Correcting some misinformation on medical care for the penniless

[kyounge1956]

I have no problem with a better bill. In fact I am very much in favor of changes. I just don't want to repeal the current bill before going there. If the current legislation is reversed I firmly believe it will be decades before we reform the system. In the meantime (probably most of my life) we will be back facing the potential to lose coverage at the whim of carriers in many (most?) states.(snip)

OK, but IMO no faction of Congress is going to be able to repeal this w/o also offering up a replacement for much of it.(snip)
We can agree to disagree on this, it is just speculation anyhow, but I think we have a better chance of getting something positive accomplished by using this bill as a "prototype-dry-run-exercise", throwing it out, and now putting together something that really works and addresses cost and the ties to employment and all the other bugaboos.

-ERD50

But what if the lawsuits succeed all the way up to the Supreme Court? Wouldn't that result in repeal of the existing law, with no replacement?

 

[samclem]

When the time comes to decide whether another few physical therapy sessions, or back surgery, or a digital mammogram is really worth the extra money, people will still be spending "somebody else's money". I could imagine keeping the vouchers low enough that people would have to accept high deductibles, but they describe the vouchers as "generous".

Observation: The whole dynamic of the "how much care do I want to buy" decision hinges on whether this decision is made in advance (whether to choose a "no frills" or "with everything" insurance plan) or at the time of service ("the copay for the next therapy session is 25%, which is $100 out of my pocket. Does my back hurt that much?").

The "no-frills" plans would be cheap and lean--and mean. They'd offer care based strictly on what some care optimization board decided was worthwhile. Probably palliative care only for 80+ YOs with cancer. Expect to share a room when in the hospital. Expect to see a lot of PAs rather than MDs. Lots of older "good enough" drugs rather than the optimum choice. The higher cost plans would offer more extensive care.

 

[kyounge1956]

(snip) When the time comes to decide whether another few physical therapy sessions, or back surgery, or a digital mammogram is really worth the extra money, people will still be spending "somebody else's money". I could imagine keeping the vouchers low enough that people would have to accept high deductibles, but they describe the vouchers as "generous".(snip)

How do other countries that already have universal health coverage solve this problem? In the UK, as I understand it, all health care is paid for with "someone else's money" (i.e. tax funded single payer). I think it was the doctor from the UK who stated frankly during his interview that some of his patients weren't really sick, they made appointments basically because they were lonely. Yet even so, the UK's system costs them less than ours costs us.

Maybe such superfluous appointments and treatments are not really that significant a cause of our high costs here in the US.

 

[ERD50]

But what if the lawsuits succeed all the way up to the Supreme Court? Wouldn't that result in repeal of the existing law, with no replacement?

Yes, but that is different from Congress (who need votes) doing it.

If the SC repeals it, I would expect action by Congress to get a new, Constitutional bill in place. I'll cross my fingers they do a better job the 2nd time around. From what I've seen of the discussion here on this Wyden/Bennett proposal, it sounds on the right track (haven't been through the details though).

-ERD50

 

[Purron]

Yes, but that is different from Congress (who need votes) doing it.

If the SC repeals it, I would expect action by Congress to get a new, Constitutional bill in place. I'll cross my fingers they do a better job the 2nd time around. From what I've seen of the discussion here on this Wyden/Bennett proposal, it sounds on the right track (haven't been through the details though).

-ERD50

I hope you're right about Congress taking action to get a new bill in place if the SC repeals the current bill. Is it too much to hope for our elected representatives to put their differences aside and do their best to write and pass the best health care bill possible? If they fail, I vote for sending our crack team of moderators up to Capitol Hill to get the political ranting out of the process and set 'em straight.

 

[M Paquette]

Yes, but that is different from Congress (who need votes) doing it.

If the SC repeals it, I would expect action by Congress to get a new, Constitutional bill in place. I'll cross my fingers they do a better job the 2nd time around. From what I've seen of the discussion here on this Wyden/Bennett proposal, it sounds on the right track (haven't been through the details though).

-ERD50

The Wyden/Bennett Healthy Americans Act (S.391 111th Congress) sets up a Bismarck Model health care system, where premiums for basic coverage are collected through the tax system as part of their federal income tax liability, and distributed through state-run Health Help Agencies to approved plans from private insurers.

Premiums are subsidized by raising the amount of the standard deduction, with a phase-out to no deduction for couples earning over $250,000/year.

Employers pay a new tax scaled to a portion of the premium for the minimum package, the portion varying from 3% to 26% based based on firm size and gross revenue per employee. This replaces the employer-paid premiums used for mose US care, at a lower rate compensating for the loss of the employee medical insurance tax deduction. Small businesses pay in at a 'token' rate that should be readily affordable.

The base plan should match the Federal Employee Health Benefits (FEHB) program, with premiums set only by region and smoking or non-smoking. Individuals can upgrade to additional coverage by making a supplementary premium payment.

A preliminary letter from the CBO and Joint Committee on Taxation for the 2008 version of the bill found that it would be essentially revenue-neutral in 2014, 6 years into the budget cycle.

The Bismarck Model plans are found in much of Europe, Japan, and parts of Latin America.

 

[kyounge1956]

(snip)If the SC repeals it, I would expect action by Congress to get a new, Constitutional bill in place. I'll cross my fingers they do a better job the 2nd time around. From what I've seen of the discussion here on this Wyden/Bennett proposal, it sounds on the right track (haven't been through the details though).

-ERD50

I hope you're right about Congress taking action to get a new bill in place if the SC repeals the current bill. Is it too much to hope for our elected representatives to put their differences aside and do their best to write and pass the best health care bill possible? (snip)

>>sigh<< sometimes it seems like it is too much to hope for.

If they fail, I vote for sending our crack team of moderators up to Capitol Hill to get the political ranting out of the process and set 'em straight.

I don't know if even the E-R mods would be up to that Herculean task. Things seem so polarized that IMO the pig would probably sing before any replacement bill was passed. For that reason—better to modify and improve a flawed bill than go back to the status quo ante—I don't want the court challenge to succeed. Alas, I haven't much expectation that it will fail. IANAL but the argument that, if Congress can require you to buy health insurance they could also require you to buy any other product, seems to me a valid one.

 

[Alan]

If they fail, I vote for sending our crack team of moderators up to Capitol Hill to get the political ranting out of the process and set 'em straight.

It would need to be a team of moderators on crack to volunteer for that task.

 

[GregLee]

If the GOP [-]is[/-] were smart, ...

Grammatical point: subjunctive is called for here.

 

[samclem]

The Wyden/Bennett Healthy Americans Act (S.391 111th Congress) sets up a Bismarck Model health care system, where premiums for basic coverage are collected through the tax system as part of their federal income tax liability, and distributed through state-run Health Help Agencies to approved plans from private insurers.

Like the present law, Wyden/Bennett called for penalties for failure to buy insurance, so the same (potential) constitutional issues would be there. Still, I don't think that's a show stopper, there are promising ways to combat adverse selection without an individual mandate.

Wyden/Bennett sure didn't get much press. "Revenue neutral" is good, but I can't find info on how much the individual income tax would have been raised to pay for the subsidies (via the larger standard deduction). That employer-side payroll tax wouldn't have been enough to provide substantial subsidies.

 

[ERD50]

... there are promising ways to combat adverse selection without an individual mandate.

Care to elaborate? I always figured that everyone has to be 'in' to avoid this. Maybe the barrier to entry can be low enough that adverse selection is minimized enough to be rather insignificant, rather than eliminated?

-ERD50

 

[samclem]

Grammatical point: Articles are free. We should use them

A [-]G[/-]grammatical point: The subjunctive is called for here.

And why is changing the tense ("is" to "were") preferable in this context? It doesn't match the rest of the sentence?

 

[M Paquette]

Like the present law, Wyden/Bennett called for penalties for failure to buy insurance, so the same (potential) constitutional issues would be there. Still, I don't think that's a show stopper, there are promising ways to combat adverse selection without an individual mandate.

Yes, but the form of the penalties is similar to that for Medicare Part D prescription drug coverage. If a person doesn't sign up within 63 days of becoming eligible (open enrollment period, becoming a permanent resident, losing an alternative insurance coverage, switching to a non-exempt religion...), then penalties will be added to the cost.

The penalty is the weighted average of the premium for the number of months not covered times the number of months not covered plus a 15% surcharge of that amount. It's back premiums plus a late fee for missing open enrollment.

There is no penalty for failing to take an economic action, which was a bone of contention in the recent court cases. Should you decide to enroll, you owe back payments. The fee is paid to the state HHA, under procedures to be specified by the state, so there is no reliance on federal powers in the collection of the late payments and surcharge. In addition, states may petition to opt out of the federal program should they have a similar or better program already in place.

I will note, however, that because the Wyden/Bennett plan is similar to that used in some European countries that we will hear the inevitable shrieks of "Socialism!". In addition, Wyden/Bennett has a provision that on enrollment individuals be provided with information regarding the right of individuals to refuse treatment and make end-of-life care decisions. This provision led to the outcry about Death Committees, and complaints of "They want to kill Grandma!" from the usual suspects.

Further, because the law replaces the existing Medicaid/SCHIPS coverage with a wrapper built around an HHA-approved policy, some groups that believe the indigent Medicaid patient should be empowered to make their own purchasing and care management decisions in the interest of encouraging free market forces for indigent care would prefer improvements such as vouchers to supplement the core HHA policy rather than an additional coverage wrapper. (I suspect they are trying to make a philosophical point, at the expense of practicality, but that's just me.)

The law is entirely too reasonable, and does not provide sufficiently visible class distinctions to be viable in the current political climate.

 

[GregLee]

And why is changing the tense ("is" to "were") preferable in this context? It doesn't match the rest of the sentence?

"Were" in "If Republicans were smart, ..." is a morphological past tense, but not a grammatical past tense; rather, it is a subjunctive. Here is the difference. A past tense doesn't occur with a future time expression, hence the unacceptability of: *"The Republicans were elected next year." (Though "... the next year" would be okay.) But "were" as a subjunctive may combine with a future time expression: "If the Republicans were elected next year, we'd all regret it."

The rest of the sentence would naturally have to be changed if "is" were made subjunctive.

 

[M Paquette]

"Were" in "If Republicans were smart, ..." is a morphological past tense, but not a grammatical past tense; rather, it is a subjunctive. Here is the difference. A past tense doesn't occur with a future time expression, hence the unacceptability of: *"The Republicans were elected next year." (Though "... the next year" would be okay.) But "were" as a subjunctive may combine with a future time expression: "If the Republicans were elected next year, we'd all regret it."

The rest of the sentence would naturally have to be changed if "is" were made subjunctive.

This is why I hate time travel.

 

[samclem]

Care to elaborate? I always figured that everyone has to be 'in' to avoid this. Maybe the barrier to entry can be low enough that adverse selection is minimized enough to be rather insignificant, rather than eliminated?

Yes, I think lowering the cost of basic insurance is important. If the subsidies are sufficient then there'll be no one (theoretically) who couldn't afford to buy the coverage.

But then we'll have people who would prefer to spend the money on something else. Or would choose to wait to buy coverage until they hear the ambulance. How to motivate them without a government penalty?

For those that are in the mainstream of society (hold a job, want to have good credit, etc), requests for proof of health insurance by employers, creditors, etc should be commonplace. If I ran a mortgage company, I wouldn't lend money to anyone without this insurance--the cost is reasonable, and if they get sick without it, the medical bills reduce the likelihood that I'll be repaid. Same with employers: I want healthy employees. I can't make 'em go to the doctor, but I can screen them to be sure they are insured so they'll likely go when they need to.

Want to enroll Johnny in daycare? Please show us your insurance card.

Set enrollment windows and waiting periods to discourage the gamers. If you're uninsured when the bus hits you, you are out of luck. Sorry, but our society has gone to extreme expense to facilitate your care, you have acted irresponsibly. Yes, it is harsh. But it is no worse than the situation today when a person without insurance gets sick, right?

The safety net: For those who are mentally incapable of making an informed decision to act on their own behalf, the courts step in and enroll them. For individuals who gambled by being uninsured and lost, they will get care but their assets will be liquidated if necessary and their wages (if any) garnished to pay for their medical care.

Also, using the tax code to induce insurance enrollment might pass Constitutional muster if done differently than the present law. Wyden-Bennett envisioned a larger standard deduction as a mechanism to provide subsidies (I need to read the law, I'm not sure how this helps those without a tax liability). Okay, but like a lot of other things on the tax form, you get the benefit if you jump through the hoop. So, state under penalty of perjury that you have health insurance meeting the minimum requirements or you don't get the deduction. Include your policy number on the tax form. Folks who have insurance get the tax deduction (just as those who have a mortgage get an interest deduction, etc). The IRS would be empowered to verify the insurance coverage claimed (just as they have automated systems to check the 1099s and W-2s against what is listed on the form). Fines would be substantial.

Will these steps produce 100% compliance? No. But I'd bet they get us closer to 100% compliance than the very insufficient penalties included in the present legislation. Most folks, healthy or sick, rich or poor, are going to jump at this chance to get health insurance. We'll be left dealing with the folks who, for whatever reason, are too dim or too drugged out to recognize their self-interest and act to advance it.

Anyway, those are some ideas.

 

[FIRE'd@51]

I think broader risk pools would help reduce or eliminate adverse selection. The original Wyden bill had regional risk pools. If the risk pools were broad enough, I would think they would be statistically representative of the greater population. Although I have no proof of this, my gut feeling is that eliminating employer provided health insurance and, in effect, forcing these folks into the risk pools would, on average, reduce adverse selection, since I believe that, on average, the working population is younger and healthier than the non-working population.

 

[M Paquette]

Also, using the tax code to induce insurance enrollment might pass Constitutional muster if done differently than the present law. Wyden-Bennett envisioned a larger standard deduction as a mechanism to provide subsidies (I need to read the law, I'm not sure how this helps those without a tax liability).

Heh. The "Individual Shared Responsibility Payment" becomes part of your tax liability, so everybody owes (except those covered by another individual's plan - kids). (Page 104 of S.391) The Standard Deduction is adjusted with a phaseout formula and inflation tweak (Page 137-140).

The good news is that the setup is so simple it should work on a 1040-EZ. Maybe on a postcard if we get the often-promised, never-delivered tax code simplification.

 

[Purron]

IMHO, the big problem with the Wyden/Bennett proposal is it relies on an increase in taxes. It doesn't matter if you're a Dem or Rep, supporting more taxes in our current environment is political suicide. Someone please prove me wrong.

 

[samclem]

Heh. The "Individual Shared Responsibility Payment" becomes part of your tax liability, so everybody owes (except those covered by another individual's plan - kids). (Page 104 of S.391) The Standard Deduction is adjusted with a phaseout formula and inflation tweak (Page 137-140).

The good news is that the setup is so simple it should work on a 1040-EZ. Maybe on a postcard if we get the often-promised, never-delivered tax code simplification.

Oh, that's a biggie. The IRS will be processing many tens of millions more tax returns than they do today. More agents needed. But, something that gets more Americans chipping into the big tax pot ain't all bad. It might serve to temper voter appetites for more government spending. And, though it might be lost on the average voter, we're already (in the aggregate) paying this money anyway for health care. The devil would be in the details.

Do I wish we could keep Uncle Sam's hands in his own pockets? Yes. Is that realistic? No.

 

[FIRE'd@51]

IMHO, the big problem with the Wyden/Bennett proposal is it relies on an increase in taxes. It doesn't matter if you're a Dem or Rep, supporting more taxes in our current environment is political suicide. Someone please prove me wrong.

From the Washington Post article in your post:

The Congressional Budget Office has reported that this framework is the only one thus far that bends the health-care cost curve down and makes it possible for the new system to pay for itself.

In any case, Obamacare raises taxes, so even if Wyden/Bennett were to raise taxes; if the increase is less than Obamacare, it would still lower taxes on a relative basis.

 

[Independent]

I looked at the CBO's summary of the Wyden/Bennett plan here http://www.cbo.gov/ftpdocs/91xx/doc9184/05-01-HealthCare-Letter.pdf

I think two of the reasons it appears dead are that it's too much change and it's too complicated. At the bumper sticker level, it both raises taxes and raises spending by a lot.

I see universal health insurance, administered by private health insurers. Apparently the R's think that the private insurers will keep costs down. I don't see any other new incentive on the cost side. In particular (this relates to a comment from Sam) I didn't see a bare bones option. The minimum benefits are initially set at the level for the Federal Employees Health plans. I'm not a federal employee, but I'm going to guess that's not bare bones.

Somebody has to pay taxes to buy insurance for people who currently don't have insurance. Since most of those people are poor, it won't be them. I assume that as soon as real numbers get attached to the various cash flows, some taxpayers will decide they don't like this idea.

It's not clear to me why anyone would buy a more expensive than basic plan (maybe there's good experience on that in the Federal employees plan). At first glance it seems that the two insurers that win the low bid in a state will get almost all of that state's business. But that may reflect my lack of understanding.

 

[M Paquette]

Oh, that's a biggie. The IRS will be processing many tens of millions more tax returns than they do today. More agents needed. But, something that gets more Americans chipping into the big tax pot ain't all bad. It might serve to temper voter appetites for more government spending. And, though it might be lost on the average voter, we're already (in the aggregate) paying this money anyway for health care. The devil would be in the details.

Do I wish we could keep Uncle Sam's hands in his own pockets? Yes. Is that realistic? No.

It's DOA. More IRS agents, new fees on small businesses (the employer contribution - $250 per employee base), government specified base coverage, Death Committees, just like Socialist France, etc.

The Job and Grandma Killing Wyden/Bennett Plan doesn't stand a chance.

It's an interesting idea, but Americans are conditioned to reject risk pools. I don't know how many times I've seen comments wherein the poster rejects the idea that his premiums might pay for the care of someone the poster perceives as inferior (bad diet, genes, risky behavior):

Why should I, who count calories and exercise, pay the same amount as the whales I see in the grocery store every day buying family packs of Cokes and mountains of greasy foods? No one has any problem making smokers pay more, so where is the pseudosympathy for McD's chompers coming from?

Don't ask everyone else to pay higher taxes for your diabetes and visits to the doctor when your heart problems emerge. This is unbelievable. What happened to taking responsibility for your own actions?

The concept that something bad could happen to themselves doesn't enter into this. There's a desire to view insurance as a prepaid medical plan, and Something Expensive simply won't happen to them, so there's no reason to pay extra to cover potential risks. And if Something Expensive happens to themselves, well, they were good and righteous, and deserve a freebee. If Something Expensive happens to someone else, well, it's obviously that person's fault, because we all know that heart attacks, cancer, or diabetes never strike anyone who exercises and eats properly.

The future of health care policy for the United States is in the hands of innumerate, semi-literate cretins who will believe whatever their favorite ideologues tell them. This won't end well.

 

[FinanceDude]

Mystery to me and I tried to figure out how Wyden ended up getting steamrolled at the time. His plan was a much better plan.

Because Pelosi didn't want it?

 

[haha]

I'm still waiting for more discussion of the subjunctive. At least in this we have an issue that can be settled. No chance at all of flying pigs.

It is really complex, and largely abandoned in casual American speech, but there are guidelines should we care to examine them.

Ha