Solving the Health Coverage Crisis

stethoscope  Written by Meyer J. Persow    
Since the passage of the Affordable Care Act, a/k/a Obamacare, in 2010, people have either loved it or hated it. It’s been called socialistic and government over-reach or not going far enough. As the old maxim says, you can’t please everyone. But I have two proposals that might help “solve” this problem.

When I was growing up in Denver, the big issue was busing for integration. Millions of taxpayer dollars were spent by the school board fighting court orders that were not going to be reversed. The only winners were the lawyers who reaped huge fees. The same has been happening with Obamacare. So instead of trying to overturn it (seriously, who wants to be known as the politician responsible for taking away healthcare from someone with a pre-existing condition), why not work together to fix it?

I propose that the Federal Employees Health Benefits Program (FEHB) be opened up to those who don’t have health coverage. The FEHB is the country’s largest health plan, a system of “managed competition” that is a benefit offered to civilian employees, their families, and retirees. There are about 20 national plans and about 230 local plans that enrollees can choose from. Because of the large pool of insured members, prices are kept relatively low, especially when compared to what’s being offered on the health exchanges. Prescription co-pays are low on some plans, higher in others; it just depends on which plan you choose. And when an individual becomes eligible for Medicare, the FEHB becomes a secondary insurance.

The Federal government pays, on average, about 75% of the premium for enrollees, more for postal employees (due to contracts with the Postal unions). Now, don’t expect the same cost-sharing for non-government enrollees. They would have to pay the full premium based on the plan they chose. And the same restrictions for covering children would remain in place (age 26). Simple? Yes and no. Many details would need to be worked out. But it’s a start.

The second part of solving this is tort reform. I think we realize that a major portion of medical costs go to malpractice insurance. And I think we all roll our eyes when someone who buys a cup of coffee from McDonald’s is awarded $1 million dollars because they spilled hot coffee on themselves (coffee is usually hot, unless you’re ordering iced coffee) or when someone is awarded hundreds of millions of dollars for something that went wrong with their medical treatment. I’m not saying that all multi-million dollar awards aren’t deserved (see the Earl Bradley case for example), but we need to put a limit on how much juries can award, except in egregious circumstances (like a doctor taking a selfie of a famous patient while operating on them). We’ve done this with capital punishment, setting the bar very high for the ultimate penalty to be handed down, so why not do the same with tort reform?

I don’t see either of these as a Democrat vs. Republican issue, or a conservative vs. progressive issue. I see this as a “let’s work together to do what’s right” issue. Let’s save the philosophical debates for foreign aid, Common Core, red light cameras, and whether we really care about the Kardashians.

22 Comments on "Solving the Health Coverage Crisis"

  1. I have said it at least twice before and will repeat it now…Obamacare needs to be scrapped and true healthcare reform needs to start at the top. Why does a routine colonoscopy cost almost $9,000 in NYC and $1,900 in Baltimore, MD? Better yet, why does the procedure cost vary so greatly within city blocks of each other? What about doctors who own or have a vested interest in clinics charging premium prices to fund the clinics that they are sending their patients to? There’s a reason routine procedures in this country cost three to ten times more than in other countries. There’s a reason we rank the lowest among industrialized nations in all 21 aspects of healthcare as rated by the International Federation of Health Plans, a global network of health insurers.

    Scrap Obamacare and start the reform at the top to bring healthcare costs down. You are right – tort reform should be included. Once everything at the top is taken care of, then come for the little guy.

  2. waterpirate says:

    The ability to sell health insurance accrossed state lines would do alot to even the playing field. Now we only have the choice to purchase te insurance that the DE insurance Czar deems right for the citizens of DE.

  3. Honi Soit says:

    The high costs of health care are grounded in a system that encourages waste because patients want or insist on tests and procedures and doctors are all too willing to oblige them. And that’s because patients don’t know what anything costs and because doctors are compensated for all of these tests and procedures. Obamacare had nothing to do with this. It just tweaked a failing system in an attempt to expand coverage and reduce costs. Results are very mixed.

  4. Meyer says:

    Waterpirate – using the FEHB model with national and local plans would be an answer to what you brought up.

  5. Dave says:

    “The ability to sell health insurance across state lines would do a lot to even the playing field. Now we only have the choice to purchase tge insurance that the DE insurance Czar deems right for the citizens of DE.”

    The only thing stopping them is the fact that each company who wants to sell across state lines has to deal with 50 status insurance regulators, making all but impossible. The reason FEHB does not have that problem is that they are national federal government plans, not subject to state regulation. We do not have a national insurance commissioner and would have to create a regulatory agency, staffing, etc. to perform that function.

    Now what God fearing Republican is going to advocate for creating regulation and another regulatory agency? Bottom line, the only thing stopping selling across state lines is politics and lack of will to govern, even when it means more regulation.

  6. Meyer says:

    Actually, Dave, we would let OPM, which currently oversees the FEHB, to continue to do so. No new agency, no new bureaucrat. The system is already in place.

  7. Frank Knotts says:

    Meyer, good points and ideas. I can live with pre-existing conditions, and my daughter loves the till 26 rule. The problem I have is the mandate. Why must I buy what I don’t want? We can make insurance more cost efficient and available by using you model and tort reform and opening the states up to all insurers which would create competition. The other thing is too focus on jobs and the economy so that we have more people who can afford insurance and less need of subsidies.
    Paid for by tax payers.

  8. Dave says:

    You have much greater faith in OPM than I do. Could be because your perspective is outward looking (the OPM perspective). You might want to ask those who have been on the receiving end of OPM (the folks in Boyers are the exception to the rule. They seem to be able to accomplish their mission quite well). The DC folks – no so much.

    If you want to expand FEHB, which is find by me, by the way. I would want a group whose core competency and sole mission would be to manage that effort.

  9. Gerald says:

    Obamacare is forcing out the health companies and health care professionals. No one should be forced or penalized to buy health insurance. Public can choose from several health insurance providers and carriers in all the States to keep costs down. No subsidies. Health insurance is not free and off the backs of the middle class workers of America. Its an incentive for people to plan careers and work to obtain it.

  10. Meyer says:

    Dave, I have to agree with you on Boyers. And I worked for OPM for 25+ years, so I saw all of the good and bad of the agency. I think that reorganizing the agency in such a way that personnel would only work on FEHB and administering it would be easy enough, as long as the politicians and entrenched bureaucrats didn’t get involved. Also agree with you Frank about being forced to buy the insurance. But shouldn’t we have something in place so people without coverage don’t use emergency rooms for routine medical problems, as I witnessed time and again when I lived in DC?

  11. Honi Soit says:

    So Meyer, Let’s suppose you are enrolled in family coverage in FEHB’s non-postal Blue Cross/Blue Shield Plan. In 2015, you’ll pay:

    $5,544 ($462/month) while the gov’t chips in $11,664 ($972/month).

    Under your proposal, those without insurance could opt in to FEHB–but without the gov’t subsidy. So for the same policy, a family would pay $17,208 ($1,434/month).

    You say that premiums for policies are low compared to those available on the exchanges. Huh??

    US News & World Report shows premiums for nine 5-star plans on the Delaware exchange as a under $10,000 for families.

    Am I missing something here?

    http://health.usnews.com/health-insurance/delaware/plans/family

  12. waterpirate says:

    How true it is. The fact is that the rate I pay after AHCA went down slightly, 36.00 per month I think. That barely registered on my fiscal radar. What did register on my fiscal radar was the expanded script coverage, with no more copays. my outlay per month for those scripts went down significantly. I also enjoy no copays for my routine visits to the Dr. office. another plus.

    I have no problem expanding govt. on a federal level, if the state level insurance czar’s are eliminated.

  13. Frank Knotts says:

    Meyer, not sure having insurance stops people from using the ERs for colds. Don’t think it is simply the uninsured, but also the impatient and lazy that do this.
    I keep coming back to the fact that no one is denied health insurance. The poor have Medicaid and the elderly have Medicare. So who was the majority of uninsured? I believe that the large majority were likely those who chose to take the risk of not buying insurance. The young who will of course live forever and never be sick, and people who just didn’t want to spend the money, or people with enough capital to pay out of pocket.
    Why should Bill Gates be mandated to buy insurance?

  14. You forgot those with pre-existing conditions that were routinely denied health insurance. Insurance companies have this crazy idea that they should only have to insure people who they think will never or rarely file a claim. What Obama needed was a bunch of healthy young people to buy health insurance for themselves so all the sick people who will definitely be gobbling up the claim money can be covered by the insurance companies that normally wouldn’t cover them. Obamacare is, in effect, a big welfare program.

  15. William Christy says:

    I think there is a huge pool of people who are uninsured that are employed by companies that keep them below the number of hours worked so the employer doesn’t have to offer insurance. Those jobs in many cases don’t pay enough for a person to get private insurance.

    Both Medicaid and Medicare are overrun with rampant fraud that for the most part goes unchecked. Even when the provider is tried and convicted they rarely make restitution to the government.

  16. There’s an even more egregious practice – companies hiring “independent contractors” to fill positions. The way it works are employees are “outsourced” to a third party company, that re-hires them as an “independent contractor” to do the job they had always been doing.

  17. Frank Knotts says:

    “Both Medicaid and Medicare are overrun with rampant fraud that for the most part goes unchecked”
    .And what makes anyone think that this system won’t fall prey to the same thing. Is anyone really going to think that there are not people out there claiming less income in order to get the most subsidies as possible? Anytime government is in charge of what should be private sector, there will be fraud.

  18. Frank Knotts says:

    Oh I forgot, and when you add in a mandate to buy, then cost is bound to rise, no matter the promise or the intention in the beginning.

  19. But it’s not a tax so you should feel good about that! :) (Yes, that’s strong sarcasm)

  20. William Christy says:

    Frank you won’t get any disagreement from what you stated. My point about medicaid and medicare fraud wasn’t the people claiming less income to get more subsidies, it was about health care provider fraud. Fraudulent claims are submitted by doctors, nursing homes, hospitals all the time, and they are routinely paid by Medicare.

  21. Meyer says:

    Honi, remember that the larger the pool, the greater the chance to drive down the price by spreading out the cost. Also, don’t forget that I’m not ruling out the subsidies that are currently provided under ACA.

  22. Frank Knotts says:

    That kind of fraud goes on with all insurance.

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