Posted on 04/02/2010 2:35:46 PM PDT by MisterOg
I’ve been seIf-employed as a health insurance broker / agent for the last 20 years. I have laid out my own vision for health care reform. Although most of my ideas are not original, I know I have not seen this entire spectrum of comprehensive reform promoted anywhere else. I’d like to share it with you, and would appreciate your opinions and feedback.
It has taken 45 years of “entitlement mentality” to arrive at today’s “tipping point”. When it comes to “health care,” it is such a personal issue to each one of us. Even people with a good degree of “common sense,” at times, cannot see beyond their own circumstances when discussing solutions. On top of that, so much of our population cannot fathom the concepts of personal sacrifice and personal responsibility, that I feel it will take a generation to re-instill the character that once signified our country.
It is my belief that the first priority is persuading enough people that dismantling of government control and bureaucracy will do the most initial good for preserving our private health care system. Otherwise, even if Republicans regain the majority in the House and Senate, a “patch” will be no more effective than “the little Dutch boy putting his fingers in the dike” to hold back the tsunami of regulations and costs about to be unleashed on the American people!
It is very distasteful to my more conservative and libertarian nature to suggest that health insurance companies be required to guarantee issue without underwriting pre-existing conditions, let alone the amount of government subsidies that will be required by my “blueprint,” and potential taxes to kick-start it! Regardless of any ideological perspective, the pragmatic strategy has to be acknowledged and seriously considered.
A BLUEPRINT FOR “REAL” CHANGE
COMPREHENSIVE HEALTH CARE REFORM
FOR AMERICA
Submitted by:
Richard Kops
(Independent insurance agent of 20 years)
SUMMARY OF OUR CURRENT HEALTH CARE SYSTEM
Employer-based health insurance plans originated during the 1940’s as a way to side-step wage and price control laws of that era.
Medicare and Medicaid were passed into law in the mid-1960’s.
Both Democrats and Republicans, at both the Federal and State levels, are responsible for injecting government regulations into the health care system. The private marketplace is now at the mercy of elected politicians and unelected government bureaucrats.
We are at the tipping point. Our current system is not sustainable, and a Federal government takeover is not acceptable to a majority of Americans.
Republican Party proposals, so far, are just a “patch” for the system. They only offer to reduce the size of increase in government involvement, not the actual dismantling of government bureaucracy itself.
Most employers would eliminate employee health care plans if given the opportunity. Rapidly rising costs of health plans have placed an unfair burden on businesses.
Individual health plans are severely underwritten, unfairly priced due to individual State mandates. Those who are declined due to health reasons have few options available to them, except high risk pools, which were mandated by HIPAA. These policies are more expensive and generally, have fewer benefits included.
Fraud is rampant within the Medicare system, as the responsibility to handle claims falls on the government bureaucracy.
Prices of medical products and services for Medicare patients are set by elected politicians and unelected bureaucrats.
Medicaid, administered by the individual States, is not a completely funded mandate from the Federal government; forever creating budget crisis within State governments.
The Federal government has trampled on the privacy rights of individual Americans under HIPAA, sold to the American electorate in 1996 under the guise of “portability.”
The Federal government has set the coverage rules for terminated employees of company health plans (COBRA).
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The Federal government has created rules and regulations detailing how large employers must offer health insurance policies (ERISA).
State governments create mandates for health plans and a myriad of rules and regulations on how employers offer small group health plans.
State governments massively regulate which insurance carriers will be allowed to offer health insurance products within their individual jurisdictions.
State governments massively regulate what health insurance products will be allowed to be sold by insurance carriers within their individual jurisdictions.
State governments massively regulate benefits mandated in each small group and individual health insurance policy sold within their individual jurisdictions.
State governments massively regulate what prices can be charged on small group and individual health insurance policies sold within their individual jurisdictions.
Hospitals and Providers cost shift. Medicare and Medicaid reimbursements to hospitals and providers are set by elected politicians and unelected bureaucrats. Much of the artificially low reimbursements are simply cost-shifted to the privately insured and the uninsured, another hidden cost of the marketplace.
Another example of a hidden cost to the marketplace is the administration of COBRA and State Continuation plans. The ARRA, aka the “Stimulus Law,” mandates that private businesses and insurance carriers administer the 65% subsidy offered to employees who are involuntarily terminated. This administration cost has been totally absorbed by the private marketplace. Some insurance carriers are now presenting terminated employees a nine-page document, whether they’re even eligible for the subsidy.
COBRA administration itself is a massive inconvenience to businesses, especially small businesses. A business can be held hostage to a specific insurance carrier due to adverse health issues of former employees or former spouses.
True reasons for rising premium costs are not understood by the general public. It is therefore very easy for politicians, and their willing accomplices in the media, to manipulate the electorate in focusing their anger of rising costs at private businesses. Up to 40% of our population now believes that health care is a “right,” meaning someone else is responsible for paying for their care.
A non-partisan study group, The Congressional Research Service, released its findings for 2007. Of over 2.2 trillion dollars of health care expenditures, it was found that 1.3 trillion of it, 60%, was attributed to public sources.
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GOALS OF THE NEW HEALTH CARE SYSTEM
Elimination of employer-based health plans. True portability will be established once every individual “owns” their own plan.
By eliminating Medicare and Medicaid plans, individuals will not be “branded” in restrictive plans, whether by provider or by benefits.
Dismantling of most Federal and State bureaucracies that oversee our entire heath care system, beginning with the Department of Health and Human Services.
Establishment of a new Federal agency, in charge of disbursing funds of a new, needs-based subsidy and voucher system.
Waste, fraud, and abuse should be massively reduced, as claims will be totally processed within the private marketplace.
By eliminating the cost of health care from a business (other than a potential tax), wages/salaries could be adjusted upward to some degree.
Specific businesses or industries should be put in a better competitive position against foreign competitors.
True competition should emerge, triggering more efficiency, and cost control within the entire system.
Encouraging consumers of health care to become more cost conscious, as they shop “price” as well as “quality.”
Relationship between doctor and patient should be preserved, if not strengthened.
Jobs within the private sector should grow, as claims departments within the health insurance industry should expand, as well as sales/marketing staffs.
Specific insurance carriers could team with clinic systems specializing in specific illnesses or diseases, tailoring a health plan catering to specific needs.
Politicians and government bureaucrats are stripped of a portion of their power and control over ordinary people and the private marketplace.
Veteran benefits as offered through the Veterans Administration remains separate.
Tort Reform to rein in more hidden costs of our current health care system.
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BASE POLICY
The cornerstone of health insurance plans is a High Deductible Health Plan with a Health Savings Account attached. The individual deductible will be established as $5,000, family deductible will be $10,000, 100% coinsurance. In other words, the individual out-of-pocket maximum is $5,000, and the out-of-pocket maximum for families is $10,000.
A commission will be established by the new Federal agency to establish mandates; what benefits will be included in the policy. It will consist of a cross section of all interested parties of the health care system.
Pricing will also be established by this commission. It could be broken down into different tiers; 20-year age brackets for all adults over the age of 21 (21-40, 41-60, 61+).
Another age division could be 21-50, and 50+, thus making it easier to establish benefits mandates, such as maternity.
Another pricing consideration could be basing premium on the cost of living in specific areas. It might be feasible to break down cost of the Base Plan into a couple of categories, whether based on population size or access to metropolitan facilities.
Renewals for the first five years are to be pegged at a 5% annual increase, January 1 of each year.
The Base Plan deductible is based on the calendar year, January 1 through December 31, as are the Health Savings Accounts contributions.
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HEALTH PLAN PREMIUM PAYMENT
The system of tax credits, vouchers, and subsidies is based on the Base Plan charge.
Individuals/families that are paying the entire premium themselves will get a tax credit for each month of a calendar year they’ve paid premium, not subject to any income limits.
They are also eligible to contribute into a Health Savings Account for the full deductible amount, which is fully tax deductible.
Any adult 21 or older residing in the country is eligible to purchase a policy, no longer eligible to be considered a dependent. (Exceptions are to be made for disabled adults to remain on a parent’s / guardian’s policy). Only U.S citizens and legally documented residents are eligible for the tax credit.
For individuals/families that can afford to pay the premium, but not able to cover the deductible expense, those who qualify will be offered a voucher system, to be established for insurance carriers to submit for reimbursement from the Federal government.
Again, only U.S. citizens and legally documented residents are eligible for vouchers.
For individuals/families who also are unable to pay the premium itself, those that qualify will be directly subsidized by the Federal government.
Once more, only U.S citizens and legally documented residents are eligible.
For those individuals/families who find themselves in sudden economic hardship, such as lay-off, extended illness, or death of a spouse, 90-day vouchers and subsidies can be made available for those that qualify.
“Qualifying” would be determined using poverty level guidelines; percentages to be determined.
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MISCELLANEOUS GUIDELINES
Enrollment is totally voluntary. Pre-existing conditions are waived, if enrollment is done timely (such as a 90-day requirement).
If an individual chooses to remain uninsured, life threatening situations will still be treatable at an emergency room, but subsequent medical bills will not be dischargeable in bankruptcy.
In a life threatening situation treated at an emergency room, where the patient happens to be an illegal alien, and cannot pay, the cost of the treatment will be turned over to the Federal government to present to the home country of the individual.
If an illegal alien secures coverage through a health insurance carrier, and subsequently is deported, on the day of deportation the insurance contract with the individual is terminated, with no further liability assessed to the insurance carrier.
The “anchor baby” law will be repealed.
In regards to “tort reform,” an arbitration panel will be established within each State to adjudicate grievances from individuals, or their estates, with a legislated maximum for non-economic damages to be established.
An individual / estate can waive their right to arbitration for both economic and non-economic damages, but a “loser pays” system will prevail within our civil court system.
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ALLOWING THE PRIVATE MARKETPLACE TO COMPETE
Insurance carriers are to be allowed to market in all 50 States, subject only to licensing and bonding requirements, in order to market health insurance products.
Standardized language in respect to coverage of medical conditions, and payments schedules will be adopted.
No State mandates on what must be covered in a policy.
As long as the Base Plan is offered, an insurance carrier may offer any combination of pricing combinations with benefits, with standardized language in respect to medical coverages and exclusions. With any deviation in coverage from the Base Plan, a separate waiver form will be provided for the consumer.
All organizations that market health services or products directly to the public will be required to post those prices directly on a Master Website. Whether that website will be under the purview of the Federal government or through a private clearinghouse-type organization to be determined.
Health care services and products that are not marketed directly to the public do not have to be published.
Providers would also be required to post procedure and testing prices at their business location. “Surgical” procedures will be allowed a percentage of leeway of price deviation due to potential of complications during surgery or post-op.
Possibility of “outcome-based pricing” to be negotiated between insurance carriers and providers.
Provider “specials of the month” could enter the health care lexicon.
Pharmacies will also be required to post pricing information on the website, and provide “counter” access to pricing.
Claim disputes between insurance carrier / policyholder or carrier / provider can be assigned to arbitration after a specified period of unresolved issue.
An insurance carrier who has generated claim awards due to arbitration or lawsuit equal to 75% of their bond in a given State, must increase their bonding by that given percentage, or cease doing business in that State.
A temporary or permanent tax on business has to be considered, in order to kick-start the funding for the entire country. A declining tax for a set period of years is one possibility. Another possibility is a two-tier tax system; maybe 2% payroll tax for businesses with gross revenue less than $5 million, 4% for over $5 million. 7
1. Cap lawsuits at out of pocket expenses only.
2. Loser pays applies for all healthcare lawsuits deemed to be frivolous (announce this in advance of the case).
3. Remove all federal government involvement. Let the states decide.
The free market will take care of itself once you remove Big Law and Big Brother.
Was it William Shakespeare that said “First, kill all the lawyers?” Also, in this day and age, we might also [figuratively] add quite a few judges to that, too. If it does not involve a basic Constitution-confirmed right that has been abridged [and I don’t mean that bastardization excuse of the commerce clause], the Federal Government has no business sticking it’s nose into state-regulated judicial actions.
I have been in the securities industry for over 20 years, I have watched my industry, as well as business in general, adopt the “naturally free market” concept of “creative destruction”. A free market drive to higher quality and efficiency with lower costs.
Any system that increases complexity (when controlled by people) will be doomed.
Best of luck.
My main intention in posting my “blueprint” is to generate a “real” conversation amongst people to first understand what our health care system is, how it got there, & to address the issues with “reason,” instead of simple “slogans.”
The health care system to which we have grown accustomed is about to implode; whether ObamaCare is implemented. Just re-electing Republicans to majority status isn’t going to fix it. Remember, it was a Republican President, Republican Senate, and Republican House that gave us Medicare Part D in December, 2003.
At least half of all employers that currently offer health plans to employees would dump them in a heartbeat. What would each of you Freepers do then? If you’re a smoker, over 40, and on any meds, you’re declined! That’s the free marketplace! Enjoy the “risk pool” coverage in your individual state.
Think you don’t need coverage? Think we can go back to the days of doctors making house calls? Think you can take care of yourself with only proper nutrition & exercise? Good luck to all of you! Maybe 10% of the population fits into those combined categories.
The day isn’t that far off when you’ll spend an entire day in the ER waiting to be treated. Live in the countryside, need a quick ambulance/chopper ride for acute care? Good luck in the future!
I’ve tried to put together a workable solution to begin the dismantling of government bureaucracy in our lives. It’s not going to be free, though. For all of you small government “purists,” come up with your own solutions for our country, not just your individual/family circumstances. It’s not that simple!
A Major factor in spending Pyschology is People must pay Upfront and then get reimbursed. On OutPatient stuff.
The US Market Unhinged in the Early Sixties from getting Insureds to pay doctor x-rays then get reimbursed.
The TOTAL Balance of Medical cost between Inpatient and Outpatient is exactly Opposite 30-70
People Go To Physicians for Litle things that would be skipped if it had to be Paid then reimbursed.
30 Years ago when I lived in Chile They Privatized Social security and their UK style Health Scheme! It is functioning quite well.
price discovery
patient physically and fiscally involved in the process
This is a really good, complete, intelligent proposal
Does all the things the dumb Dems and the dumb Repubs could not or would not do.
Why can’t we have this guy in the government,
or running some part of the government ... ?????????
I think you have done a truly excellent job
and I thank you for your hard work and time.
Email it to 1,000 politicians and newspapers and blogs,
maybe then you’ll get some coverage.
Again, excellent proposal.
hope it gets a lot of play in the blogosphere if not elsewhere.
Glenn Beck? Hannity? Rush? Others ???????
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