Friday, May 30, 2008

180 Degrees on Universal Healthcare

Read how when government moves itself out of the way, good things happen. Open up the market, let consumers educate themselves, give them choices and uninsureds will go down with costs while options, coverage and service will improve. It's called capitalism and its still the best system...even for health care.

The Sunshine State has about 3.8 million people without insurance, or about 21% of the population, the fourth-highest rate in the country. The "Cover Florida" plan hopes to improve those numbers by offering access to more affordable policies. As even Barack Obama says, the main reason people are uninsured isn't because they don't want to be; it's because coverage is too expensive.

But the Florida reform, which both houses of the legislature approved unanimously, renounces Mr. Obama's favored remedy: It nudges the government out of the health-care marketplace. Insurance companies will be permitted to sell stripped-down, no-frills policies exempted from the more than 50 mandates that Florida otherwise imposes, including for acupuncture and chiropractics. The new plans will be designed to cost as little as $150 a month, or less.

Mr. Crist observed that state regulations increase the cost of health coverage, and thus rightly decided to do away with at least some of them. It's hard to believe, but this qualifies as a revelation in the policy world of health insurance. The new benefit packages will be introduced sometime next year and include minimum coverage for primary care and catastrophic expenses for major illness.

These government rules are imposed without regard for how much they will cost and who will bear the burden.

Governor Crist is to be credited for removing this artificial, regressive floor on plans. It's a simple matter of equity.

Mitt Romney should have taken this route in Massachusetts, but fell instead for the siren song of "universal coverage," even if provided by the government.

Some 13 states currently offer bare-bones policies on a full or trial-run basis. While not a cure-all, they're movement in the right direction – especially as the states can't do anything about the continuing tax bias for employer-provided health insurance. That kind of much-needed change can only come from Washington, as John McCain is proposing.

The Florida success also shows the political benefits when Republicans talk seriously about health care. Mr. Crist has made increasing consumer choice a signature issue. When Mr. McCain talked up his health-care reforms earlier this spring, he did so in Tampa. He chose the right state.

New Jersey is about the last place one might think to look for free-market policy reform. But this week Jay Webber, a Republican Assemblyman in Trenton, will introduce legislation to let Garden State residents buy low-cost health insurance from any registered policy in any of the 50 states.

Mr. Webber's proposal is a state version of Arizona Congressman John Shadegg's federal legislation to let individuals buy insurance across state lines, and John McCain has also endorsed the idea. But New Jersey would be a perfect test case, because its multiple mandates have made insurance too expensive for hundreds of thousands of families.

The average national cost for a family health plan is $5,799, according to America's Health Insurance Plans, but in New Jersey that same plan costs $10,398 on average. The state's politicians have driven up these costs by forcing insurers to provide gold-plated coverage – even for such voluntary medical services as in vitro fertilization. New Jersey also follows New York and Massachusetts – two other high-cost states – in requiring so-called "guaranteed issue." That allows New Jersey residents to avoid buying health insurance until they get sick, which means they can avoid paying premiums until they need someone to pick up the bill.

This one-policy-fits-all system tends to cause the young and healthy to drop insurance, which only raises the cost of insurance for the sick, which in turn makes coverage unaffordable for ever more families. It's no accident that about 1.2 million people – one of every eight residents – is uninsured in the state.

Under Mr. Webber's choice proposal, New Jersey residents could buy policies chartered in more enlightened states. For example, a healthy 25-year-old male could buy a basic health plan in Kentucky that now sells for $960 a year, about one-sixth of the $5,880 it would cost him in New Jersey. Residents of Pennsylvania pay health premiums that are one-half to one-third as high as do Garden State policy-holders. A new study by the National Center for Policy Analysis estimates that the availability of lower cost plans would reduce by 25% the number of uninsured.


jkruse said...

From the Sun-Sentinel:

"Health insurance companies will offer policies for $150 a month or more, in exchange for an exemption from the 50-plus mandates in current law that require insurers to cover items ranging from bone marrow transplants to acupuncture.

The plans — which aren't the "Cadillac of coverage," as Crist concedes — would cover some health screenings, doctor visits and office surgeries, but not medical attention that requires a specialist or prolonged hospital stays."

A bone marrow transplant is a lot different than chiropractic coverage mentioned in the WSJ. So essentially, the free market solution is to happily take your $150/month and kick your a$$ to the curb when you really get sick. Who pays for the BMT, chemo, or surgery? I'm guessing the 19 to 25 year old who was recently in good health (and opted for bare-bones insurance) isn't going to have an extra hundred grand laying around.

Bike Bubba said...

Kruse, with the exception of the few sane Americans who actually save money, I would have to guess that virtually everyone who ends up with a really serious illness eventually ends up billing it to Medicaid already.

I don't have the figures, but in a nation where something like 70% of wives work, and 95% of all single adults work, that when medical care gets expensive, it's by and large not taken care of by standard insurance plans.

jkruse said...

I would have to guess that virtually everyone who ends up with a really serious illness eventually ends up billing it to Medicaid already.

Isn't that socialized medicine? If Medicaid (the government) is paying to treat all serious illness how come there are still cancer centers operating in the U.S.? I would think they'd have gone on to do something where they can make money. I'd be interested in seeing your figures when you do have them.

In the mean time, you can explain to me what function private insurance companies are fulfilling.

Bike Bubba said...

Yup, it is, unfortunately. And yes, insurance has come a long way from when it simply covered the "major medical" issues that really weren't "your fault."

My point was merely that the objection "get really sick and you're on your own" is more or less true no matter what kind of insurance you've got. That's been the case really since 1945, when the federal government allowed employers to provide it.

My take; I'd love to take the $6-10k my employer pays each year, get major medical, and self-insure from the day to day stuff. I had it for a few months while unemployed, and it was awesome.

It was also affordable, so if I had gotten hurt somehow, I could have continued payments and they would NOT have been kicking me out on the sidewalk for Medicaid to pick up.

jkruse said...

I think you continually fail to understand that catastrophic disease is the part that makes insurance expensive.

The Florida plan explicitly demonstrates that very fact. For $150/month they're going to cover checkups and wart removal. Nothing else. These policies don't drop you because you're not making the payments. They drop you because if you're sick you're not profitable.

And, as more healthy people move to minimal plans like this, the problem compounds for people who are sick. Insurance is about pooling risk, and if all the healthy people opt out the system doesn't work. (And don't trot out some crap about sick people being responsible for their own dilemma, either.)

Bike Bubba said...

Well, this isn't what I'd want, but I did look up a "major medical only"/high deductible Blue Cross policy here in MN--$100/month for nonsmoking middle aged guy.

You know, what insurance was SUPPOSED to be for--the big stuff, not oil changes?

Bike Bubba said...

Well, this isn't what I'd want, but I did look up a "major medical only"/high deductible Blue Cross policy here in MN--$100/month for nonsmoking middle aged guy.

You know, what insurance was SUPPOSED to be for--the big stuff, not oil changes?

jkruse said...

So I glanced at the blue cross page, and it looked like all the policies were pretty similar in price.

Maybe I didn't look hard enough...