Sunday, July 14, 2013

VoucherCare!

So this is not my first attempt at blogging – before I posted the “official” first post, I removed a set of posts from my prior blogging attempt two years ago. Ha! I don’t recall deciding to focus on healthcare, but that’s what all the prior blog posts were nearly all about. And we’re still talking about it! But we’re no closer to a solution.

Here’s the deal: the Republicans really just want to go back to the status quo ante. No Obamacare, and periodically we’ll hear “repeal and replace” – but the “replace” doesn’t really seem to be much, just malpractice reform or the usual “buy insurance across state lines” (that is, to circumvent state-by-state coverage requirements). And, to be sure, there’s no shortage of problems with Obamacare – everything from the peverse incentives of the employer mandate to the free rider issue of guaranteed issue to the mess of the subsidies and everything else that’s been discussed to death.

But the status quo ante just isn’t viable. Medical costs are escalating unsustainably. Employers are cutting their subsidies for employee health insurance, and moving to high-deductible plans. I’ve read – don’t ask me to find a link now – that the stagnating salaries we’re now experiencing are to a significant degree explained by the every-increasing amounts that employers are shelling out for their employees’ healthcare. And, Obamacare or not, employers will be passing on an every-increasing share of the cost to their employees, or ceasing to provide it at all.

Periodically Republicans propose a tax credit approach -- $2500 for an individual or $5000 per family, for instance – which is a step in the right direction, at least, but it doesn’t go far enough, since all individuals, and all families, don’t have the same health insurance costs.

If I were czar, as my dad would say (does everyone’s dad say that?): we’d move to a full-blown VoucherCare. Yea, the Dems used that term pejoratively, but it’s really the best way forward: vouchers for all citizens, permanent residents, and individuals on temporary work visas of whatever kind. Vouchers vary by age and sex, and, initially, health status, and can be taken to any insurer, and are sufficient to buy a catastrophic-deductible insurance policy, with the whole thing funded by, inevitably, a bump in income tax (as part of a broader tax reform, ideally).

Insurers would compete on how low a deductible they can offer for the given voucher amount, or promote their level of customer service, or have differences in the size of the provider network. In a perfect world, the disconnection from the employer would enable hospital/doctor networks to develop a “staff-model HMO”-type product aimed at the local community in a way that isn’t possible in the employer-based system, when the employer has to provide insurance suitable for all their employees in a given metropolitan area. I’m not a healthcare actuary, but I tend to think that a significant part of the solution to high healthcare costs has to be doctors, hospitals, and insurers working together as the standard model.

The policy would also cover only those treatments which have been proven to be effective, not those which are experimental or based on a doctor’s hunch or unproven conventional wisdom, and certainly not treatments or pharmaceuticals based on politics. Individuals could buy riders to cover additional treatments, or to lower the deductible. And sliding-scale clinics could provide care for those who can’t afford the out of pocket costs up to the deductible.

Is VoucherCare politically possible? I’d like to think it’s got something for everyone: for Republicans, the free-market approach with relatively few regulations; for Democrats, the assurance that all Americans would have provision for their basic healthcare needs – not the routine treatments, but the sort of bills that land people in bankruptcy.

But I don’t think Republicans really recognize that the current system isn’t sustainable. And Democrats, if they’ve relinquished the “Medicare for All” single-payer vision (let’s call it Medicaid for All and see how many people favor it), still want to keep the system tightly regulated, with the government spelling out coverage details. And no one wants to talk seriously about funding, instead playing the game that a few small hidden taxes will do the trick!

And that’s as far as I get – since I am, in fact, not czar, and don’t have the ear of any politician, I’m stuck with blogging.

But, really, say it with me now: VoucherCare!

5 comments:

  1. Two comments:

    (1) You seem to be missing a fundamental -- As long as insurance is used to pay for routine costs, there is no user-incentive to try to minimize expenses. Or find the most and medically- AND cost-effective treatment.

    I had two kids in braces which has drastically limited insurance coverage, went for the max tax-deductible health savings account of 5K. I found this to be a substantial way to minimize real-time impact of medical expenses on our household budget. It has since been reduced to 2.5K. It appears that US Gov. is moving away from the concept.

    (2) If the US Gov. funds something, they naturally and ALWAYS want to put conditions on it. The conditions reflect politics. Frankly I don't think Fed Gov is capable of leaving out support for birth control and abortion and other causes du jour whenever the Dems have the helm.

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  2. Jane: Serious question, are you actually an actuary? If so, maybe you can correct where I'm wrong:

    I thought the whole concept of insurance is based on pooled risk, where unanticipated costs to a single individual from the insured activity might be unmanageable. I thought the cost of premiums is based on recovering the payout. If that's the case, how does insurance paying for same costs everybody incurs work?

    I think of med-ins. premiums as containing 2 layers of cost, 1 for risk and 1 for care & feeding. Every care and feeding benefit boosts premium charge by the cost of care & feeding the insured individual.

    Since the insurance company recoups its costs, it has little skin in keeping service costs low. Since the supplier can charge up to the limit the insurance company sets, they have no reason to keep costs low.

    RECENT EXPERIENCE: I'm tired of paying the high cost for glasses at my optometrist. A national chain adverts glasses can be had for about $160 for two pair of no-line bifocals (fine print, IF YOU DON"T HAVE INSURANCE). If you have insurance, the cost is generally more than $300 for one pair, most of which is paid by insurance (all but about 10%). I am not convinced that the company loses on the $160 deal; if they did, I don't think they'd offer it. But hey, since I only pay them $30, who cares? Well...premiums...

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  3. Hi, unknown #1 & #2 -- I started to type a comment, then ended up getting really long-winded. I'll address this in a later post. (except that -- unknown #2, I'm not sure ehat you mean with "how does insurance paying for same costs everybody incurs work"?

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  4. Can't quite figure the system out; I'm not sure how to register a name. I'm both unknowns (& probably others; don't be disappointed that I'm a whole bunch of commenters).

    If we all have the same expense, say an annual $150 medical exam, don't we all pay a $150 add on to the insurance premium? If so, what's the point of adding admin costs instead of paying it directly (like using a medical savings acct)?

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  5. http://www.marfdrat.net/2013/07/15/heres-the-kind-of-health-care-change-we-need/#.Ues8G_Mo5jo

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Love comments! And the nice thing about this small blog is that I rarely get spam so don't need to moderate the comments.

I've set the comments up to allow anonymous users -- but I'd love it if you "signed" your comments (as some of my readers have done) just so you have an identity of sorts.