Health Care

Okay, here's my two cents. Yes I am a progressive. Yes I want a public option. Yes I think single-payer is the best model. I do think there is room for a private competitive market, but ultimately I think all Americans should have a public option.

I work in Property Casualty Insurance. Insurance has a very specific role, to finance risk. We make money by insuring a lot of relatively safe exposures, and only paying out for the occasional accidental loss. Health insurance isn't like this. Health insurance funds wear & tear. It's more like an auto warranty, but that of course runs out after the car ages a bit. The point is, insurance is not a wise business model to fund healthcare, because we need it to pay for wear and tear and accidental loss. (Especially wear and tear because often medical costs associated with accidents are covered under property/casualty policies). Since there is also a profit motive, we end up paying exorbitant premiums, as if we were paying for wear & tear and accident insurance on our automobiles throughout the life of the car. We all feel this play out in our day to day lives. I am a healthy person, and I still see how my premiums are not enough to fund my basic care and why health insurance companies need deductibles, copays, higher premiums, limits and other mechanisms to limit their exposure; they simply cannot run their business otherwise. And that's to say nothing of exorbitant executive pay, marketing costs, administrative overhead, etc, many of which are eliminated or reduced in a public/not-for-profit model.

Of course, the average individual does not have the resources to cover medical costs anymore, nor do employers, nor does government. So we are in quite a pickle then. This is why politicians focus on cost reduction. It's an obvious first step, and one that seems like it would be generally less susceptible to political backlashes. The insurance companies like reform plans that focus on cost-reduction, because it's not a public competitor, and they can keep promising to cut costs, buy some time. The rest of us like cost-reduction because we can't afford this stuff anymore.

The insurance companies won't cut costs though, unless government forces them to. And I do mean force, as in Uncle Sam says to Blue Cross, "You must charge $x for y services." I'm not here to be a class warrior. As I've already stated, profit-driven health insurance business models are not sustainable nor lucrative. Also the profit model subverts public policy, because the field makes money off sick people, so the more sick people, the better. It's all about turnover, people. We can't expect businesspeople to be philanthropists. There is a time and a place to be profit driven, and that place just is not healthcare. It never was.

So here's my idea. Being that I am not at all qualified to evaluate responsible health policy in this country, I think I have as good a shot as most politicians.

I recently went to a little meet and greet breakfast at Worcester Temple Beth Am to meet my local candidates for state senate. I ran into an old fellow, Gerard, and we got to chatting politics. Gerard told me that Taiwan recently moved to a public health care model. According to my new friend, the Taiwanese travelled around the world to find the most efficient model of administrating health care. And they chose Medicaid. In the interest of full disclosure, I have not confirmed this fact.

Medicaid, as I understand, is a state-administrated health care provider for low-income people. It differs from Medicare, as Medicare is federally administrated, and available to the elderly. Hence, low income elderly people sometimes get stuck in the middle.

A state administrated program seems like a better approach to me than a federally adminstrated program. Many states already have some kind of public health, and the states could try different things and learn from each other. Also, state policies are closer to the consumer, and tend to be less bureaucratic and more accessible. I do believe the public health program should be federally subsidized, but I believe the states would be more effective administrators. According to Gerard, the Taiwanese agree.

Now, as progressives, we have to fight the urge to demonize private industry. These companies provide jobs and reasonable benefits and income to many Americans, and right now is not the time to be abruptly robbing the health insurance companies of market share. We need to acknowledge that a sudden shift in the economy can be extremely disruptive, and develop a long view to a single payer system. A lot of progressives disagree with me on this, and they can go pound sand. Nothing happens overnight. The suffragists worked for over a century!

So, my idea is annually raise the cap of income eligibility for Medicaid. Year one, kids under 12. Year two, income eligibility ceiling goes up $10,000. Or the next 1% of incomes. And on until everyone is covered. Each increase should be coupled with tax increases on the newly eligible classes. The idea is that you take your health insurance costs and pay them in income tax instead as you move away from your private company to a public provider. I'm sure the GAO would have a field day with these numbers, but you get the idea.

And that brings me to a little diatribe about one current plan. Robert Reich, whom I respect immensely, has suggested that we should tax employer benefits to fund a public model. Correct me if I'm wrong, but isn't that self defeating? The more people move away from a private to a public market, the more money you need for the public market, the less money you have. Am I missing something?

Would love to continue discussion with anyone who cares.