Senator Wyden's "health care plan for all Americans"

[mykidslovedogs]

Hey guys, we don't know anything about the plan yet so I suggest we wait before we poop on it.

Hi Martha, right on...I like your open-mindedness, but there could be one very big problem with a plan like this...there are thousands of employers that don't offer benefits. If they are forced to give higher wages to employees so they can go out and get a healthplan, they might be forced to cut back on the number of employees they have, which could hurt business as well as increase the un-employment rate.

 

[Martha]

Hi Martha, right on...I like your open-mindedness, but there could be one very big problem with a plan like this...there are thousands of employers that don't offer benefits. If they are forced to give higher wages to employees so they can go out and get a healthplan, they might be forced to cut back on the number of employees they have, which could hurt business as well as increase the un-employment rate.

Well, my open mindedness only goes so far. I want a solution that will provide health care for all. I am certainly willing to look at various options, knowing that tradeoffs are going to occur.

The number of small employers with no insurance plan for their employees is steadily increasing due to increasing costs. Other employers deal with increasing costs by having more part time employees who are not eligible for their insurace. Others pass along more of the cost to employees. Again it is back to lack bargaining power. The smaller employers are often limited to only a few options, all of which cost big bucks. So yes, if these small employers have to increase wages substantially, that could very well effect employment. Another reason for national healthcare. Spread the risk among everyone.

 

[mykidslovedogs]

Hi Martha,

What kind of nationalized plan do you think would work best? We know Medicare and Medicaid cost a fortune and don't work very well. Everyone complains about them. Doctors don't like it because they don't get reimbursed very well, and it's very paperwork intensive. Conservatives don't like it because it is too expensive and poorly managed. Liberals don't like it because they don't think it's good enough. Patients don't like it because they don't like being limited to certain doctors that take it, and they also don't like (particularly with Medicare).. that it is not completely free.

If we go with a nationalized catastrophic plan, I can guarantee you that people will complain, because it's not the catastrophies that they want coverage for....What they want is free medication, free emergency care and free lab, x-ray, high-tech and front-end care like routine office visits (ultimately, these are the things that cost the most anyways (for most people). People will not like to have deductibles.

If we go with free care across the board, it's going to cost the taxpayers a fortune.

Can you think of a good, happy medium? I still sort of like the idea of a national HMO. Everyone is required to have it, but if they want better, then they are just going to have to buy their own supplemental coverage.

 

[mykidslovedogs]

Even better yet....A national HMO combined with a tax voucher system. If you want the national HMO, you can buy it free from any carrier with a tax voucher. The coverage is very basic, but pays for x number of office visits, emergency visits, prescription drugs, and lab work per year, with limited catastrophic coverage. If you don't want the national HMO, you can take the tax voucher and use the money to buy your own, personal policy.

 

[haha]

We know Medicare and Medicaid cost a fortune and don't work very well.

You can't "know" this, because by many measurements at least it isn't true. Better to say, "Certain of us I believe ...”

Medicare has its flaws, but is has a much lower operating overhead than the rest of the US medical insurance industry, and its consumers are mostly pretty satisfied with it. As for the doctors, Medicare is the best thing that ever happened to them. Many medical practices would close their doors if it weren’t for the fact that the sickest people- the old- now have insurance thanks to Medicare. Of course I guess they could all re-open as Botox Centers.

People will always complain, in hopes of fooling others into giving them a better deal. See farmers, teachers, union members, immigrants, etc. This doesn't mean that they would want to take their chances with something else.

Ha

 

[mykidslovedogs]

The reason that Medicare has a lower operating overhead is in part because the government doesn't pay for lots of administrators and service reps (thus the service is very poor), and the reimbursment levels, the amount of pay that the goverment forces doctors to accept, is extremely low. (in fact, I believe it about 1/3 of the reimbursment that doctors get from private insurance. )

Doctors may make a lot of their money off Medicare and Medicaid, but I would be willing to guess that a large majority of their incomes come from private insurance as well.

I am not saying that Medicare and Medicaid are bad. People definately need them, BUT I thought this forum was started because of an interest in healthcare reform. I was just pointing out that everyone seems to complain about Medicare and Medicaid.

I am just trying to see what the people in this forum think would be a better, nationalized alternative. It's funny that people are so quick to argue with my points instead of building upon some of my ideas..

So, what did you all think about this idea....>

How about A national HMO combined with a tax voucher system? If you want the national HMO, you can buy it free from any carrier, (guaranteed) with a tax voucher. The coverage is very basic, but pays for x number of office visits, emergency visits, prescription drugs, and lab work per year, with limited catastrophic coverage. If you don't want the national HMO, you can take the tax voucher and use the money to buy your own, personal policy.

 

[Martha]

Mykids, I don't favor a two tier system because the bottom tier usually gets shafted.

Here is more on Wyden's plan:

http://ezraklein.typepad.com/blog/2006/12/the_healthy_ame.html

From the blog:

. . . an individual mandate would be implemented, forcing every American to purchase one of the options offered by their state's newly formed Health Help Agency (HHA). The HHA's will have a menu of private insurance plans, all of which must provide coverage equal to or better than the Blue Cross Blue Shield Standard Plan used by Congress. All plans will be community rated by the state, meaning an end to adverse selection and preexisting condition problems. The only acceptable variables for price will be geography, family size, and smoking status. Subsidies will be offered up to 400 percent of the poverty line, will full coverage provided to those below 100 percent. Employers will contribute through a set equation related to business size and yearly profits. There's quite a bit more, but that's the basic outline.

I don't know how the plan will work for the unemployed, so I defer my opinion. I do like the solution to the adverse selection problem. I have many concerns with keeping insurance companies in the mix as so much of our healthcare dollar (30% IRRC) goes to administration costs, higher than any other developed country. This plan won't take any paperwork burden off of providers that I can see.

 

[mykidslovedogs]

Hi Martha,

Modified community rating is a nightmare. They tried it in the small group market in Colorado quite a few years ago, and the result was that all of the insurance dropped out of the state except like two or three carriers creating HUGE inflation in the small group pricing. This actually LED TO ADVERSE SELECTION. the phenomenon was that mostly only the unhealthy stayed in the small group market, while many of the healthy opted out, because the cost was cheaper for them in the individual market than paying their share of the cost in the group market.

What I was proposing is absolutely NOT a two-tiered system. What I was saying is that we require the individual insurance carriers to provide "guaranteed issue" on a BASIC plan design and then give a tax credit to ALL Americans who buy it. The tax credit would pay the ENTIRE amount for the basic plan design. This plan would have to have pre-existing condition limitations for those who OPT OUT in order to prevent adverse selection. Also, if you don't buy the plan, you don't get the tax credit.
The government could give a time limit on obtaining the plan, much like they did with Medicare Part D coverage.

Employers could offer benefits by paying the difference for better plans, and this expense could be tax-deductible for employers - as always, non-discrimination rules would have to apply. What is offered to one employee must be offered to all.

To appease the conservatives, we would still allow insurance carriers to offer better products at a higher price for those who want better coverage. These folks would be allowed to use their tax credit towards the better plan designs if they want to. That way, the people who are paying the majority of taxes in the USA, (the "rich") get to see some benefit out of their tax dollars as well.

Advantages:
1.) Everyone gets a basic level of care..just what the liberals keep asking for.
2.) Insurance companies are not driven out of business, because there will be plenty of people out there who will want to buy up.
2.) Employers aren't hurt in any way, because no-one is forcing employers to incur the cost
3.) There will still be plenty of incentive for insurance carriers to remain in the market because the "buyup" plans will be medically underwritten.
4.) It would probably be less expensive for the goverment, too, because the administration costs would be in the hands of the private carriers, and not in the hands of beurocracy.

Disadvantages:
1.) The only disadvantage I see here is that the ones getting the FREE insurance MIGHT not have the ability to buy up, but at least they are getting BASIC care, which is better than nothing and what everyone seems to keep asking for.

 

[Martha]

Hi Martha,

Modified community rating is a nightmare. They tried it in the small group market in Colorado quite a few years ago, and the result was that all of the insurance dropped out of the state except like two or three carriers creating HUGE inflation in the small group pricing. This actually LED TO ADVERSE SELECTION. the phenomenon was that mostly only the unhealthy stayed in the small group market, while many of the healthy opted out, because the cost was cheaper for them in the individual market than paying their share of the cost in the group market.

Of course trying it in only one part of the market won't work. The proposal would have ALL insurance community rated so there CANT be adverse selection.

 

[Martha]

1.) The only disadvantage I see here is that the ones getting the FREE insurance MIGHT not have the ability to buy up, but at least they are getting BASIC care, which is better than nothing and what everyone seems to keep asking for.

Sounds two tiered to me. healthy people get the good plan the unhealthy people get something less.

What is basic care? If you read about where our health dollars go, (discounting admin costs and profit) most money goes to treat the chronically ill. So what is basic care for them?

 

[mykidslovedogs]

Of course trying it in only one part of the market won't work. The proposal would have ALL insurance community rated so there CANT be adverse selection.

Maybe..., but guaranteed issue combined with community rating will still force many insurance carriers out of business, creating inflation in the industry overall.

And, I am still uncertain about FORCING people to buy into the plan. How would that be enforced? I think in any situation, it's better to offer incentives, with penalties for those who opt out. And I really think it's a bad idea to force employers to pay into it. Some employers simply can't afford that additional cost. I think the idea of Basic coverage for all with the option to buyup has fewer disadvantages.

 

[mykidslovedogs]

Sounds two tiered to me. healthy people get the good plan the unhealthy people get something less.

What is basic care? If you read about where our health dollars go, (discounting admin costs and profit) most money goes to treat the chronically ill. So what is basic care for them?

How do you know that all healthy people will buyup? Maybe the BASIC plan would be enough?? Also, of course a basic plan design that is acceptable to the liberals would have to be devised. ...

Perhaps it could be a limited benefit plan with x number of office visits, emergency care, lab, x-ray and high tech services not subject to deductible combined with a "donut hole" deductible which would have to be satisfied before catastrophic coverage would kick in. The deductible would help prevent overutilization as well as encourage people to use their "front-end" coverage wisely such as purchasing generic drugs instead of brand name, utilizing urgent care facilities instead of emergency rooms, and shopping around for the best prices on drugs, ab, x-ray and high tech services.

 

[Martha]

Maybe..., but guaranteed issue combined with community rating will still force many insurance carriers out of business, creating inflation in the industry overall.

And, I am still uncertain about FORCING people to buy into the plan. How would that be enforced? I think in any situation, it's better to offer incentives, with penalties for those who opt out. And I really think it's a bad idea to force employers to pay into it. Some employers simply can't afford that additional cost. I think the idea of Basic coverage for all with the option to buyup has fewer disadvantages.

Maybe..., but guaranteed issue combined with community rating will still force many insurance carriers out of business, creating inflation in the industry overall.

And, I am still uncertain about FORCING people to buy into the plan. How would that be enforced? I think in any situation, it's better to offer incentives, with penalties for those who opt out. And I really think it's a bad idea to force employers to pay into it. Some employers simply can't afford that additional cost. I think the idea of Basic coverage for all with the option to buyup has fewer disadvantages.

I too am unclear as to how to force people into the plan,. If we have national healthcare, it could be automatic. I also have reservations about employers paying the cost. Better to pay through tax revenues. I still am favoring a plan ala medicare for all. But will watch and see regarding Wyden's plan as I still do not have enough facts to form an opinion.



I still don't know what "basic" coverage is. You either need health care or you don't. If unnecessary, then it shouldn't be covered. If necessary, someone has to pay. What is basic for a 50 year old woman with breast cancer, heart disease and depression? Treat the cancer, skip the depression? How about a premature baby who needs two million dollars of healthcare and then still might not survive?

How do you know that all healthy people will buyup? Maybe the BASIC plan would be enough?? Also, of course a basic plan design that is acceptable to the liberals would have to be devised. ...

Perhaps it could be a limited benefit plan with x number of office visits, emergency care, lab, x-ray and high tech services not subject to deductible combined with a "donut hole" deductible which would have to be satisfied before catastrophic coverage would kick in. The deductible would help prevent overutilization as well as encourage people to use their "front-end" coverage wisely such as purchasing generic drugs instead of brand name, utilizing urgent care facilities instead of emergency rooms, and shopping around for the best prices on drugs, ab, x-ray and high tech services.

If the basic plan was desirable enough so that healthy middle class people did not want to buy up, then why have anything other than the basic plan?

I still have no proof we have an overutilization problem. I recently read a study that increasing copays resulted in adverse effects, with people forgoing necessary drugs. Fine to have higher copays if there is a generic equivalent but often there isn't a generic equivalent.

Yes, emergency rooms should not be the source of primary care, but that is more a function of inability to pay.

See http://www.joepaduda.com/archives/000469.html regarding flaws in the so called consumer driven model.

See http://www.kff.org/uninsured/7568.cfm regarding how HSAs do not help low income people.

Maybe..., but guaranteed issue combined with community rating will still force many insurance carriers out of business, creating inflation in the industry overall.

We don't know that. If everyone has to have insurance and all plans are community rated, I don't see the inflation in the costs. If an insurance company only made money because it could cherry pick, then maybe the company should go out of business.

 

[mykidslovedogs]

If the basic plan was desirable enough so that healthy middle class people did not want to buy up, then why have anything other than the basic plan?
[/quote]

People buyup for all kinds of different reasons. Some people don't like the idea of having a deductible, while it doesn't bother others at all. Some people want to pay extra for 100% after copays, while others don't care about having that kind of coverage. Shoot, I have a $5150 deductible on my healthplan with no front end coverage, and that doesn't bother me at all. At least my assets are protected in the event of a catastrophic illness. Do you think that my plan is "better" than the basic plan I just proposed? (And I'm even young and healthy!)

In any event, you have got to have deductibles on a basic plan design to prevent overutilization. Overutilization DOES happen. It's the nature of human beings. If all you have to pay is $5.00 for a prescription, you will have no incentive to shop for a generic prescription. I realize that there are some drugs that do not have generic equivalents, but that is beside the point. If your emergency room care is FREE, then you won't seek out an urgent care facility. If your routine office visits only cost $10.00, then you'll have your kids to the Doctor for every little sniffle and sneeze. Amazingly, when you have a deductible to think about, you start thinking more carefully about how you spend your healthcare budget.

 

[FIRE'd@51]

Quite a bit of information here.

http://wyden.senate.gov/Healthy_Americans_Act/HAA_Cost_Coverage_Report.pdf

 

[Rich_by_the_Bay]

With the exception of clearly cosmetic surgery, there is no moral distinction between "basic" care and "good care." You cannot legally or ethically withhold needed care from any patient. "More" care is not better care, as an aside - unnecessary "executive" stress tests and CT scans can actually increase morbidity through wild goose chasing.

Even the cosmetic surgery issue gets murky. Varicose vein injection (cosmetic or do they "hurt a little," breast reduction because of back pain vs cosmetic; surgery to improve the appearance of a facial scar from an injury, nose job because of congestion v. appearance, hair transplant because of emotional distress from baldness in a 25 year old, etc. I think these should be carefully scrutinized, but not sweepingly excluded.

Perhaps MyKids can provide an example of the kind of care that he should get (with the fortress of private health insurance approach) but which a less protected "other" shouldn't be reimbursed for. I'm confused about that.

No one is invulnerable, health-wise or financially, and often crises with the former lead to crises with the latter -- insurance or not.

 

[mykidslovedogs]

Perhaps MyKids can provide an example of the kind of care that he should get (with the fortress of private health insurance approach) but which a less protected "other" shouldn't be reimbursed for. I'm confused about that.

Well, in my previous post, I already stated that I have a healthplan with a $5150 deductible and 100% coverage thereafter, including prescriptions. Maybe a better idea would be to have a BASIC plan for ALL with the healthy given the option to buydown and receive a tax REFUND if they don't want the better, basic plan.

Like I said before, many of the healthy don't need a lot of the front end benefits, so we could buydown to a plan with a higher deductible, and then maybe get a tax refund instead. Just a thought... or...maybe the healthy won't like the basic plan and decide to buyup....

I'm just saying that if we are going to offer a basic level of care for all, it is going to have to be defined in some manner. It can't just be a free for all....

 

[mykidslovedogs]

one more thing...I'm not saying that "better" means it covers more illnesses.. Perhaps better just means a lower deductible...

 

[REWahoo]

mykids,

I think in one of your total of 36 posts you mentioned you were passionate about health insurance. That's pretty obvious since that's the only subject you've posted about since joining the forum 4 days ago.

We know a lot about Rich, Martha and others in this discussion, but very little about you. How about filling in a few holes for us so we can understand better where you're coming from.

I think you've told us you sell insurance, live in Colorado, and have a family. Since this is a forum about Financial Independence and Retiring Early, where are you on that journey? Are you in your 30's and just getting started, in your 40's and well on your way or in your 50's, financially ready to retire but afraid to pull the trigger for whatever reason? Are you a real estate investor or do you invest in the equity market? Do you buy funds or individual stocks?

Just curious. Thanks.

Everyone please note: I didn't ask if mykids thought it was better to pay off his/her mortgage early or what he/she thought about annuities.

 

[farmerEd]

Mykids, I don't favor a two tier system because the bottom tier usually gets shafted.

. . . an individual mandate would be implemented, forcing every American to purchase one of the options offered by their state's newly formed Health Help Agency (HHA).

You should keep an eye on Massachusetts...the law recently change and as of (I think) July 1st everyone must have or purchase insurance. Companies (with more than 10 employees) must contribute or pay (a pitifully small) "tax" of $295 per employee. For those that can't afford it (based on a multiple of Fed poverty levels and family size and income), there is a sliding scale reimbursement or premium assistance. It'll be interesting to watch and see what happens. I live in Mass, and would like to see it work out, so I have more than a passing interest - hope it doesn't become a real budget buster.

 

[mykidslovedogs]

mykids,

I think in one of your total of 36 posts you mentioned you were passionate about health insurance. That's pretty obvious since that's the only subject you've posted about since joining the forum 4 days ago.

We know a lot about Rich, Martha and others in this discussion, but very little about you. How about filling in a few holes for us so we can understand better where you're coming from.

I think you've told us you sell insurance, live in Colorado, and have a family. Since this is a forum about Financial Independence and Retiring Early, where are you on that journey? Are you in your 30's and just getting started, in your 40's and well on your way or in your 50's, financially ready to retire but afraid to pull the trigger for whatever reason? Are you a real estate investor or do you invest in the equity market? Do you buy funds or individual stocks?

Just curious. Thanks.

Everyone please note: I didn't ask if mykids thought it was better to pay off his/her mortgage early or what he/she thought about annuities.

Well, I don't like people on the internet to know too much personal information about me. You never know who's out there checking into you, or who's gonna go postal on you 'cuz of the things you say, so I like to remain pretty anonymous. I am definately passionate about health insurance, and and I'm a little over halfway to retirement. I have a pretty diverse portfolio, and I invest in real estate, mutual funds, and stocks. I have a really good start on my retirement fund, and I am already locked in with a high deductible HSA plan with Humana One which I plan to keep for the rest of my life or at least until Humana drops out of the market. Hopefully, they never will, as they are a very financially sound company. But, I guess if I am forced into a nationalized plan (which will likely force my health insurance carrier out of business), I might have to rethink my whole retirement plan, because my guess is that a nationalized plan won't even come close to as good as the coverage I have right now (100% covered - I have already saved my deductible twice over because my premiums are so low).

I love my current helath plan because it's inexpensive and the huge amount of premiums savings I get allow me to save on a tax-free basis towards my retirment. If I don't use the money in my health savings account, it grows on a tax free basis and I can take it out when I am 65 with no penalties or taxes if I use it for medical care. If I take it out after age 65 and don't use it for medical care, I will just have to pay taxes on it, much like an IRA.

By the way, I think it's better to annuitize than to pay off your mortgage.....

 

[haha]

Well, I don't like people on the internet to know too much personal information about me. You never know who's out there checking into you, or who's gonna go postal on you 'cuz of the things you say, so I like to remain pretty anonymous. I am definately passionate about health insurance, and and I'm a little over halfway to retirement. I have a pretty diverse portfolio, and I invest in real estate, mutual funds, and stocks. I have a really good start on my retirement fund, and I am already locked in with a high deductible HSA plan with Humana One which I plan to keep for the rest of my life or at least until Humana drops out of the market. Hopefully, they never will, as they are a very financially sound company. But, I guess if I am forced into a nationalized plan (which will likely force my health insurance carrier out of business), I might have to rethink my whole retirement plan, because my guess is that a nationalized plan won't even come close to as good as the coverage I have right now (100% covered - I have already saved my deductible twice over because my premiums are so low).

I love my current helath plan because it's inexpensive and the huge amount of premiums savings I get allow me to save on a tax-free basis towards my retirment. If I don't use the money in my health savings account, it grows on a tax free basis and I can take it out when I am 65 with no penalties or taxes if I use it for medical care. If I take it out after age 65 and don't use it for medical care, I will just have to pay taxes on it, much like an IRA.

By the way, I think it's better to annuitize than to pay off your mortgage.....

My guess is that you are a shill. We'll se soon enough I guess. If you don't trust us, why should we trust you?

I promise to never respond seriously to anything you say after this.

Ha

 

[lets-retire]

Martha--In reference to the buy up. At our last jobs both my wife adn I hadinsurance from our respective employers. Hers cost half as much as mine did in monthly premiums. Hers also had more co-pays and deductibles than mine. In the end hers was more expensive if we needed it. Since everyone in our family is relatively healthy we would opt to go with her plan since it has cheaper monthly payments.

If soemone decides their family is healthy enough to warrant a cheaper plan, but are willing to take on the higher 'use fees' then they should be allowed to opt into this plan and receive the difference in cost between that and the basic plan. Conversely if someone is not so healthy, they could opt into a higher cost plan, but have less use fees resulting in a savings for them.

I still don't like univsersal health care.

 

[mykidslovedogs]

My guess is that you are a shill. We'll se soon enough I guess. If you don't trust us, why should we trust you?

I promise to never respond seriously to anything you say after this.

Ha

Wow - I don't know what a shill is, but it doesn't sound very nice. I swear my responses have all been truthful and I don't think I have said that I don't trust the people on the forum. I simply have differing views on the economics of healthcare. I do however, think I have a pretty open mind, but I don't think I will ever be swayed much more to the left than I already am (which isn't very far....heehee). I am an economic conservative to the core. I believe strongly in capitalism and the American way. I believe strongly that there are four main reasons for the high cost of healthcare in our country:

1.) The barriers to entry for Doctors in this country are very high. Medical schools keep a tight rope on who they allow into and out of the medical schools. This hurts the supply of doctors in our country....Therefore the law of supply and demand kicks in. Too few doctors, too many patients = higher prices.
2.) Heavy Regulation in the food and drug administration drives pricing up on prescription drugs. Prescription drug companies only have x amount of time to recover costs before they lose their patents - Thus too much regulation = higher costs for prescription drugs.
3.) Liability costs are way to high for healthcare professionals. The threats of lawsuits drive up costs which are passed onto consumers.
4.) Medicare and Medicaid reimbursement levels are too low. Therefore, Doctors have to recover costs from the private sector, thus passing on higher prices to consumers who already have health insurance. This creates a never ending self-perpetuating cycle. Prices go higher, fewer people are insured, more people go on the governement plan, doctors need more money, higher prices are passed on to the private sector...and so on and so on....

I believe the only way to fix the problems are to get at the root causes. I think nationalizing care will only put a bandaid on the problems and ultimately lead to poorer quality of care as well as higher prices for consumer and taxpayers. It's as simple as that.

Isn't it OK for me to have differing views than most of the other people in the forum?

 

[dlhanson]

Isn't it OK for me to have differing views than most of the other people in the forum?

You are doing just fine. I don't go for the socialistic plans that they like either. I love our high deductible ($2500 per person) retirement medical which has saved us thousands of dollars so far. If our health needs changed we could switch to a PPO at the next annual enrollment time.

We haven't been to a doctor for over ten years and have no plans to do so. It is too risky to visit a doctor especially if one were to actually consider doing what they "order". Still, life has risks of accidents so we do need insurance.