We Need To Fix The Wrongheadedness Of Employment's Tie To Employees' Healthcare
Among other things.
It was amazing to me that they passed this massive piece of legislation -- the "Affordable" Care Act -- and didn't due what has been so necessary for so long: untie healthcare from the workplace.
This is especially necessary in an age when almost no one works for the same company throughout their entire career. (Many don't even stay in the same industry.)
Myron Magnet writes at City Journal about something I've long argued for -- getting employers out of the healthcare biz. They got in in order to give incentives back in the 40s, when there were wage controls in place, imposed as competition raged for scarce labor, due to how so many men were in the military.
So future reforms ought to get employers out of the health-care business entirely, since they are there by accident and add nothing of value to the health of the nation. Either remove the tax-deductibility from employer-provided health insurance, or else give everybody who buys health insurance an equivalent tax deduction. Insurance companies will prove intelligent enough to promote the formation of groups of those who buy their own insurance, so as to give them the benefit of the group-insurance discount. And as every commentator has observed, the freedom to sell insurance across state lines and to design a multiplicity of plans would spur a cost-controlling competition.A second worthwhile reform would be to encourage the rebirth of the mutual health-insurance company, such as Blue Cross-Blue Shield used to be. Like the Victorian Friendly Societies, early American health insurers were just vehicles for pooling risk, with people knowing that they were all subject to serious illness, but not knowing whether or not it would ever afflict them, so it made sense, behind this veil of ignorance of the future, to pool their money to pay the expenses of those among them unfortunate enough to contract one of the thousand natural shocks that flesh is heir to. In the forties and fifties, the owners of these insurance companies were the policyholders, and their employees were just administrators who calculated the risks, collected the premiums, and paid out the benefits. Blue Cross and Blue Shield were in the insurance business, not the investment business, and they needed no high-paid top executives to make investment decisions to enrich non-policy owning shareholders, because there were none. No insurance company presumed to tell a doctor how to treat his patient, because profit erosion through higher costs was not a baseline concern. The demutualizing of these companies was a huge policy mistake, vastly increasing the cost of health insurance in order to reward public shareholders and executives, not policyholders. Now the tail wags the dog.
I've said nothing about health care for the poor. I'd only point out that in mid-century America, nobody went untreated. There were always doctors who wouldn't charge patients who couldn't pay, always charity hospitals staffed by the same doctors who staffed the fancy hospitals, always union clinics and company doctors, always emergency rooms that would treat first and ask about ability to pay later. And all these delivery systems provided better care than Medicaid.
Here's a guy with an idea from their comments. I particularly like the Costco notion. That's how my Kaiser healthcare worked until it was ruined by Obamacare. It wasn't Cadillac care, but it was good care, and affordable.
Argent Flexner, Austin, Texas What is actually needed to accomplish effective health care reform in the United States is fairly simple The following, and only the following, is necessary and sufficient to use the free market to drive down costs, while increasing coverage and competition in health insurance:1. Make health insurance premiums tax-deductible for anyone (not just employers) who pays them;
2. Declare health insurance interstate commerce; and
3. Authorize any association or group (e.g., Costco, Sam's Club, AAA, ARA, etc.) to acquire group health insurance policies and sell group coverage benefits to its members.
#1 de-links health insurance from employment, making it so that labor markets will be more fluid and job loss won't unnecessarily be life-threatening. #2 makes it so that health insurance can be acquired across state lines, and insurance companies compete for their customers, based on what works, rather than what the state department of insurance mandates. By virtue of being classified as interstate commerce, state laws that interfere with the federal program would be preempted and unenforceable. #3 would make group savings widely available to everyone, and make it so that you can buy health insurance at Costco or Sam's Club, rather than depend on an employer to obtain it.
It doesn't take 1,000 pages to do this. It takes less than one full page, if it's done properly.
Which should health insurance premiums be deductible?
What is it about those transactions that puts their transfer of wealth out of view for revenuers?
Crid at March 30, 2017 10:21 PM
I see the blinders are still on.
Kids, national healthcare is not INSURANCE. It is SOCIALIZED MEDICINE. Yes, there is a difference which I have gone over again and again .
If you insist on using INSURANCE as a model, you will always pay a deductible and you always pay for healthcare that you do not receive. There is no immediate method to determine the efficiency of the administrators, either. Further, there is no reward for conserving your health. In fact, administrators will notice that and FORCE changes in your behavior to fit their policies. No, you cannot buy that motorcycle or that brand of car.
That is why CREDIT replaces the insurance model in the solutions I suggest.
Radwaste at March 31, 2017 3:26 AM
I would love to see Congress be forced to use the VA w/NO special exemptions.
After they "fixed" the VA I would favor that being our country's health care provider (I know I know).
I would like the VA to be the provider at least in a clinic in all rural Counties spaced no more than 100 miles or in areas w/a population of ??? or more.
Lots of issues but ...
Bob in Texas at March 31, 2017 5:52 AM
"What is it about those transactions that puts their transfer of wealth out of view for revenuers?"
A question worth asking. The important thing here is to make the tax treatment of employer-provided and individually purchased policies equal, so that the market isn't slanted towards the employer-provided policy. Whether it all becomes deductible, or none of it, or some percentage in between, is negotiable. I don't have a set opinion one way or the other.
I don't think anyone here will have a big argument with any of the three points. (It's worth noting that #3 used to be legal, but the ACA banned it.) I would add:
4. Get rid of all limits on what kinds of policies can be offered, other than those that prevent outright fraud. Eliminate all mandates that require people to buy and pay for coverage that they don't need.
5. For doctors and hospitals, require price disclosure for all non-emergency treatments and drugs in advance. For insurance, require disclosure of what the insurer will pay for each procedure and drug., on a given type of policy.
6. Once the other reforms are in place, phase out the ban on excluding pre-existing conditions. Do this over a period of, say, two years, so that people who have pre-existing conditions can get locked in to a policy. Beyond that, create an "assigned risk" pool, similar to what is done in the auto insurance industry, for high-risk customers who can't get insurance any other way. There would also need to be some kind of "bridge" program for people who are transitioning out of Medicaid.
Keep in mind Raddy's point about how health insurance has become a de facto social security program. The actual risk management part of it needs to get separated from the "concierge" part that pays for routine and elective treatment. Insurers can offer both in one policy if they want, but it needs to be clear to the insured which part is which. And the option to buy only one or the other should be available. I think this is why some people are saying that catastrophic care coverage should be universal and paid for by taxes -- not sure I agree, but I kind of see the point.
Cousin Dave at March 31, 2017 5:55 AM
An interesting wrinkle on CD's points.
Item #4 can be unilaterally enacted by Trump.
Item #5 will probably be useless. It will just be published in a 1,000 page booklet with 9pt font that no one can read or understand. Especially since you need a new booklet for each insurer and it will change every 6-12 months. (On top of that it still won't reflect reality.)
Item #6, I think most states used to have this. But Obamacare eliminated it.
Ben at March 31, 2017 6:16 AM
It used to be that associations of self-employed people or small businesses could come together and buy insurance. This kept the advantage for the ensurer of spreading the risk and the advantage for the insured of bargaining with doctors and having a network. The ACA banned this. There would be nothing wrong with restoring this.
cc at March 31, 2017 9:24 AM
Keep in mind that for my model, the vast bulk of treatment would never involve an insurer.
I have trouble getting people off of the idea that insurance is what they need.
No! Treatment is what you need.
Radwaste at March 31, 2017 9:43 AM
Why don't we just stop invading everyone and blow the money on free healthcare instead?
Not that our adventures in Vietnam, Iraq, Afghanistan, et al haven't paid off big, of course.
Gog_Magog_Carpet_Reclaimers at March 31, 2017 10:02 AM
Why don't we just stop invading everyone and blow the money on free healthcare instead?
How's that War on Poverty coming?
I R A Darth Aggie at March 31, 2017 11:38 AM
"Why don't we just stop invading everyone and blow the money on free healthcare instead?"
If you blow money on it, it's not free.
Old RPM Daddy (OldRPMDaddy at GMail dot com) at March 31, 2017 12:45 PM
"How's that War on Poverty coming?"
Not sure. I mean, I'm old, but I'm not THAT old.
Anyway I think we'd all rather spend three trillion dollars on something good for the citizens. Unless we're so f'n incompetent we had to spend that much to whack Bin Laden and Saddam.
Gog_Magog_Carpet_Reclaimers at March 31, 2017 3:08 PM
We would have spent it either way Gog. The wars made no difference on the budget. We spend ~$580B on defense each year. We spend ~$910B on social security. We also spend ~$580B on medicare (same as the military) and an additional ~$370B on medicade. So we spend far more on health care than we do on the military in general.
But if you think medicade is a great deal and want to join up you should probably look into how effective it really is.
Ben at March 31, 2017 9:45 PM
The is nothing wrong per se with an employer providing health insurance.
What is wrong is the IRS treats employer provided health insurance differently than buying your own policy.
Employer provided health insurance is exclusionary. It never appears on your W-2 as taxable income.
Any other form of health insurance you buy you can take a deduction for, which doesn't do you much good if you are one of the 90 percent of Americans whose deductions dont exceed the standard deduction the IRS gives everyone automatically.
We haven't been able to itemize in years.
Again, you are looking for a government *solution* to something the government screwed up to begin with.
The government, through these obtuse policies, and also by under reimbursement of medicare, medicaid patients, particularly nursing homes, has so driven up costs for everyone else that is will be a very tough mess to untagle.
Nothing simple about it, but it needs to start with touching the third rails which are tort reform, and the price gouging restrictions on how many people are admitted to medical school, and what they have to pay to get an eight year (or more) degree.
Isab at March 31, 2017 10:04 PM
Isab is exactly right. What I'm looking at now is reporting more income than I actually have in order to be able to take an Obamacare subsidy. Right now, because my expenses are so high, my gross adjusted income would force me onto Medicaid. Since I'm not going to do that for my healthcare, I would like to have a choice to pay more than I "should" under the shitty healthcare law (ACA). I am, however, not eligible for those subsidies. I discussed with my accountant the prospect of lying and saying I, oh, sold a tiara for $16K each year.
Sick fucking thing to have to do that, but Obamacare ruined my previously affordable care, and I couldn't afford to get a needed biopsy lately.
New health"care" for Amy: "Jeez, I hope it's not cancer."
It's likely not. But this is fucked up.
Isab, thank you -- your understanding and stating of this gave me a little vacation from my white hot rage.
Amy Alkon at April 1, 2017 5:25 AM
"The wars made no difference on the budget. "
Of course they didn't. The cost is simply piled on to the national debt. As for finding out how effective medicare is, you'll note I didn't mention it, support it, suggest it, or reference it, because I'm not selling medicare as a solution.
In any case, I was wrong about the three trillion.
The wars will cost us over four trillion dollars now that we've had eight years of Obama lovin' his drone wars:
https://www.washingtonpost.com/world/national-security/study-iraq-afghan-war-costs-to-top-4-trillion/2013/03/28/b82a5dce-97ed-11e2-814b-063623d80a60_story.html?utm_term=.902e93d62e37
Gog_Magog_Carpet_Reclaimers at April 1, 2017 10:40 AM
"Isab is exactly right. What I'm looking at now is reporting more income than I actually have in order to be able to take an Obamacare subsidy. Right now, because my expenses are so high, my gross adjusted income would force me onto Medicaid. Since I'm not going to do that for my healthcare, I would like to have a choice to pay more than I "should" under the shitty healthcare law (ACA). I am, however, not eligible for those subsidies. I discussed with my accountant the prospect of lying and saying I, oh, sold a tiara for $16K each year"
The reason you are in this boat is because California helpfully expanded it's Medicaid eligibility as states who created their own exchanges were supposed to do.
If I were you, and the age that you are, I would do one of two things; either sign up for medicaid, using it as your catastrophic fall back policy, and pay for the doctors, and proceedures you think you need, with cash (be sure to negotiate them first)
Or I would move to a state where you are eligible for subsidy because that state has not expanded Medicaid eligibility and has a viable company offering Obamacare policies (there aren't very many left)
Be aware that at any time, your California Obamacare policy could go belly up because Kaiser is probably losing money on them, and may decide ti pull out of the market.
Your third option is to find one of the policies that are exempt from the Obamacare rules, and buy into that. I have some friends who are members of a Christian church which offers politices for it's members. There may be a few secular organizations whuch are also allowed to offer policies. I dont know because I have Blue Cross Blue Shield which I never liked very much, and now really hate because it has become essentially a catatrophic policy that costs 19,000 dollars a year ( we pay about half of that) with a 12000 dollar annual deductable.
Good news, is we are now a little over eight months away from Tricare eligibility.
It won't be great but it will still be better than paying 19000 a year for a catastrophic policy.
I will probably end up sitting all day in some Air Force clinic, and then have to listen to some Ist Lieutenant PA lecture me and take my blood pressure before they decide that my Thyroid issues are too complex for them to treat, and they sign some form which will allow me to go back to my regular doctor, but I only go once a year so it won't be too painful.
Isab at April 1, 2017 5:30 PM
That's all bullshit accounting Gog. 'The war' is part of the normal budget and it isn't that large a part of it. Four trillion may sound like a huge number, but once you use standard accounting and look to spend it on something else the money vanishes. If there had never been a war in Iraq or Afghanistan it still would have cost the same four trillion. The debt would be in the exact same place. I'm not arguing for it. But it really didn't cost any money. Human lives and suffering is a different accounting.
Ben at April 2, 2017 6:24 AM
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