US Healthcare

Senator Sander’s Single Payer Proposal

I am not getting behind Senator Sander’s proposal. So far, only the delivery side of his proposal has been put forward. We are still waiting to see what the revenue side of his proposal looks like. There are, however, analyses of Sander’s Medicare for All proposal from his presidential campaign. The Urban Institute and the bipartisan Tax Policy Institute project his plan will increase federal spending by $32 trillion over the first 10 years. They estimate Sander’s revenue proposals would raise $15.3 trillion over the first decade. Their conclusion is ,”The proposed taxes are much too low to fully finance the plan.”

I support achieving universal healthcare in our country but I am more of a gradualist. (Because that is probably the only way it is going to happen.) I support more modest steps like those of Senator Sherrod Brown (D-OH). He would allow Americans to buy into Medicare when they reach 55. An even more politically feasible step would be to allow people to enroll in Medicare Advantage when they reach age 55. Considering that well regulated insurance companies compete in this program, Republicans may be more likely to support this reform of Medicare sooner rather than later.

Cost of Healthcare

The healthcare debate can be considered as two questions:  “How do we pay for it?” and “Why does it cost so much?”  “How do we pay for it?” is the question we spend most of our time on.  “Why does it cost so much?” arises from the fact that we spend 50-100% more per person than other industrialized countries with no better health outcomes on average. (U.S ranks 35th in healthcare outcomes among industrialized countries.) The U.S may have the best healthcare in the world. But we have poor access to healthcare relative to other economically developed countries. This is because of the cost of healthcare.

 

Why do Americans pay 2-3 times more for joint replacements?

Why do Americans pay 2-4 times more for child births?

Why do Americans spend 50% more for prescription medicines?

Why do new technologies in healthcare not become less expensive over time while new technologies in other parts of the economy do become less expensive over time (e.g. calculators, computers)?

“Why does it cost so much?” is in no way an indictment of the dedicated healthcare professionals we all encounter.  It comes from an objective observation of the numbers.

In 1960 the U.S. spent 5% of its GDP on healthcare. Today we spend 17, 18, 19% of our GDP on healthcare. If we spend 22%, 23% of our GDP on healthcare, will that achieve quality healthcare we can afford?

The government can’t afford the cost of healthcare. Employers can’t afford the cost of healthcare. Most individuals can’t afford the cost of healthcare.

The Affordable Care Act recognized the problem of high healthcare costs and contains pilot programs to attempt to control costs. The Wall Street Journal has noted that efforts to shift Medicare to “advanced payments models” (e.g.”bundled payments” for a course of treatments) is proving effective in reducing Medicare costs. Unfortunately (inexcusably) the Trump administration is winding down these efforts. This is not an evidence based approach to healthcare. It seems to be a straight forward attempt to simply sabotage the ACA.

If delivery innovations are not successful in reducing medical costs, the regulatory authority of a single payer system may be our best hope for controlling these costs.

 

Common Ground on Healthcare

 

Both parties recognize that healthcare in our country is too expensive for lower and even middle income earners.  The Affordable Care Act (ACA) addresses this by subsidizing health insurance on a sliding scale.  Republican proposals use tax credits to make insurance affordable. These are not big differences.

 

Similarly, both parties should find common ground in enacting pricing transparency in healthcare.  Many of us are familiar with incoherent hospital bills with $300 bandaids and unexpected bills that keep dribbling in for months after a hospital stay.  Republicans are certainly all for pricing transparency to facilitate free market choices.  With Democrats, some cost transparency is already a part of the ACA.  In May 2013 HHS ordered the release of hospitals’ chargemaster prices for inpatient services along with what Medicare pays for those services.  Both parties should work toward every healthcare facility establishing easy to use price lists that eventually include available prepaid prices for self payers with high deductibles or catastrophic insurance policies.

 

Republican Record on Healthcare

 

Prior to 2009 the last major effort to reform healthcare was by President Clinton in 1993.  That effort was effectively killed by Republicans.  What was the alternative Republican plan to control costs and reform increasingly dysfunctional health insurance?  There was none.  The status quo was just fine.

 

From 2001 to 2006 Republicans controlled the House, Senate, and White House.  They could have enacted any of the reforms that some of them (a few) now champion.  (Republicans did enact subsidized prescription drug coverage.  But the $67 billion program continues to be unfunded, adding to our country’s debt, because funding it would have required almost every Republican breaking their no-new-taxes-Grover Norquist pledge.)

 

President Obama did the country a great service by putting the healthcare issue in front of the U.S. Congress.  No Republican had lifted a finger to address our crying need for healthcare reform until President Obama told Congress to get it done.

 

Darrel’s Proposals

 

I want to work to make the ACA the best it can be.  It is definitely progress in the effort to improve our country’s healthcare.  Even the ACA’s most ardent supporters, though, have things they want changed in the law and so do I.*  However, the Republican controlled congress shows no interest in helping the ACA work better for our country which makes improving the law very difficult.

Here is my list, to date, of what I want to change:

 

–          Drop the employer mandate.  This is a drag on creating jobs.  Our country should be moving away from linking health insurance to employment, not increasing that relationship.  If business wants to offer health insurance to attract and keep workers, fine.  But let that be an employer’s own decision.   (99% of businesses with over 200 employees already have been offerring health insurance, 91% for businesses with 50-199)  I would maintain the individual mandate.

 

–          Businesses should be able to contribute to employees’ portable individual plans with the same employee tax benefits that employees receive through group plans.  (This is a change to tax law outside of the ACA.)

 

–          As long as there is an employer mandate, change the standard for full time to 40 hours/week from 30 hours.

 

–          Offer “essential health benefits” as options on a cost/benefit basis.  (Maintain the “insurance standards” of no annual or lifetime benefit limits, no exclusions or premium disadvantage based on preexisting conditions or sex, allowing children under 26 to remain on their parents’ policy.)

 

–          Allow premiums to reflect the normal actuarial cost spread between old and young (6to1) instead of the mandated spread(3to1)  (i.e. Don’t burden the young disproportionately with healthcare costs.)

 

–          Eliminate the cuts to Medicare which are basically cuts to the subsidies to Medicare Advantage plans.  We need to maintain viable private plan options within Medicare as well as conventional Medicare.  This is the principle of “not putting all your eggs in one basket”.

 

–          Repeal the tax on premiums insurance companies collect.  It discriminates against small business and individual policies.  The CBO says the tax will largely be incorporated into premiums.  Large employers who self insure will be spared the increases.  Medicare premiums are not taxed but Medicare Advantage premiums are taxed.  There is a bipartisan bill in the House to repeal this tax.

 

–          Allow the government to negotiate lower Medicare prescription drug costs comparable to those available in other countries.  (This pertains to Medicare part D and not the ACA.  Republicans agreed to this drug maker loophole when enacting Medicare part D.)

 

I want to make the ACA work.  But, neither, am I married to this reform if better improvements are brought to the table.  I don’t have a CBO to score the cost of these changes.  They are based on principle.

 

Ideally, I believe our country should work toward health insurance that is individual, portable across jobs and providers, life long, and guaranteed renewable (Meaning you have the right to continue with no unusual increase in premiums if you get sick.  I see no way around an individual mandate as the way of dealing with the issue of preexisting conditions.).  Insurance should protect against large(or chronic), unseen health expenses, rather than be an inefficient payment plan for routine expenses.

 

 

*Remember, the ACA that we have was never intended to be the final healthcare reform bill.  The Senate passed its version of the bill Dec. 24, 2009.  The Democrat controlled House had intended to pass its version. Then more of the bill’s details would have been finalized in a conference committee.   However, the special election of Scott Brown R-MA in Jan 2010 made passage of a conference bill doubtful in the Senate.  So the House simply passed the Senate version “as is”.  There was no opportunity to “fine tune” the bill.

 

Medicare

 

The ACA has provisions for experiments in efficiencies and cost containment.  The ACA establishes an Independent Payment Advisory Board to study and advise regarding best medical practices.  These are appropriate efforts to hold down Medicare costs.

 

The big question is whether government (Medicare) can hold down costs by its shear size and authority more effectively than more patient controlled approaches.  In 2011 Paul Ryan (R-Wi) proposed changing Medicare to a “premium support” program.  In 2012 Sen. Ron Wyden (D-Or) collaborated with Ryan to make changes to the Ryan plan.  Sen. Wyden’s changes made the “premium support” more generous and kept traditional Medicare as a permanent option for seniors.  A variation of this would be to enter seniors into “premium support” from age 65 to 70 (or some age) and then have the option to move to traditional Medicare.

 

The point is, no one knows which approach will best control costs.  Let the approaches “compete”.  We already do this somewhat with Medicare Advantage.  I, like Sen. Wyden, would never support going solely to “premium support”.  Not every senior has family to help them shop for health insurance into their very latter years.

 

Parties in the Senate Health Committee are really not far apart on this.  In the 1990’s prominent Democrats like Sen. John Kerry supported “premium support” proposals.  Senator Wyden was very correct in saying, “The big issues require bipartisan buy-in” or you don’t get good policy.