Ten words about health care

“No one should die because they cannot afford health care.” Those ten words [1] are the sharp edge of the health care debate.

I’m lucky in that, so far, I’ve had very good health care provided by my employers. How much longer can employers afford to do that in a world where they compete with companies that have no health care costs?

A recent Washington Post article [2] says that we don’t really know what we pay for health care. I can, at least, caculate what I pay for my health care insurance. A rough calculation of that can be found on my past pay stubs. Each month, I paid $175 into Medicare, with the hope that it will be there when I’m 65, and $177 as my contribution to the company-provided health care plan. Annualizing, that’s $4224 out of my pocket and, I estimate, $9700, paid by my employer, for a total payment into the health care insurance system of about $13,900. That buys two people some pretty good health insurance.

Let’s assume a not-for-profit insurance system, modeled on Medicare with some cafeteria of avaiable benefits including prescription drugs, and a requirement that all adults buy at least coverage for catastrophic conditions.

Is this the “Medicare for all” public option? Maybe, but it doesn’t have to be. There could be many Medicares. Current for-profit companies would convert to a member-owned, not-for-profit model and compete for my dollars.

I don’t know if my costs will go down. We’ve been told that Medicare’s costs are lower than private insurers [3]. Whether that’s true or not, as not-for-profites, the companies are no longer taxed, thus lowering their costs. Requiring the insurers to take all comers potentially raises costs, but requiring the healthy and young to buy into the system should offset that. Whether my costs go down or not, in this system I have a guarantee that I can get health insurance, without regard to my existing health, seams and gaps in prior coverage, employment status, or state of residence.

This not-for-profit system does not require executive salaries to be limited, capped, or cramped. Pay should be tied to value delivered to those they insure, measured by outcomes, service, enrollment, and other metrics that relate to the health of participants. If no one can be rejected for insurance, then insurers can’t game the system by picking only healthy people likely to stay so, and the metrics would be based on a level field. There would be money to buy the best people.

Let’s make another assumption — the government provides a tax credit for this premium or allows me to pay with pre-tax money. And one more assumption — as my employer is no longer my health care provider, they can use that money for something else, perhaps hiring more people, perhaps paying me more (because I now have pay for 100% of my health insurance), perhaps conducting research that leads the next big thing — that money not spent by employers on health coverage benefits the company and the national economy.

That no one should die because they cannot afford health care is a low bar to set when we talk about reforming the health insurance system. We have to do much better than that.

 


 

[1] “President Bartlett: There it is. That’s the ten word answer my staff’s been looking for for two weeks. There it is. Ten-word answers can kill you in political campaigns. They’re the tip of the sword. Here’s my question: What are the next ten words of your answer? Your taxes are too high? So are mine. Give me the next ten words. How are we going to do it? Give me ten after that, I’ll drop out of the race right now. Every once in a while… every once in a while, there’s a day with an absolute right and an absolute wrong, but those days almost always include body counts. Other than that, there aren’t very many unnuanced moments in leading a country that’s way too big for ten words.” (Aaron Sorkin, The West Wing, “Game On”)

[2] http://www.washingtonpost.com/wp-dyn/content/article/2009/09/19/AR2009091900112.html

[3] http://krugman.blogs.nytimes.com/2009/07/06/administrative-costs/