5 steps to fixing our healthcare system

[dgoldenz]

Everyone always asks "how would you do it?" Well, here's how I'd do it in 5 steps. Many details would have to be hammered out, but it's a solid start if you ask me. Criticize, argue, do what you wish:

1. Eliminate employer-sponsored healthcare system. Employers may still contribute to pre-tax savings funds for employees. At age 60, any money left in such funds work like a Roth IRA and are non-taxable, fully transferable to employee. Massive incentive to preserve accumulated employer contributions instead of spending them on unnecessary care.

2. Guaranteed issue coverage for everyone from birth to death. Anyone who tries to game the system is subject to a fine equal to either 5% of income or $5,000, adjusted for inflation, for treatment needed for pre-existing conditions to those who do not have continuous coverage with no break of more than 63 days. Anyone with continuous coverage may jump from plan to plan with a higher deductible and max out of pocket cost. Jumping to a plan with lower deductible if you cannot pass underwriting and max out of pocket requires another penalty equal to 5% of income or $5,000, or the difference between the old deductible and new one (e.g. going from $10k deductible $2500 would require $7500 penalty). No penalties for not carry coverage, penalties described above double for those who have had no creditable coverage for more than 365 days.

3. Tort reform. Allow damages up to the amount of dollars in damages caused plus 50%, plus punitive damages up to $500k, adjusted for inflation.

4. Offer tax credit of $1,500 per family or $750 per individual, adjusted for inflation, for anyone who purchases a policy for which no benefits are payable (except preventative care) until the deductible has been reached.

5. Offer a 150% tax deduction for any contributions made to a health savings account. As an example, a $1000 contribution allows for a $1500 tax deduction. HSA rules remain the same where they are only compatible with plans that do not pay benefits before deductible for anything other than preventative care. If you choose a plan that is not HSA-compatible, you get no deduction.

So those are my ideas, argue as you wish. I didn't write a 2700 page bill and don't have all the answers, but the above surely would be a good start in my opinion. Thanks for reading.

 

[obgyn65]

+1

3. Tort reform. Allow damages up to the amount of dollars in damages caused plus 50%, plus punitive damages up to $500k, adjusted for inflation.

 

[Purron]

1. Eliminate employer-sponsored healthcare system. Employers may still contribute to pre-tax savings funds for employees. At age 60, any money left in such funds work like a Roth IRA and are non-taxable, fully transferable to employee. Massive incentive to preserve accumulated employer contributions instead of spending them on unnecessary care.

We're already heading in this direction. It seems like we hear about another employer giving up on sponsoring health care just about every day now. The relatively small percentage of employees who have an affordable health care plan that carries over into retirement tend to hang onto their jobs come hell or high water.

One of the biggest hurdles would be the Federal Government. If they made this change, I believe many others would follow suit and the employer-sponsored system would fall apart.

 

[dgoldenz]

We're already heading in this direction. It seems like we hear about another employer giving up on sponsoring health care just about every day now. The relatively small percentage of employees who have an affordable health care plan that carries over into retirement tend to hang onto their jobs come hell or high water.

One of the biggest hurdles would be the Federal Government. If they made this change, I believe many others would follow suit and the employer-sponsored system would fall apart.

The employer system needs to fall apart because there is no reason for it and it greatly prohibits competition in the market and availability of plans to the employees. There is a difference between employers dumping plans so that employees can get insurance subsidized by taxpayers, and employers dumping plans so people can buy coverage on their own, and making a contribution towards an account. Think of it as a "Super HSA"

 

[donheff]

The tie to employment is destructive. The Wyden/Bennett bill would have done something similar but it never got anywhere. It was bipartisan but got bipartisan opposition. Too many vested interests.

 

[Emeritus]

+1

I'm a lawyer, DW is a physician. I've taught health care risk managment and taught physicians how to avoid committing malpractice not merely trying to avoid malpractice litigation.

Defective care in the medical system is routine and contributes a great deal to medical costs, totally apart from malpractice costs. You have to attack the defective care which is the disease, not just tort liability which is merely a symptom.

My father in law died of hospital acquired MRSA. In his case he had terminal cancer so it did not affect his life expectancy. But the same infection was hitting younger people with better prognoses.

Health care systems that fully internalize the cost of medical injuries tend to have much more efficient internal controls to avoid iatrogenic diseases. Any "tort reform" must have such quality controls or you will just get the medical equivalent of uninsured drivers.

 

[explanade]

These points sound like what McCain ran on.

Is employer-provided health insurance the biggest source of coverage for Americans?

How do you go from that to everyone having to find coverage for themselves. Without group rates, are premiums going to be more reasonable?

Or everyone gets low-premium, high-deductible plans and only go see the doctor or make claims in catastrophic situations?

 

[Emeritus]

The employer system needs to fall apart because there is no reason for it and it greatly prohibits competition in the market and availability of plans to the employees. There is a difference between employers dumping plans so that employees can get insurance subsidized by taxpayers, and employers dumping plans so people can buy coverage on their own, and making a contribution towards an account. Think of it as a "Super HSA"

boy , talk about reinventing history. Employee medical insurance was invented by Krupp so they would have healthy employees and keep out unions .

" From the outset Alfred Krupp strove to create and maintain a loyal set of highly skilled employees. Only thus could he guarantee the high quality of his products. To alleviate the social problems caused by industrialization he introduced employee welfare schemes, at the same time enjoining his workers not to become involved in trade-union or social-democratic activity. As early as 1836 he set up a voluntary sickness and burial fund, which became a compulsory sickness and death benefit insurance scheme in 1853."

Thyssen Krupp AG -- Company History

De-skilling and effective piecework engineering are what allow industries to outsource jobs. The higher profits get divided among management, workers and investors. The USA model is low pay for workers and high pay for managers. In the USA model company loyalty has no value. Employees are essentially "day labor". De-skilling of jobs and effective "union busting" in the USA eliminates the need for employers to offer health insurance, so they don't want to. Its the same as pensions. But the connection is historical and deep into the 19th century.

 

[Texas Proud]

One of the problems with the proposal is it will be viewed as giving tax breaks to the rich...

A deduction for someone who pays NO income tax is not worth anything...

Are credits given to everybody And why only $1500 to 'family'... what is you have a family of 5 kids and 2 adults.... their insurance will cost more than a family of just 2 adults... (remember, since they are not connected to employment they charge you for every person on the policy)

I am not clear on why you want to penalize someone from going from a high deductible plan to a low deductible plan... maybe the cost of the low plan has changed where it is now more attractive than the high... without any medical cause for doing it... AND, if there is a cronic medical condition that cost a lot of money over the rest of your life... paying the penalty is nothing compared to the savings over the next 30 to 50 years...

 

[samclem]

- I'd like to see a standardization of plan types among the private insurers (as is done with Medicare supplemental insurance). Sure, insurers could offer extras over and above the minimum for each plan type, but they would compete against each other as "meeting Plan T standards" or whatever. The medical insurance product is complicated, this standardization increases market efficiency and drives down prices due to enhanced competition. I also think it benefits everyone if these plans have to contain some items that are proven giant cost-savers for the health-care system in general (vaccinations, various communicable disease prevention measures, etc)

- I think the government could provide a useful role in reporting on customer satisfaction with various insurers and plan types. Also, they could report on outcomes of various procedures at various providers. I know this is harder than it sounds, especially if some providers take patients who start out sicker or with more complicated cases than others, but the very large differences in health outcomes and costs among various providers merits some reporting. This "info clearinghouse" job by the government is intended, again, to improve the system through market forces. Consumer Reports can effectively report on auto quality, but I'm not sure any non-governmental agency could take on a task this big, especially as we don't have a good mechanism to charge customers for information in the digital age.

- I think the government subsidies will need to be higher than you've proposed (for political reasons)

- I'm wrestling with the need for underwriting and medical exams. I think we can get away from this with other carrots/sticks to induce people to buy insurance and make insurers take everybody.

 

[ziggy29]

The employer system needs to fall apart because there is no reason for it and it greatly prohibits competition in the market and availability of plans to the employees.

Not only that, but I think it destroys the entrepreneurial spirit through the "golden handcuffs." I'll bet there are a lot of enterprising people who have good ideas and the desire to leave their jobs and pursue it -- but can't risk losing Megacorp health insurance to follow the dream.

 

[Midpack]

It's a good place to start. If #1 would happen, it would probably trigger everything else.

Everyone knows we're on an unsustainable path, but we can't agree on a new path (welcome to Congress), so nothing changes. So let's go with your plan and acknowledge,

• that we'll have to make some course corrections along the way,
• that there is no ideal system but it could be better (like every other developed country figured out before us)
• that there are lots of issues, not just one
  • lifestyle (obesity, smoking, drugs)
  • high cost and profit for intermediaries (insurance)
  • excessive profit for some product and service providers
  • administrative burden (millions of microplans)
  • high charges for specialized services
  • forced use of expensive specialized facilities for routine medical needs (emergency room)
  • multiple regulations around the country
  • punitive legal awards
  • diagnostic overuse (expensive tests even for routine matters)
  • treatment overuse (especially end of life)
  • excessive unproductive labor vs technology
  • excessive usage
• and, quit letting 'the perfect be the enemy of the good.'

But it won't happen until the current system fails completely...until then we're too busy watching Dancing with the Stars reruns.

Ironically, Obamacare may have put us on the new path...

 

[dgoldenz]

One of the problems with the proposal is it will be viewed as giving tax breaks to the rich...

A deduction for someone who pays NO income tax is not worth anything...

Are credits given to everybody And why only $1500 to 'family'... what is you have a family of 5 kids and 2 adults.... their insurance will cost more than a family of just 2 adults... (remember, since they are not connected to employment they charge you for every person on the policy)

I am not clear on why you want to penalize someone from going from a high deductible plan to a low deductible plan... maybe the cost of the low plan has changed where it is now more attractive than the high... without any medical cause for doing it... AND, if there is a cronic medical condition that cost a lot of money over the rest of your life... paying the penalty is nothing compared to the savings over the next 30 to 50 years...

Make the deductions a refundable tax credit for anyone who makes less than X amount of dollars. These are general ideas, I didn't write 2700 pages to define the ideas.

If you don't want to pay for something because you have five kids, then you shouldn't have had five kids! Replace the numbers with whatever you think would be reasonable. It's the concept, not the numbers.

You would penalize someone from moving from a high deductible to a lower deductible plan IF they could not pass medical underwriting. If they can pass, no problem, no penalty. That would be more likely to stop people from choosing a $10k deductible and then changing to a plan with a $500 deductible when they find out they have a problem.

You could do this without medical underwriting, but it would make everything more expensive as most people know.

 

[dgoldenz]

Oh, and the "Super HSA" concept would also apply to everyone, not just people with employers contributing. No reason the self-employed shouldn't get the same deal.

 

[FinanceDude]

Everyone always asks "how would you do it?" Well, here's how I'd do it in 5 steps. Many details would have to be hammered out, but it's a solid start if you ask me. Criticize, argue, do what you wish:

1. Eliminate employer-sponsored healthcare system. Employers may still contribute to pre-tax savings funds for employees. At age 60, any money left in such funds work like a Roth IRA and are non-taxable, fully transferable to employee. Massive incentive to preserve accumulated employer contributions instead of spending them on unnecessary care.

2. Guaranteed issue coverage for everyone from birth to death. Anyone who tries to game the system is subject to a fine equal to either 5% of income or $5,000, adjusted for inflation, for treatment needed for pre-existing conditions to those who do not have continuous coverage with no break of more than 63 days. Anyone with continuous coverage may jump from plan to plan with a higher deductible and max out of pocket cost. Jumping to a plan with lower deductible if you cannot pass underwriting and max out of pocket requires another penalty equal to 5% of income or $5,000, or the difference between the old deductible and new one (e.g. going from $10k deductible $2500 would require $7500 penalty). No penalties for not carry coverage, penalties described above double for those who have had no creditable coverage for more than 365 days.

3. Tort reform. Allow damages up to the amount of dollars in damages caused plus 50%, plus punitive damages up to $500k, adjusted for inflation.

4. Offer tax credit of $1,500 per family or $750 per individual, adjusted for inflation, for anyone who purchases a policy for which no benefits are payable (except preventative care) until the deductible has been reached.

5. Offer a 150% tax deduction for any contributions made to a health savings account. As an example, a $1000 contribution allows for a $1500 tax deduction. HSA rules remain the same where they are only compatible with plans that do not pay benefits before deductible for anything other than preventative care. If you choose a plan that is not HSA-compatible, you get no deduction.

So those are my ideas, argue as you wish. I didn't write a 2700 page bill and don't have all the answers, but the above surely would be a good start in my opinion. Thanks for reading.

I like it a lot, but it would never work, it is simple and common sense in nature, so that would never fly in Washington.........

Also, there's no pork in your bill, how ya gonna get that passed?

 

[landonew]

boy , talk about reinventing history. Employee medical insurance was invented by Krupp so they would have healthy employees and keep out unions .

" From the outset Alfred Krupp strove to create and maintain a loyal set of highly skilled employees. Only thus could he guarantee the high quality of his products. To alleviate the social problems caused by industrialization he introduced employee welfare schemes, at the same time enjoining his workers not to become involved in trade-union or social-democratic activity. As early as 1836 he set up a voluntary sickness and burial fund, which became a compulsory sickness and death benefit insurance scheme in 1853."

Thyssen Krupp AG -- Company History

De-skilling and effective piecework engineering are what allow industries to outsource jobs. The higher profits get divided among management, workers and investors. The USA model is low pay for workers and high pay for managers. In the USA model company loyalty has no value. Employees are essentially "day labor". De-skilling of jobs and effective "union busting" in the USA eliminates the need for employers to offer health insurance, so they don't want to. Its the same as pensions. But the connection is historical and deep into the 19th century.

Perhaps that is why Employer provided healthcare was "invented", but that is not why it became so prevalent in our country.

It is a well accepted historical fact that Employer provided healthcare expanded during WWII as a way to avoid federal wage controls.

Health insurance in the United States - Wikipedia, the free encyclopedia

Employer-sponsored health insurance plans dramatically expanded as a result of wage controls during World War II.[6] The labor market was tight because of the increased demand for goods and decreased supply of workers during the war. Federally imposed wage and price controls prohibited manufacturers and other employers raising wages high enough to attract sufficient workers. When the War Labor Board declared that fringe benefits, such as sick leave and health insurance, did not count as wages for the purpose of wage controls, employers responded with significantly increased benefits.[6]

Funny how private industry invariably finds ways to usurp the overregulation of government.

 

[Automatika]

....Or everyone gets low-premium, high-deductible plans and only go see the doctor or make claims in catastrophic situations?

Sounds good to me, kind of like "Major Medical" used to be. I could never understand why insurance was set up to cover routine visits. Seems like it would just add a layer of cost and paperwork to the system.

 

[explanade]

Because if people had to pay out of pocket for 5-minute doctor's visits which cost $100, then people would make fewer doctor's visits and then problems which might have been detected or prevented become much more expensive to treat.

 

[samclem]

Because if people had to pay out of pocket for 5-minute doctor's visits which cost $100, then people would make fewer doctor's visits and then problems which might have been detected or prevented become much more expensive to treat.

The problem right now is that they are, too often, "doctor visits," and conducted in an extremely expensive environment. Insurance pays (e.g. we all pay) for this. A PA or nurse practitioner could see these patients in a small local clinic much less expensively, referring cases as needed. The cost would be quite low, especially if we rid ourselves of the insurance paperwork/billing costs. This model of treatment can develop once we treat this very lowest level of care as we treat other commercial purchases--as a straight exchange between the customer and the provider. We're not talking about open heart surgery here, it's just normal routine complaints and questions that most folks could easily pay for if the costs were not hopelessly inflated by the present delivery system.

If we begin by asking why it now costs $100 for a quick visit we'll be much closer to achieving a solution to our issues than if we just figure out how, as a society, we can keep paying $100.

 

[Nords]

It's a good place to start. If #1 would happen, it would probably trigger everything else.

• that we'll have to make some course corrections along the way,
• that there is no ideal system but it could be better (like every other developed country figured out before us)
• that there are lots of issues, not just one
  • lifestyle (obesity, smoking, drugs)
  • high cost and profit for intermediaries (insurance)
  • excessive profit for some product and service providers
  • administrative burden (millions of microplans)
  • high charges for specialized services
  • forced use of expensive specialized facilities for routine medical needs (emergency room)
  • multiple regulations around the country
  • punitive legal awards
  • diagnostic overuse (expensive tests even for routine matters)
  • treatment overuse (especially end of life)
  • excessive unproductive labor vs technology
  • excessive usage
• and, quit letting 'the perfect be the enemy of the good.'

Many of the healthcare solutions appear to be embodied in the miitary's active-duty/Reserve Tricare*, which ironically the DoD says they can no longer afford.

*Especially if we add in mandatory random urinalysis...

 

[explanade]

Sure there is over-utilization and I agree about the insurance paperwork. In fact, that accounts for at least 25% of health care spending, the administration and processing of insurance. Some doctors have full-time staff just to handle that.

But if people pay out of pocket, they may not go for routine exams and screenings.

In any event health care reform kept the insurers in place so they missed a big chance for cost savings. But the plan hasn't been fully implemented so all this discussion is moot. We're going to have to let it take effect and see if things improve.

 

[samclem]

We're going to have to let it take effect and see if things improve.

 

[dex]

2. Guaranteed issue coverage for everyone from birth to death. Anyone who tries to game the system is subject to a fine equal to either 5% of income or $5,000, adjusted for inflation, for treatment needed for pre-existing conditions to those who do not have continuous coverage with no break of more than 63 days. Anyone with continuous coverage may jump from plan to plan with a higher deductible and max out of pocket cost. Jumping to a plan with lower deductible if you cannot pass underwriting and max out of pocket requires another penalty equal to 5% of income or $5,000, or the difference between the old deductible and new one (e.g. going from $10k deductible $2500 would require $7500 penalty). No penalties for not carry coverage, penalties described above double for those who have had no creditable coverage for more than 365 days.

I don't understand this part. Does it mean everyone must have coverage and they pay for it?

 

[Automatika]

Sure there is over-utilization and I agree about the insurance paperwork. In fact, that accounts for at least 25% of health care spending, the administration and processing of insurance. Some doctors have full-time staff just to handle that.

But if people pay out of pocket, they may not go for routine exams and screenings.

In any event health care reform kept the insurers in place so they missed a big chance for cost savings. But the plan hasn't been fully implemented so all this discussion is moot. We're going to have to let it take effect and see if things improve.

Not going for routine checkups and screenings is like not getting your car serviced. IMO, paying into the system so that it can be redistributed as an incentive to take care of yourself is social engineering. I do agree that something needs to be done, especially for those who can't afford insurance. We will indeed have to see, though I don't hld out much hope...

 

[dgoldenz]

I don't understand this part. Does it mean everyone must have coverage and they pay for it?

You would not required to have coverage under what was noted. However, if you do not purchase a policy and then seek care for pre-existing conditions, you would pay a penalty for that. If you have not had any coverage for a full year, the penalties would double if seeking care for pre-existing conditions. I don't know how that would be administered, but I also don't know how some of the risk pools available today that require waiting periods do it either if they aren't asking any medical questions.

One of the problems with guaranteed-issue coverage is if you have a $5k deductible and then find out you will need surgery in two months, you could change to a $500 deductible policy, get the surgery done, then go back to a $5k deductible. Having a penalty equal to the difference would stop that abuse from happening, or at least as frequently as it would under the system set up for 2014.