...The chief problem with our current healthcare system is an abundance of awkward and disruptive government interference. This has led to the dominance of a third-party-payment model which discourages cost-awareness and encourages over-consumption among health care consumers. Government pays for roughly half of our healthcare consumption, and of all third-party payment options, government is the one least
likely to be capable or willing to nimbly find ways to impose cost awareness on those capable of sending it bills. The result is a healthcare system in which costs rapidly spiral out of control (we have a similar problem in our higher education industry). Any system which does not alter that disruption and incentivize cost-awareness among consumers for the vast majority of medical purchases will not address the chief underlying flaw of our current system, and we will continue to see costs spiral outside of the control of the citizenry and government.
Reforms which have
pushed cost-awareness back onto consumers have demonstrated impressive results at lowering expenditures:
offered HSA's, - which have patients save money in tax-free accounts (where it grows and remains theirs forever and ever unless theys pend it) - matched with high deductible plans to it's employees. Employees began to respond to price signals, and medical costs per patient were reduced by 33% and expenditures to the state were reduced by 11%.
has instituted a program that gave financial incentives to people who engaged in healthy behavior by allowing price signals in the insurance
side of the market to work (Indiana worked on the medical side), and saw it's per-captia health care costs remain flat from 2005-2009; when most companies saw theirs jump by 38%.
instituted HSA's, and let's the employees choose what they want the company to fund. This institutes price pressure on the medical side (WF covers the high-deductible plan 100%), and their CEO points out that as a result Whole Foods' per-capita costs are much lower than typical insurance programs, while maintaining employee satisfaction.
Medicare Part D
utilized market pressure on the insurance side, and saw expenditures come in at 40% UNDER
expenditures - the only such government program in history to do so.
instituted HSA's, and saw the number of their employees who got preventative and annual checkup care climb even as they saw claims decrease by 14% (in one year).
low cost clinics and prescriptions save us oodles of cash. Wal-Mart reports that "half of their clinic patients report that they are uninsured" and that "if it were not for [Wal-Marts'] clinics they would haven't gotten care - or they would have gone to an emergency room".
Dr Robert Berry
runs a practice called PATMOS (payment at time of service). he doesn't take insurance at all - but simply posts the prices of his services. By removing the cost of dealing with mutliple insurance agencies, medicare, and medicaid, the prices he is able to list are one half to ONE THIRD
of industry standard.
A method is therefore needed of subsidizing these among us which does not enable poverty or create the tragedy of the commons that we currently face from our third-party-payer model. That is the central liberal truth that conservatives have to address for any proposal to gain bipartisan support, just as liberals must address the superior efficiency and results of the conservative structures vice third party payer (see above): some people cannot pay for their own healthcare and the rest of us have a moral
(if not a legal) responsibility to lend them aid.
It Is Therefore Proposed
that the United States thank the Laboratory of Democracy and build upon Indiana's success (Indiana has since expanded the HSA model from its public employees to Medicaid recipients
). Catastrophic coverage plans tied to HSA's should be subsidized on a sliding scale for our low income populace through the mechanism of a refundable tax credit in order to clear the Conservative objection of Constitutionality while ensuring the Liberal objective of universal coverage.
Any loss of benefit should be flat in order to ensure that for each additional dollar of income gained, less
than a dollar in subsidy is lost. In order not to punish those who are pushed by unemployment or any other of lifes' curveballs into government support, the tax treatment of employer and individually provided health care plans should be equalized by removing the employer deduction. The increased revenue that this brings is statically scored at $171 Bn
; which is roughly enough to provide roughly $4,275 to each of the "40 million uninsured".
However, since approximately a quarter to a third of those are illegal aliens - and we are in agreement that illegal aliens should not be subsidized at the expense of low-income workers who follow the law - the actual subsidy will rise to somewhere between $5,500 and $6,500 per individual. So, for example, a catastrophic coverage subsidy of $3,500 per person per year could be matched with an HSA donation of $1,500 per person per year, and still have room to either produce savings to the government or catch any losses from dynamic effects. HSA's will grow tax free and remain the individuals' property; though subject to tight control as regards withdrawals (as for example, are our 401(k)s, IRA's, ESA's, etc. today). Upon the death of the individual, these accounts will be taxed at a flat rate and then the remaining funds poured into the HSA accounts of the next of kin (excepting in cases of a spouse, in which no tax need be paid), providing an additional source of revenue to the government to cover our long-term old-age medical costs and allowing even the low-income among us to engage in intergenerational wealth building. In this way not only are we ensuring universal coverage (liberal goal), but we are helping our poor to build capital to escape poverty, and giving people incentives to make cost-effective decisions (conservative goal).
Individuals in Medicaid will be shifted to the same program. Currently 58 million
people are on Medicaid, at a cost of about $10,000 per person
. Assuming that the cost of administrating a much simpler program that covers more people is roughly the same, we can produce savings to the government of a couple hundred billion dollars. Or, in the negotiations, if this becomes a sticking point, those savings can stand in place of the loss of the employer provided healthcare reduction.
We can create universal coverage while ridding ourselves of a third-party-payment model and without exploding the government's budget. Conservative and Liberal goals are not
mutually exclusive, except to the extent that liberals refuse any option which does not lead to single payer and conservatives refuse any option which does not lead to the dismantlement of the social safety net....