Improving Access To Health Care

Now it’s time to get down to specifics.  Below, I will outline a step-by-step approach that can get us from point A (where we are now- in a mess) to point B (health care system access for all).  We can accomplish this but only if most of us really want to fix our dysfunctional health care system; otherwise we will continue to see the quality of health care fall as costs continue to rise.

Step one:  health care coverage for anyone who has the bucks and wants to buy it.

Right now, many people, particularly those who are self-employed or who own small businesses, cannot afford to purchase health care coverage because of the high costs.  It is nearly impossible to obtain coverage without breaking the bank for someone on their own or as part of a small group (e.g., a small business).  If the individual or someone in the individual’s family or someone in the small group has a “pre-existing condition” such as diabetes mellitus, heart disease or cancer; it can be a hopeless situation.  For example, in Missouri , my home state, a family of 4 that includes a child with diabetes would pay between $15,000-$20,000 to obtain high quality coverage; without the diabetic child, the cost would be about $9000-$12,000, assuming they could  find a plan that would take them.  It’s a desperate struggle for some families willing and able to pay a reasonable price for health care coverage. (I’m not sure how to define reasonable other than affordable- a cost not requiring the family to choose between food and health coverage or even college for the children vs. health care coverage)

So, I would start down the road to universal coverage by letting anyone buy into their state health care plan, the plan that covers state employees, including elected officials.  All 50 states in the U.S. have insurance plans for their employees.  In Missouri, a very high quality health care plan through the state costs about $12,000 for a family and about $7000 for an individual.  The state pays about 70% of the costs and the rest is paid by the employee.  The plan has no exclusions for pre-existing conditions and a short waiting period before coverage is in effect.  So, I’d let anyone willing to fork over the total annual premium join the plan. It’s unlikely the insurer would care much, particularly if the state required this as part of their contract with the insurer.  The additional administrative costs would be trivial.  So, the idea is to let people join large health care plans that keep premiums low (well, maybe not low, but manageable) by spreading out costs among a large number ofl group members.

The plan I am proposing is not an untested idea; the approach is already being applied in a number of states, apparently without difficulty.  Why hasn’t every state instituted such a plan?  I suspect it is fierce opposition from insurance companies, but I’m not sure who to blame.  I am not aware of the range of plans available to state employees (in Missouri or elsewhere- e.g.,  low premium/high deductible plans vs. standard plans, but the full range of plan options should be available to anyone with the cash.

Ok.  What does this accomplish?

This first step is important, not so much for the large number of uninsured people who finally will be able to obtain adequate health care coverage for themselves and their families (my guess is that this step will decrease the number of uninsured by only about 10-15% at most), but by what comes next.

Step two: a mandate for employer and employee health insurance contributions

Now we are into the tricky stuff.  Remember, we have already agreed that it is in everyone’s best interest, that we have universal health care coverage.  We must find a way to accomplish this in a manner that is fairly simple to institute and does not add appreciably to government costs for health care (if you hadn’t heard, our government is already in a serious deficit mode).

At present the majority of people in the US who have health care coverage have it through their employers.  This comes to about 70% of workers in the US who have health care coverage.  As we discussed earlier, that percentage is slipping because of rising costs.  I suggest that we build on what we already have in place rather than creating something brand new and untested.

First, all employers and their employees will have automatic payroll deductions as a percentage of salary to be used for health coverage.

The idea of payroll deductions is nothing new- employers and employees already contribute equal shares to help cover Social Security and Medicare costs.  These mandatory contributions would be tax deductible for employers (as are current contributions towards employee health insurance) and not part of taxable income for employees.  I have not tried to figure out how much the payroll taxes should be but the economists can easily sort that out; the tax must be high enough to cover the cost of the most basic federal employee health care coverage.  Thus I have opted to use the federal government health care plans as a benchmark in determining costs rather than the 50 individual state government plans.  As I will discuss below, this does not mean that people are forced to buy into the federal employee health care plans.

So, what happens next?

The money generated by the payroll tax would then be used to finance the purchase of health insurance by anyone who files a federal income tax return.  The federal government would deposit in a special bank account enough money to cover the costs to purchase the most basic federal employee health care plan.  Individuals claiming dependents would be provided more money than individuals without dependents since health insurance plans cost more for families than for individuals.  The money in the special account could only be used for health care coverage.  The employee could buy into the federal employee plan, their state plan or any other federal government-approved health insurance plan; all plans must meet certain minimum standards set by a panel of experts.    People might want to participate in plans offered by their employers if the plans were better than the plans available through the government.  Individuals would be required to purchase health insurance for themselves and their dependents- this is already the law of the land in Massachusetts and it seems to be working well even though the government is not giving people the money needed to purchase the health coverage.  If individuals do not purchase health coverage, they and their families will be automatically enrolled in the basic federal employee health plan.

So, what does all this accomplish?

In summary, I have described a plan to provide health coverage for all Americans without spending appreciably more than we are already spending on health care, and likely much less.  I do not believe the details regarding setting up the special bank accounts will be difficult to accomplish.   The biggest obstacles to my proposal will be from those opposed to new taxes and businesses that do not at present provide health care coverage for their employees.  There is no question that these businesses will have increased expenses compared to businesses that currently provide health care coverage for their employees.  One way I have attempted to “soften the blow” is to use the payroll tax approach rather than a flat fee per employee approach; the latter approach would place a heavy burden on businesses that have many employees paid relatively low wages, such as a fast food restaurant chain.  By using the payroll tax approach, such an employer’s expenses would be much lower than if it were a flat fee/per employee towards health coverage.

What about part-time workers?  What about people who are unemployed?

I’m not sure how best to handle special situations such as part-time workers and people who are unemployed for whatever reason.  At the moment, I think the best approach is to provide funding for anyone who files a federal income tax return.   Of course, payroll taxes would be collected for part-time workers just the same as for full-time workers.

What about Medicaid and Medicare?

Under the “Goldstein Plan”  Medicaid would no longer be needed  to provide health coverage for children; all individuals who file federal income tax returns will be eligible to receive funding for health care coverage for themselves and their family members, regardless of income level.  The one exception would be people over age 65 years; they would continue to be enrolled automatically in Medicare.  Later we’ll tackle the Medicare mess-  this will be critical in reining in health care costs.  But, let’s do one thing at a time.

Putting it all together

I have outlined an approach that I believe will fix one of the two major barriers to high quality health care in the U.S., that of health care coverage (remember, the other major barrier is high and rising costs).  My proposal will surely have its critics, particularly those running businesses that do not currently offer health care coverage for their employees as well as those people who are philosophically opposed to new taxes for whatever reason.  In defense of my plan, I would point out that in the long run, the new taxes should lead to much lower total health care costs when coupled with specific cost cutting measures I will discuss in an upcoming entry.  I would also point out that in the short run most employers and employees would find the new payroll taxes more than offset by eliminating what is currently being spent on health care coverage.

For those people whose hearts were set on universal health care coverage based on a “single payer system”

What I have proposed is a plan that assures universal health care coverage.  The plan is more or less a single payer system but still allows the free market to flourish.  I do predict the plan would force private insurers to cut costs (and maybe profits?) if they want to be competitive.  I suspect most of the cost cutting would be the result of decreased administrative costs  and many more negotiated costs for hospital and clinic services as well as for medications (have you been to Wal-mart, Target, or even your local pharmacy lately?  It’s hundreds of generic prescription drugs at rock-bottom prices (e.g., a 90 day supply of this or that drug for $10.00).

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