A Reboot for the Health Care Debate

I agree with most of what President Obama's health care plan calls for. However, I do not agree with the creation a full-on government-run health plan to compete with insurance. An insurance company that receives its funds via our taxes (rather than having to actually earn it) would essentially wipe out all other insurance companies...with the end result being a single-payer government health plan. Whether or not this is the actual goal of the left is not really important, is it? With a government plan, it is the end result - not just the first step - that should be considered.

What I see as the big issue no one is addressing is that insurance is supposed to be about spreading risk. However, health insurance companies don't really spread risk - not evenly anyway. They give breaks to what their actuaries see as "healthy people" and jack up prices, deny coverage and/or summarily terminate policies for what they see as "unhealthy people". Insurance companies also give huge premium breaks to large corporations while small businesses and individuals have no such advantage. This disparity in premiums can be addressed by Congress.

Additionally, there are other problems that can be addressed by law without creating another federal bureaucracy. Here are some ways I see health care can be reformed:

1. Fairness in pricing:

a. By law, for any given insurance plan, an insurance company's rates must be made equal for all people. Yes, that means that "healthy people" will pay more and "unhealthy people" will pay less. By ensuring equal cost per plan, the consumer can make an informed decision without jumping through hoops full of paperwork and applications with each company to find out what their rate will be. If the premium for a plan is too high, the consumer can go elsewhere. This is where the administration's original Health Insurance Exchange program can help with consumer choice.

b. By law, for any given medical service, a healthcare provider must charge the same amount to all patients regardless of insurance plan or insured status.  No more sky-high pricing models for non-insured patients for the purpose of negotiating with insurance companies. 

2. Instead of assuming the burden of managing a health plan for employees and re-negotiating cost year after year, employers can simply subsidize the cost of whatever insurance the employee chooses via the Exchange. This reduces administrative burden on the employer. This also allows the employee to choose their own plan (as opposed to restricting them to the plan employer has chosen as in the current common model).

• A minimally acceptable dollar amount (TBD) of the employer subsidy should be tax-free to the recipient (i.e. the employee). Any subsidy amount above the minimum is taxable as income. (This is to keep employers from using the tax-free benefit to pay for "health plans" that might include services like elective plastic surgery, day spas, a three-meal-a-day "health food plan" or other perks not directly related to health care. In other words, no tax free "face lifts" or "healthy" slush funds for corporate executives.)
• The employee chooses the company and plan they desire. The employer's subsidy payment is paid to the insurance company via the Health Insurance Exchange. Any additional cost beyond the employer's subsidy is assumed by the employee and can be deducted from their pay and sent along with the employer subsidy. In this model the employer does not need to keep track of where to send each employees' insurance payments.  The employee manages their payments via the Exchange.
• A minimally acceptable dollar amount (TBD) paid as insurance premiums for each of an employee's dependents should be considered non taxable income.

3. Medicare is expanded to include unemployed persons receiving unemployment benefits, the disabled or otherwise indigent/unemployable citizens.

4. Providers continue to have the option of participating with Medicare or not. Providers whose local market share in their specialty exceeds an acceptable threshold (i.e. monopoly or near-monopoly) are mandated to participate with Medicare.

5. Insurance companies cannot terminate coverage for any medical reason. Once an application is accepted, they assume coverage for all health care of the covered persons under their plan.

6. The Federal Health Reinsurance Corporation (FHRC) is established to ensure the solvency of insurance companies and to act as a safety net for insurance companies that may go bankrupt. The FHRC has oversight authority of insurance companies and may prosecute individuals responsible for fraud or criminal negligence. (The FHRC is to the health insurance industry what the FDIC is to the banking industry.)

7. Small businesses shall receive sliding scale tax credits for payment of premium subsidies. The sliding scale is based on profit per employee. The higher the profit per employee, the lower the tax credit per employee.

8. Health care providers and drug companies may receive tax credits for providing quality care and free medication to uninsured persons under a Health Care Pay-It-Forward program. Provider tax credit (amount TBD, but should be on par with Medicare reimbursement rates) is dependent upon the quality of care. Quality is measured by comparing outcomes of a providers insured vs. non-insured patients. Significant discrepancies in quality measurements disqualify the provider from receiving any tax credit for that period. The federal government (agency TBD) has authority to audit any health records of non-insured patients covered under the program to ensure compliance with quality reporting guidelines and to abate fraud.