim,
Have you been sending this information to your national newspapers and your government representatives.

National Newspapers? I'm surprised you even read it.
Government Representatives? They want power over our lives. They are not interested in free market solutions. If bigger government solves all our problems, we NEED them more and more and thus they become more powerful.

One of the things about this new law that absolutely astounds me is the lack of any government interest in any aspect of the SUPPLY of health care.

It isn't that people need insurance, it is more about doctors and pharmaceutical companies securing their own future income. The patient is nowhere to be seen in any of the provisons of this law EXCEPT as a source of income.

Has anybody actually sat down and worked out (as has been done by other responsible governments) how much money can be saved by simply restricting the use of 'branded' drugs. Generic drugs cost a fraction of the 'branded' drugs even though they are identical - just making this single restriction could save hundreds of millions of dollars a year.

Why does no-one think it strange that 'prescription only' drugs are advertised on TV? Are viewers supposed to know better than their doctors and request the drug of their choice - you know, the one with the catchiest jingle?

You are so right, Generic drugs cost a fraction of the cost of 'branded' drugs. This is just one more example of an idea that could be included in the new bill after this monstrosity is repealed. There is no cost savings ideas at all in the existing law that just passed, only more government mandates.

Thank you for sharing, Jim. You have provided a wealth of information.
Which cost the taxpayer more? Having people who are uninsured, go to emergency rooms? Taxpayers subsidizing medical insurance coverage for low income working people?
There has to be a balance somewhere.
Best wishes.
Frederick

Low income people going to emergency rooms do indeed cost more. That's why we need to get them insurance coverage they can afford and put a stop to "free" emergency room treatment.

All of this has been said in Congress by the "minority" party. The legal lobby in Congress is powerful...

You're right, the "minority" party has come up with some of these ideas and been totally ignored. They were branded as the party of "no" when they should have been called the party of "know" as in we know the right answer.

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