Tag Archives: President Obama
One of President Obama’s most frequent health reform mantras is, “If you like your health care plan, you can keep your health care plan.” This is consistent with his belief that we “must build on the current employer-based system” that insures 158 million people who comprise the vast bulk of all privately insured Americans. There is just one problem with this approach: employer-provided group insurance is dying and cannot be saved. Despite its longstanding dominance, group insurance, whether self-funded or provided by outside insurers, suffers from major flaws that are increasingly exposing its fundamental unsuitability as an even partial solution for effective health care reform. This is true for all employers, no matter what size. Here are group insurance’s more pronounced shortcomings:
1. Lack of Portability: Group insurance ties the individual to his or her job, an anachronism in an era when people change their jobs as often as their cars. And if you lose your job through layoffs or illness, you soon lose your insurance as well. If you can’t find affordable individual coverage, then welcome to the ranks of the uninsured.
As we approach Thursday’s bipartisan health summit, no one has yet successfully challenged the comprehensive health reform proposal I describe in my book, speeches, media interviews, and this blog. It has withstood all technical, actuarial, financial, behavioral, and economic challenges to date. This would be gratifying if it weren’t for one annoying loose end—the political issue.
Almost everybody tells me that my approach’s lack of sound-bite simplicity renders it DOA as a workable legislative agenda. They have a point. As bad as our health care system is, it’s not yet bad enough to engender the kind of political will necessary to put American consumers fully in charge of buying their own health insurance and medical care. Until we get there, let me offer a simpler, interim proposal that will immediately offer relief from out-of-control medical costs: we should make everyone financially responsible for his own preventable illnesses.
As the Democrats and GOP leaders prepare to meet with the President at the February 25 health summit, the Republicans have a big problem. They don’t have a plan. While demanding a clean-slate do-over from the Democrats, all they have to offer in return is a grab-bag of simplistic, ineffective remedies that won’t fix the problems of our unsustainable health care system. They lack the vision thing. They need to recognize the market failure at the root of the system’s dysfunction and to propose the following actions to fix it. (Note: Hyperlinks provide additional discussion for those wanting to delve further.)
First, let’s agree on our ultimate goals. Neither party has done this. Here they are:
1. Access to affordable health insurance for all Americans
2. Sustainable medical care affordability and value
3. Free-rider prevention that allows universally available insurance to work
4. Voluntary participation with no individual or employer mandates
5. Financial protection against unaffordable, medically necessary care
6. Individual choice of insurers, providers, and treatments
7. Portability of coverage regardless of employment or government assistance
8. Effective prevention of chronic diseases that now consume 75% of total medical costs
As America’s six million small business employers (1-499 employees) increasingly struggle to stay afloat during the worst economic downturn since the Great Depression, the President and U.S. Congress are working hard to saddle them with new health insurance mandates that will sink many and force many more to lay off workers. The proposed legislation—named without a whiff of intended irony The Affordable Health Choices Act—will require all but the smallest employers to offer massively rich health benefits that far exceed what most provide today.
Besides the benefits, the bill requires employers to directly shoulder 72.5% of single and 65% of family premiums—far more than many pay now. Any company that fails to comply will be forced to pay a fine to the government of up to 8% of total payroll—money that will not be available for their own employees to buy insurance. Instead the funds will flow into the federal till to help subsidize American families making up to $88,000 per year—instantly converting much of the country’s middle class into a new welfare class.
According to President Obama, hordes of helpless American are being “held hostage by health insurance companies that deny them coverage or drop their coverage” when they get sick. That was the central message he took to the road last week in what appears to be an increasingly desperate attempt to save his ponderously unworkable trillion-dollar health reform package. In conjuring up insurers riding roughshod over hordes of Americans, the President also tramples the truth. The fact is that the 91% of all privately insured Americans with employer-based insurance never face denial of coverage for pre-existing conditions (so-called “pre-ex”) or loss of insurance when they get sick (called “rescission”). It’s illegal.
What the President is spending so much political capital castigating is the remaining 9% of the private insurance market—the part that provides essential individual health insurance to people ineligible for employer coverage. Pre-ex and rescission are relevant here because individual insurers must operate differently from employer-based insurers.
“(B)y making Medicare more efficient, we’ll be able to ensure that more tax dollars go directly to caring for seniors instead of enriching insurance companies. This will not only help provide today’s seniors with the benefits they’ve been promised; it will also ensure the long-term health of Medicare for tomorrow’s seniors.” President Barack Obama’s op-ed in the 8/16/9 New York Times.
Let’s see, Medicare’s total unfunded liabilities are somewhere around $65 trillion. The amount the President would like to cut in Medicare Advantage payments to those unjustly enriched insurers is about $11 billion per year. At current long-term Treasury interest rates, the savings would handily cover the interest on the interest on the interest on the debt required to make Medicare whole.
It’s a start, I guess.
“(W)e will require insurance companies to cover…colonoscopies. There’s no reason that we shouldn’t be catching diseases…on the front end.” President Barack Obama’s op-ed in the New York Times, 8/16/9.
Uh, I don’t think it’s that end, Mr. President.
President Obama just missed a perfect chance to save America’s prescription drug consumers a cool five billion dollars per year. In a recent speech on health care reform, the President said, “If there’s a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half price for the thing that’s going to make you well?”
If only he had changed the “blue” to “salmon pink,” the “red” to “purple,” and the “half the price” to “an eighth the price,” he would have thrown a bright light on one of the great economic absurdities of modern American medicine: people (and their insurers) paying $170 per month for the prescription acid-reflux drug Nexium when the nearly identical Prilosec OTC costs about $22/month—and without a doctor’s prescription. That’s right. There’s nothing in Nexium that isn’t in Prilosec OTC which itself used to be a major prescription medication before its patent ran out several years back. Every doctor I’ve asked says one works as well as the other for almost everyone. Taking Nexium? Ask your doctor. And save.
I recently spent the better part of a Colorado summer Saturday reading the worst parts of something called The Affordable Health Choices Act of 2009. Purported to constitute health care reform, its thousand pages were introduced this past week by the chairmen of the three congressional House committees with jurisdiction over health policy. It is the single most egregious piece of health care legislation to cross my desk in four decades. Hillary Care (yes, I read that one too), nonsensical as it was, represented an order of magnitude more thought than this bill which is so blind to basic economics on so many levels that I marvel at the ability of the three chairmen, Speaker Pelosi, President Obama, and the AMA to praise it with straight faces.