Is it OK for people not to have health insurance? - New Yorker article

[lawyerlee]

THE MORAL-HAZARD MYTH (http://www.newyorker.com/fact/content/articles/050829fa_fact)
The bad idea behind our failed health-care system.
The New Yorker

by MALCOLM GLADWELL
Issue of 2005_08_29
Posted 2005-08-22

Tooth decay begins, typically, when debris becomes trapped between the teeth and along the ridges and in the grooves of the molars. The food rots. It becomes colonized with bacteria. The bacteria feeds off sugars in the mouth and forms an acid that begins to eat away at the enamel of the teeth. Slowly, the bacteria works its way through to the dentin, the inner structure, and from there the cavity begins to blossom three-dimensionally, spreading inward and sideways. When the decay reaches the pulp tissue, the blood vessels, and the nerves that serve the tooth, the pain starts—an insistent throbbing. The tooth turns brown. It begins to lose its hard structure, to the point where a dentist can reach into a cavity with a hand instrument and scoop out the decay. At the base of the tooth, the bacteria mineralizes into tartar, which begins to irritate the gums. They become puffy and bright red and start to recede, leaving more and more of the tooth’s root exposed. When the infection works its way down to the bone, the structure holding the tooth in begins to collapse altogether.

Several years ago, two Harvard researchers, Susan Starr Sered and Rushika Fernandopulle, set out to interview people without health-care coverage for a book they were writing, “Uninsured in America.” They talked to as many kinds of people as they could find, collecting stories of untreated depression and struggling single mothers and chronically injured laborers—and the most common complaint they heard was about teeth. Gina, a hairdresser in Idaho, whose husband worked as a freight manager at a chain store, had “a peculiar mannerism of keeping her mouth closed even when speaking.” It turned out that she hadn’t been able to afford dental care for three years, and one of her front teeth was rotting. Daniel, a construction worker, pulled out his bad teeth with pliers. Then, there was Loretta, who worked nights at a university research center in Mississippi, and was missing most of her teeth. “They’ll break off after a while, and then you just grab a hold of them, and they work their way out,” she explained to Sered and Fernandopulle. “It hurts so bad, because the tooth aches. Then it’s a relief just to get it out of there. The hole closes up itself anyway. So it’s so much better.”

People without health insurance have bad teeth because, if you’re paying for everything out of your own pocket, going to the dentist for a checkup seems like a luxury. It isn’t, of course. The loss of teeth makes eating fresh fruits and vegetables difficult, and a diet heavy in soft, processed foods exacerbates more serious health problems, like diabetes. The pain of tooth decay leads many people to use alcohol as a salve. And those struggling to get ahead in the job market quickly find that the unsightliness of bad teeth, and the self-consciousness that results, can become a major barrier. If your teeth are bad, you’re not going to get a job as a receptionist, say, or a cashier. You’re going to be put in the back somewhere, far from the public eye. What Loretta, Gina, and Daniel understand, the two authors tell us, is that bad teeth have come to be seen as a marker of “poor parenting, low educational achievement and slow or faulty intellectual development.” They are an outward marker of caste. “Almost every time we asked interviewees what their first priority would be if the president established universal health coverage tomorrow,” Sered and Fernandopulle write, “the immediate answer was ‘my teeth.’ ”

The U. S. health-care system, according to “Uninsured in America,” has created a group of people who increasingly look different from others and suffer in ways that others do not. The leading cause of personal bankruptcy in the United States is unpaid medical bills. Half of the uninsured owe money to hospitals, and a third are being pursued by collection agencies. Children without health insurance are less likely to receive medical attention for serious injuries, for recurrent ear infections, or for asthma. Lung-cancer patients without insurance are less likely to receive surgery, chemotherapy, or radiation treatment. Heart-attack victims without health insurance are less likely to receive angioplasty. People with pneumonia who don’t have health insurance are less likely to receive X rays or consultations. The death rate in any given year for someone without health insurance is twenty-five per cent higher than for someone with insur-ance. Because the uninsured are sicker than the rest of us, they can’t get better jobs, and because they can’t get better jobs they can’t afford health insurance, and because they can’t afford health insurance they get even sicker. John, the manager of a bar in Idaho, tells Sered and Fernandopulle that as a result of various workplace injuries over the years he takes eight ibuprofen, waits two hours, then takes eight more—and tries to cadge as much prescription pain medication as he can from friends. “There are times when I should’ve gone to the doctor, but I couldn’t afford to go because I don’t have insurance,” he says. “Like when my back messed up, I should’ve gone. If I had insurance, I would’ve went, because I know I could get treatment, but when you can’t afford it you don’t go. Because the harder the hole you get into in terms of bills, then you’ll never get out. So you just say, ‘I can deal with the pain.’ ”

America’s health-care mess is, in part, simply an accident of history. The fact that there have been six attempts at universal health coverage in the last century suggests that there has long been support for the idea. But politics has always got in the way. In both Europe and the United States, for example, the push for health insurance was led, in large part, by organized labor. But in Europe the unions worked through the political system, fighting for coverage for all citizens. From the start, health insurance in Europe was public and universal, and that created powerful political support for any attempt to expand benefits. In the United States, by contrast, the unions worked through the collective-bargaining system and, as a result, could win health benefits only for their own members. Health insurance here has always been private and selective, and every attempt to expand benefits has resulted in a paralyzing political battle over who would be added to insurance rolls and who ought to pay for those additions.

Policy is driven by more than politics, however. It is equally driven by ideas, and in the past few decades a particular idea has taken hold among prominent American economists which has also been a powerful impediment to the expansion of health insurance. The idea is known as “moral hazard.” Health economists in other Western nations do not share this obsession. Nor do most Americans. But moral hazard has profoundly shaped the way think tanks formulate policy and the way experts argue and the way health insurers structure their plans and the way legislation and regulations have been written. The health-care mess isn’t merely the unintentional result of political dysfunction, in other words. It is also the deliberate consequence of the way in which American policymakers have come to think about insurance.

“Moral hazard” is the term economists use to describe the fact that insurance can change the behavior of the person being insured. If your office gives you and your co-workers all the free Pepsi you want—if your employer, in effect, offers universal Pepsi insurance—you’ll drink more Pepsi than you would have otherwise. If you have a no-deductible fire-insurance policy, you may be a little less diligent in clearing the brush away from your house. The savings-and-loan crisis of the nineteen-eighties was created, in large part, by the fact that the federal government insured savings deposits of up to a hundred thousand dollars, and so the newly deregulated S. & L.s made far riskier investments than they would have otherwise. Insurance can have the paradoxical effect of producing risky and wasteful behavior. Economists spend a great deal of time thinking about such moral hazard for good reason. Insurance is an attempt to make human life safer and more secure. But, if those efforts can backfire and produce riskier behavior, providing insurance becomes a much more complicated and problematic endeavor.

Do you think that this kind of redistribution of risk is a good idea? Do you think that people whose genes predispose them to depression or cancer, or whose poverty complicates asthma or diabetes, or who get hit by a drunk driver, or who have to keep their mouths closed because their teeth are rotting ought to bear a greater share of the costs of their health care than those of us who are lucky enough to escape such misfortunes? In the rest of the industrialized world, it is assumed that the more equally and widely the burdens of illness are shared, the better off the population as a whole is likely to be. The reason the United States has forty-five million people without coverage is that its health-care policy is in the hands of people who disagree, and who regard health insurance not as the solution but as the problem.

[lawyerlee]

Do you accept this theory of Moral Hazard? Do you have health insurance? Do you overuse it? Does that necessarily mean that uninsured people are not entitled to health coverage if they truly can't afford it?

And the truth of the matter is that following this *isn't* saving us money! We pay almost twice as much for health care as a nation than other industrialized nations, yet we go to the doctor less often. Now how does that make sense? Medicaid helps barely any of the people who cannot afford insurance or health care. Of course, if we followed the Medicare model, we *could* save money! Medicare is extremely efficient because it has utilized cost-savings measures, like prior drug authorization for certain medications, that don't compromise the quality of care, but keep costs down.

And why should insurance companies be entitled to hold us hostage and dictate the quality of our lives by controlling our access to health care? I have a good job, and I still couldn't afford everything I needed to figure out how to better treat my chronic migraines. Yet, I know I was lucky that I did have insurance to cut some of my costs and parents to help on the other end. It is my experience that most offices won't cut you the same deals as they do insurance companies if you have to pay out of pocket, either. Why should that be legal? People without insurance coverage are doubly punished through these kinds of practices.

[Tanya]

Interesting article.
I just went to the dermatologist to get moles checked for skin cancer. If I had had to pay a hundred per cent, or even fifty per cent, of the cost of the visit, I might not have gone. Would that have been a wise decision? I have no idea. But if one of those moles really is cancerous, that simple, inexpensive visit could save the health-care system tens of thousands of dollars (not to mention saving me a great deal of heartbreak).
This is me, I will admit I probably "overuse" my insurance by their definition. It is heartbreaking to hear the stories of those who don't have insurance and how that leads to teeth neglect and those social implications.
Under the Health Savings Accounts system, consumers are asked to pay for routine health care with their own money—several thousand dollars of which can be put into a tax-free account. To handle their catastrophic expenses, they then purchase a basic health-insurance package with, say, a thousand-dollar annual deductible. As President Bush explained recently, “Health Savings Accounts all aim at empowering people to make decisions for themselves, owning their own health-care plan, and at the same time bringing some demand control into the cost of health care.”
DH has this and I really do think this might be the answer.
It’s the reason that small businesses that have one or two employees with serious illnesses suddenly face unmanageably high health-insurance premiums, and it’s the reason that, in many states, people suffering from a potentially high-cost medical condition can’t get anyone to insure them at all.
This is also DH's company. They have 30 employees and 1 with MS and another with multiple problems, and this causes issues with their insurance. Right now they have a choice with their insurance (regular vs. HSA), and suprisingly, only 3 of them went with the HSA. It seems folks are scared to go with the HSA, esp. those that would exceed the deductible every year. I understand that, because for them, what would be the benefit? But for the company, if everyone went with HSAs, there would be a huge benefit.
those with significant medical problems will choose expensive health plans that cover lots of things, while those with few health problems will choose cheaper, bare-bones plans. The more expensive the comprehensive plans become, and the less expensive the bare-bones plans become, the more the very sick will cluster together at one end of the insurance spectrum, and the more the well will cluster together at the low-cost end. Yup.
Do you think that people whose genes predispose them to depression or cancer, or whose poverty complicates asthma or diabetes, or who get hit by a drunk driver, or who have to keep their mouths closed because their teeth are rotting ought to bear a greater share of the costs of their health care than those of us who are lucky enough to escape such misfortunes? That's a tricky question, because if you answer no, you are pushing social medicine. I expect to pay more out-of-pocket if I have cancer, yes. To the extent that people have gone into debt in this article, no, of course not. But I just feel lucky enough that I don't have health issues to worry about whether my premiums are paying for someone else's problems.

It is my experience that most offices won't cut you the same deals as they do insurance companies if you have to pay out of pocket, either. Why should that be legal? People without insurance coverage are doubly punished through these kinds of practices.
I agree, this is a ridiculous practice.

[lawyerlee]

Thanks for sharing your thoughts about the topic. :)

My main beef with HSAs is that they require the employer *and* the employee to contribute. And I just don't see how that helps poor people. It may be perfect for the upper middle class, but I don't think it is a tool that is designed for poor people at all. Poor people usually manage their money way better than the rest of us because they have so little of it at their disposal. So it's not like they're just being irresponsible. And when you're talking about choosing between buying grocieries for your family and putting money in your HSA account, is there any guess as to which one to pick?

I honestly can't see any reason why every person in this country shouldn't be entitled as a matter of right under the law to see a doctor at least one a year, regardless of how much he or she can pay. It could be just like Medicare in that you would have to pay a tiny amount if that is all you have, because I do think there is value in having people contribute in that it gives them dignity.

[wendalah]

This is an interesting article. I have always had health insurance through my job, but I rarely use it, not even for annual checkups or dental exams (I'm bad, I know). DH is the same way. My company provides great coverage for me and DH at next to nothing, so I obviously am good with what we have--however if we weren't in this situation, something like a Health Savings Account would be absolutely fine for us.

ETA agree though that I'm not sure how poorer people would afford it.

[Tanya]

My main beef with HSAs is that they require the employer *and* the employee to contribute. And I just don't see how that helps poor people. It may be perfect for the upper middle class, but I don't think it is a tool that is designed for poor people at all.
Yeah, but I don't think that's the employer's responsibility. The gov't should be the ones subsidizing the poor's health insurance. That's not to say I think we should go the way of socializing--I think applying the Medicare and children's care (can't think of what that's called) principle you mention would be an idea.

ETA: I thought all HSAs work in that the employer puts in around 50% of the deductible and if you don't exceed that amount, then you really pay nothing out-of-pocket.

[artist]

Do you accept this theory of Moral Hazard? Do you have health insurance? Do you overuse it? Does that necessarily mean that uninsured people are not entitled to health coverage if they truly can't afford it?

Yes, we have health insurance. (Not dental though, and in my opinion, crappy health insurance. In that regard, I consider us “under-insured”.) I think health insurance ought to be a right, not a privilege. Just I think education ought to be a right and not a privilege. (And other things too.) It seems odd that the richest nation is somehow unable to provide what I consider BASIC needs (healthcare for example), yet we are spending tons of tax dollars on what I consider to be an unnecessary war. I believe our priorities are WAY out of whack.

Do I “overuse” the health insurance I have? Not really. I am honestly afraid to go to the doctor or tell her the truth for fear of the huge deductibles or being accused of having a “pre-existing condition”. I do still go regardless. I had no choice but to go to the E.R. when I ended up having pleurisy. (And was unable to breathe without severe sharp pain, to the point I feared it could be a heat attack or collapsed lung.) I got diagnosed with asthma. I had no choice but to go to the doctor when I was coughing so much I’d vomit, and I couldn’t sleep because if I put my head on a pillow, I couldn’t breathe. I don’t consider that “overuse”.

And when I was on my parents’ plan, I went to a chiropractor and acupuncturist. Again, I don’t consider that “overuse” either since what I SHOULD have had was an MRI and surgery. The thing is, no doctor would take my back and neck pain seriously because I am “young” and “thin”. Doctors can be so infuriating at times. That is, when they assume the patient does not know his/her body. But what is more infuriating are the health insurance companies. It is infuriating to have to go through Catholic Charities to see a therapist because your insurance will not cover it. (Or won’t until you’ve paid a huge deductible. And it does NOT cover marriage counseling.)

Despite my frustration, at least we do have SOME form of insurance, crappy as it may be. Though I do wish we had better coverage with less deductibles.

I do not think that a person should be penalized for having certain health conditions

[daydreamer]

I believe health coverage should be a universal right. Do I use my insurance - yes, I do. Do I get my teeth cleaned 2x yearly? yes, I do. Is prevention cheaper than intervention? absolutely. Re: overuse (LOL), how can anyone overuse d/t all the restrictions, pre-certs, etc.? and 2. I am paying for the service, you better give me the service. And (this is where I'm going to get flamed) no one should have the right to refuse medical coverage if they can afford it. If they decline, then they should never be allowed to file bankruptcy or receive any type of gov't asst for any medical debt they incur.. We need to provide general basic health coverage to all people - I'm not talking "fountain of youth" medicine but care that strengthens us as a group as well as an individual. Bring Hilary back, we need universal coverage for all.
I was a hospital social worker for 20 years, please don't get me started.

[thedoorchick]

I have to say, despite my conservative beliefs on the subject, I've never subscribed to the "moral hazard" theory. I do think there are some things that are covered by insurance that should not be, but that's a matter of insurance companies' policies being faulty, in my opinion. I could give examples but I don't want to derail the thread with a discussion of them. In general I think that things that are nice but not medically necessary shouldn't be covered.

I do not have dental insurance because it just wasn't worth the cost of premiums to me and never has been. Well, guess what, earlier this year I had to get a crown and it cost a bucketful of money. That wasn't fun. But that was my responsibility. I have access to the insurance but I declined the coverage.

[lawyerlee]

ETA: I thought all HSAs work in that the employer puts in around 50% of the deductible and if you don't exceed that amount, then you really pay nothing out-of-pocket.
I had to go to a seminar about this topic for work in the spring, and the Treasury Department's portion of it didn't even try to pretend that the employee wouldn't have to make contributions. They're taking that as a given, the idea being that the employer would watch the contibutions of the employee.To me, that's where the idea of saying it is a choice for poor people comes in. It may be a choice for someone like thedoorchick, in her example about dental insurance, but there are large numbers of people for whom putting money in an HSA (where they can only access it for certain, specific costs) is just not feasible. Unfortunately, if medical care is so inaccessable to people that it is viewed as a luxury, they never even get to the question of doing a cost/benefit analysis. It's simply not an option. So maybe they'd use those accounts if their employers gave them money outright for them, but I do not hear a lot of that going on.

[curlyjr]

My husband and I don't have health or medical insurance. His job only offered insurance after 6 months and if it were taken out of his check we could simply not afford to pay the bills. The insurance plan in this country is a mess. There is a lot of talk about cashiers or waitresses that do not have medical insurance through their jobs, well my mother and sister are teachers with masters degrees and neither has a job that covers even half of medical bills and absolutely no dental. It really pisses me off that people can work so hard and still have to suffer because no one can get it right. We make too much for medicaid but not enough to pay for insurance and still pay the bills. It sucks.

[Irish Elf]

We have medical insurance and a flexible spending account. We put money in the flex account at the beginning of the year and can be reimbursed for co-pays, out of network visits and prescription drugs. Oh and my eye glasses.

Some years we don't go to the doctor enough to warrant medical insurance but I'm glad we had it when I had my miscarriage and DH had emergency gall bladder surgery. We hadn't planned on getting sick enough to need this kind of medical attention but there you go. It happened.

TN right now is about to cut off thousands of TNCare patients. that's thousands of people without access to health care. It would be great if all they were missing were unnecessay doctor visits. Unfortunately a patient without insulin will need more costly treatments as his diabetes progresses. Insulin now vs liver disease, amputations etc later is worth it in my mind.

On a side note - it burns me up that condoms are reimburable in some flex accounts, but tampons aren't.

[singerwife]

Oh boy, can I relate to this article. I hold a terminal degree in Literature, and my husband is a musician and massage therapist. Because I work for a small nonprofit and he is an independent contractor, we have no access to affordable healthcare.

We're professional, educated people who choose to work in the arts field, so therefore we cannot afford health insurance. It's ridiculous because we pay our bills on time, but after the basics...we have very little expendible cash. To buy health insurance for us (healthy and fairly young) it would be $1000 per month. It just doesn't compute.

When I worked for a larger nonprofit, healthcare/dental care wasn't an issue and I took it for granted big time. Now, we earn way too much to qualify for state assistance but not enough to purchase it independently.

I hate the idea of doing some crap corporate job just for benefits. I'm not sure where I fall in the moral hazard debate, but I wanted to chime in that this issue speaks to a larger cultural issue discussion....what areas does our culture value with perks (finance, etc) and what areas do we not (blue collar work, the arts).

[dionysia]

On a side note - it burns me up that condoms are reimburable in some flex accounts, but tampons aren't.Tampons aren't because they are considered a "toiletry, cosmetic, or sundry item." OTC contraceptive items are covered (e.g., condoms, contraceptive creams, pregnancy tests, ovulation predictor kits).

So I don't really see the issue. ;)

Di

[msnicolea]

What daydreamer said. ;)

I would like to be able to donate any unused benefits to persons without benefits. I think this would be a great way to redistribute wealth/services. For example, if I am entitled to 12 outpatient vits a year and I only use 4, the remaining 8 should go to low-income or indigent people. And I would be willing to pay higher prescription co-pays if that meant that persons who couldn't afford it would get assistance with their medications. It is frustrating to me that some of us with the best coverage are the ones who need it the least, in terms of financial status.

I am blessed to have amazing coverage--working at a state University will do that for you. But I have more than I need, that's for sure.

[Asha]

hmmm... i feel conflicted on the issue... so i will just present what my dh has experience and my opinions. i might get flamed, but so be it.

my dh is a retail pharmacist. he works in both low income neighborhoods and high income neighborhoods. he says that the low income neighborhood pharmacies are much busier and have many more prescriptions filled. he says 99% of the people have medicare or medicaid, and those programs virtually pay for all meds even over the counter meds. in his opinion, there are way too many prescriptions filled. one dr. in a low income clinic, just approves any request for medication without even examining the patient first. anytime they want a refill, he gives it to them. he says in the high income neighborhoods, the pharmacies are slow and the patients aren't overprescribed meds. some patients have insurance others do not and have to pay cash.

to me it would be an interesting study to see why this is so. is the moral hazard theory in play here where people who have access to free healthcare just overuse it or are there other things that come into play? perhaps, low income people might just have more health issues for whatever reason be it pollution, genetics, low education level, unhealthy living habits, less qualified or overworked dr's and healthcare professionals, lack of prevantive care...

[ellybelle]

My DH started his own business a year and a half ago, so would have to pay for his own insurance. For our family, it would probably cost over $14K a year. After having my daughter, I've taught more hours than I wanted to in order to continue to supply our health insurance. And I'm very lucky to even HAVE health inurance -- most part-time instructors at community colleges have no such insurance (while full-time instructors get full medical, dental and eye care). We're lucky, in that we will probably be able to pay for health insurance out of pocket in the future.

There really are a lot of working poor in this country w/o health insurance. They can't afford a HSA and their own insurance. Their employers can't afford (in many cases) to provide them with insurance. So I have to ask those who are against national (socialized) insurance -- what IS the solution in these cases?

[dionysia]

Rebjc,

Is it possible that there is more script filling in the lower income areas because that population's overall health is so poor.? I.e., people did not have insurance and therefore waited so long to seek medical attention for a health issue that preventative care is no longer appropriate and a script must be written? I fear I'm not explaining myself very well, but I hope someone gets my point. ;)

Di

[Tanya]

So I have to ask those who are against national (socialized) insurance -- what IS the solution in these cases?
A type of gov't prorated plan based on one's income that phases out at a certain level? A set number of doctor's visits for free a year?

[Asha]

di - no, i don't think that's it bc they are not the working poor. they are people on welfare who receive medicaid, so they have access to go to a dr. whenever they want for free. you make sense when you are talking about people who make too much money to qualify for medicaid, but are still really poor.

[BTB]

I am paying for the service, you better give me the service.

The above sentiment: "I'm paying for it, so I better get to use it" reflects a huge disjoint with how we regard medical insurance vs. other types of insurance. Insurance is not set up that way, including health insurance - whether it "should" be, is a different argument.

Take homeowner's insurance, for example. Let's say your home costs $100,000 (to make the math easy). You'll have little issues here and there, a baseball through a living room window, maybe. Most people expect to pay for those things themselves, otherwise their premiums will skyrocket and their insurance might be discontinued. We don't expect to get out in benefits what we pay in. We're paying for big protection against small risks; we'd rather pay out a little bit each month than risk going completely broke should fate have disasters in store.

Let's say we pay $1,000 per year in homeowner's insurance - again, to make the math easy. We could save that $1,000 instead and use it to pay for repairs ourselves, but we recognize there is a small risk of a disaster that would destroy our home and for which we could not pay ourselves. There's a small risk, for example, that we'll lose our entire home in a fire. We'd have to have saved our $1,000 in premiums for 100 years to replace our home with what we would've paid in premiums - and that's just the structure, not the belongings inside too. It would financially ruin the homeowner to have such a devastating fire, but we know that there will be some fires every year. We pay our $1,000 every year as protection against fire - if that fire hits our house, we get our $1,000 back, plus 99 other people's $1,000 for that year, to cover it. If we have no fire, we "lose" our $1,000 - but we did get something for paying it - protection in case we had had a fire.

In the case of health insurance, if you pay in $4,000/yr, and expect to get $4,000/yr in services, where is the "extra" money in the system to pay for the disasters which befall everyone else? Because that's what you're getting when you buy insurance - not payment for your own healthcare, you're joining a group that has all agreed to pay for each other's. Someone in that group will need a protracted ICU stay, or chemotherapy, or a kidney transplant, and it takes a lot of other people who all used less than they paid in, to make up the difference between the premiums the very sick paid and the cost of the services they required. You paid your insurance as risk-protection against being one of those very sick people; if you're healthy, the whole idea is that you'll pay in more than you use.

This line blurred when insurance companies realized they could cut overall costs by cutting the number and degree of illnesses among the very sick by paying for, and thus encouraging the use of, preventive services and medications. Now we look at health insurance as paying for everything, physicals, routine medications, screening tests, etc. as well as the catastrophic illness and injury. There's simply not enough money for everybody who's healthy to get back all they paid in, AND for the really sick to get back way more than they paid in. Just imagine how much car insurance would cost, if we expected it to cover every oil change, every tire rotation, every engine tune-up. But as soon as some people start using insurance this way, instead of as risk protection, premiums of that entire group skyrocket, and suddenly everyone must use it this way, because they've paid so much for premiums they have nothing left over to pay for "routine maintenance". And the snowball continues, of rising premiums and rising demand for that premium to cover everything.

As for the 'moral hazard' argument, well, this is the first I've heard that term, and I'm no stranger to health policy classes. I'm still trying to wrap my head around what exactly that was coined to mean - where's the morality, where's the hazard? But if the concept is that universal health insurance actually increases the demand for health services, well, Britain's experience with the implementation of the National Health Service speaks loud and clear. That's exactly what happened - 'they' thought a certain minimum health standard would be reached in the country. Grandma would get new bifocals, hypertensives would get their meds, etc, and then everybody would be happy, healthier, and insured against disaster.

The problem, though, was two-fold: first, that a new minimum standard seemed to arise in the mind of the populace (now that I've got my bifocals, I'm going to get new dentures too...) and second, that human behavior did not change. A lot of people don't do preventive things because there's not an immediate and/or noticeable benefit. Take a middle-aged man with out-of-control blood pressure who didn't have any symptoms from it, and put him on a med which protects him from long-term problems but gives him ED, and guess how long he'll take the med?

The main benefit I see to a single-payer system is what msnicolea alluded to: the ability to make tradeoffs. Currently, there is no way to translate cost savings in one arena to enhanced care in another. For example, a patient comes in demanding an MRI, when an xray (one-tenth the cost) or a CT (40% an MRI's cost) would do. The legal climate as well as competition for paying patients mean that many docs will acquiesce and order the more expensive test, that's a whole different thread. But even if the doc refused, the money that was saved isn't available to pay for someone else's kidney transplant who uses a different insurance carrier, and we still would have to have a healthy majority willing to pay for risk avoidance instead of services provided for that to work.

[bookworm]

I'd speculate that the difference rebjc's husband sees may be due to living conditions--access to nutritious food, # of people sharing the space, education about hygiene, etc. When people live on top of each other, germs are more likely to get passed around.

[Asha]

yes, those are possibilities other than the moral hazard theory.

though, i would say the working poor live in worse conditions than those on welfare, and they have no access to healthcare at all. it is very sad that people who work very hard have to suffer.

some students at my school have parents who do not believe in taking hand outs, so they won't go on welfare or get medicaid. some of them live with many families living in one small apartment compared to the people on welfare who have much more room bc it is one family per apartment.

it disturbs me how unfair the system is set up to be.

[keska]

I know when I had insurance through work I was more likely to go to the doctor for complaints than I am now that DH and I pay for an independent plan, so maybe there's something to be said for the moral hazard argument. If you think about it, there's a whole host of problems you can live with but if you are well covered by insurance, you'd be more inclined to go get something for (ex: toe nail fungus, warts, and, in my case, tension headaches).

However, I don't think health insurance coverage is as out of everyone's grasp as some people think it is. DH and I pay $225/month for individual coverage. I don't think that's too bad. We do have a $2500/year deductible ($100 for medications) but certain basic benefits are covered outside of that, including preventative things like yearly PAP smears. There's also a $5,000/year out of pocket limit.

[artist]

I don't know if I would compare it to home owner's insurance.

For one thing, utilizing preventitive care (ie: annual physical, etc.) ends up being more cost effective then never getting a checkup.

[BTB]

For one thing, utilizing preventitive care (ie: annual physical, etc.) ends up being more cost effective then never getting a checkup.

Totally true! Just as replacing your furnace filter is way more cost effective than replace your furnace. And getting oil changes is more cost effective than replacing your engine. But we don't expect those things to be covered by home/car insurance. Just wondering, why is healthcare different?

[singerwife]

However, I don't think health insurance coverage is as out of everyone's grasp as some people think it is. DH and I pay $225/month for individual coverage. I don't think that's too bad. We do have a $2500/year deductible ($100 for medications) but certain basic benefits are covered outside of that, including preventative things like yearly PAP smears. There's also a $5,000/year out of pocket limit.

Slightly off topic, but it depends upon the state. My state has the strictest patient rights legislation in the country, thus forcing any smaller insurance providers out of competition. Which leaves the two larger providers, who pass along the costs of compliance with the legislation to the consumer. Seriously, even with a $2500 dedustible and the most basic of all coverages, it's still $1,000 a month for our individual policies.

But I agree, I don't think your setup is cost-prohibitive or a bad deal at all.

[msnicolea]

duplicated post

[msnicolea]

Totally true! Just as replacing your furnace filter is way more cost effective than replace your furnace. And getting oil changes is more cost effective than replacing your engine. But we don't expect those things to be covered by home/car insurance. Just wondering, why is healthcare different?

Because an automobile is a luxury--your body and your health isn't. There's no comparison between fixing your home/car and potentially saving your life!

[artist]

Totally true! Just as replacing your furnace filter is way more cost effective than replace your furnace. And getting oil changes is more cost effective than replacing your engine. But we don't expect those things to be covered by home/car insurance. Just wondering, why is healthcare different?

Because it is a human being.

[bookworm]

Totally true! Just as replacing your furnace filter is way more cost effective than replace your furnace. And getting oil changes is more cost effective than replacing your engine. But we don't expect those things to be covered by home/car insurance. Just wondering, why is healthcare different?

Well, car insurance doesn't cover replacing your engine, either, so there is no incentive to the insurance company to keep your car running smoothly.

Car or home insurance is more like catastrophic coverage health insurance--it's a different model from the health insurance many/most(?) of us have.

[BTB]

Because an automobile is a luxury--your body and your health isn't. There's no comparison between fixing your home/car and potentially saving your life!

I think my comparison was misunderstood. I'm not saying the things insured are the same. I'm saying the current system of insurance was set up using the same risk group scenarios, and when we add all the 'maintenance' costs on top of all the things we were intending to insure against, premiums go up. It's not a value judgment, it's a financial statement on how the insurance plan works.

Because it is a human being.

Also not the point. :)

I'm not disagreeing that a car or home is different from a person. I'm saying the group payment scenario as a means of covering risk doesn't work unless there is a problem-free majority paying into the pool. Would it be better if you were allowed to get out what you paid in via premiums, but no more? Of course not, because that's not what insurance is for. But there's no surplus of volunteers to be among those that pay without getting the same dollar benefit in services, is there? That's how the current system was set up, and that's why the current system is crippled.

[artist]

So, are you suggesting health insurance be for accidents only? Like if I crack my head open on the sidewalk one day?

If so, what is the point of that?

[Carrie K]

But that is the basic premise of health insurance. It's to safeguard YOUR WALLET against catastrophic illnesses and the bills that come with it. It's not pay as you go. To simplify it, the health insurance companies are hoping that you don't need their services, and you are saying you think you might, if you buy health insurance. It goes into a pool that everyone in that particular health care coverage uses.

The problem is that what used to be out of pocket expenses for basic healthcare have gotten so expensive. Dental insurance is (at least at the last health care place I worked at that offered it) was the cost of two cleanings a year and X-rays. That's all I usually use, so I didn't buy it. If I crack a tooth or need a crown? Out of my pocket too.

The other part of this equation is that there simply was not this level of helpful medical intervention before the last few decades. We've basically "thought/discovered" ourselves into this. Wait until all the gene therapy is available. Not affordable, mind you, but available. In a way, it's A Brave New World.

(Some states and county hospitals have great packages for the uninsured. Some have lousy ones. California is awesome. From what I hear, PA is not so great for the working poor).

I personally don't think national health care will solve the problem - I think that will just translate into crappy coverage for everyone, but neither do I think the current system is all that great especially since the current system is kazillions of tiny systems.

[BTB]

Car or home insurance is more like catastrophic coverage health insurance--it's a different model from the health insurance many/most(?) of us have.

The point is that the current insurance model was developed to provide catastrophic coverage, and tinkered with slowly to provide screening services, instead of having been developed as a prevention model in the first place. I think the data speaks for itself that it simply isn't working!

So, are you suggesting health insurance be for accidents only? Like if I crack my head open on the sidewalk one day?

If so, what is the point of that?

No, I'm saying that's what it was intended to do. See how foreign this idea is? It was not that way a generation ago. Insurance is for catastrophes. You get home insurance in case there's a fire, not in case you break a window. You get car insurance in case there's a crash, not in case you need an oil change. Somewhere along the line (when insurers decided they could up profits by covering preventive services) our understanding of health insurance changed; we demand much more of it than catastrophic coverage, but it's still set up on a risk-group model. And the more premiums go up as a result of demand for more covered services, the more people will rely on their premiums to provide coverage for every single healthcare need, even foreseeable, "maintenance" needs, which in turn drives up premiums further....

if I knew the way out of this mess, I guarantee I wouldn't be posting it here, but on national tv. :) Just makin' the point that we can either change our expectations of what we get, or change our expectations of what we pay, but we can't expect to get out every dime we put in unless we personally would want to be able to access ONLY that much. That's not a tradeoff I'd want. A healthy majority getting less than what they pay for is essential to the insurance model we have, or there is no money left in the pot to pay for the needs of those who did have catastrophes. I'm perfectly willing to pay my premiums and not get back that much in benefits, because what I'm paying for is protection in case I do have a catastrophe. It's cost-containment for the consumer: I can pay x amount to protect against paying a million, or pay zero in premiums but take the risk that roulette wheel for a million bucks ends up pointing at me. Insurance is about balancing risk across a group, not providing every health need (or home need, or car need). Yes, it's health at stake, not homes or cars. But I'm talking about the risk model used as the base, not the value of the insured.

[BTB]

If so, what is the point of that?

The point would be to avoid the risk of being financially ruined by a health catastrophe for a small amount you plan ahead to be out.

The problem is, it no longer works that way due to the snowball effect - premiums are no longer small. It would make much more sense if premiums were what they would be if that were still the way insurance was expected to work.

The expectations have changed, but the system has not, caused today's "health-care crisis."

[Delta]

BTB, you really put things into perspective for me. Thank you. I think I get it now.

(My dad is self-employed and has catastrophic coverage for himself and my mom, incidentally. They have a really high deductible with low premiums.)

[thedoorchick]

No, I'm saying that's what it was intended to do. See how foreign this idea is? It was not that way a generation ago. Insurance is for catastrophes. You get home insurance in case there's a fire, not in case you break a window. You get car insurance in case there's a crash, not in case you need an oil change. Somewhere along the line (when insurers decided they could up profits by covering preventive services) our understanding of health insurance changed; we demand much more of it than catastrophic coverage, but it's still set up on a risk-group model. And the more premiums go up as a result of demand for more covered services, the more people will rely on their premiums to provide coverage for every single healthcare need, even foreseeable, "maintenance" needs, which in turn drives up premiums further....

I agree with all of this. That's been my point about insurance in general for a number of years now. I have had to fight my insurance agent because he wants to sell me homeowners/rental coverage that I don't want. If the house burns down, I want it replaced. If a window breaks, thanks but I'll shell out the $100 to fix it myself.

By the same token I really consider health insurance of catastrophic coverage to be the real need for everyone. I worked in my dad's business office through my high school and college years (he's a family practitioner), and when I worked there, most everyone paid out of pocket for their office visits, labs and shots. Now things are quite different.

[wendalah]

If I didn't have coverage through my work--the most I'd pay out of pocket for would be catastrophic coverage. There's no way I'd shell out for anything else. I don't go to the doctor enough to make it worth my while.

[lawyerlee]

This has been an interesting discussion. I don't have much to add right now, but I'm enjoying reading all the different thoughts.

[artist]

Maybe I wouldn't be so opposed to paying out of pocket if doctors didn't make so much money. Or if insurance companies didn't take all my money.

[Sarah]

I'm confused, Artist. Or if insurance companies didn't take all my money.

If you paid out of pocket for Dr visits, the insurance companies wouldn't make money off of your visit.

I think purely catastrophic coverage is a great idea for most people. Given how high the premiums are for comprehensive care, most of us would save money if we just put that money towards a savings account and paid OOP for Dr visits. I know I would.

[Tanya]

Maybe I wouldn't be so opposed to paying out of pocket if doctors didn't make so much money. Or if insurance companies didn't take all my money.
I am not a doctor nor am I married or related to one (at least in this country). But I think what you don't realize is the reason we have such good health care in this country (for those that can pay for it, admittedly) is because doctors are paid well. It's a hell of a lot of work to go through to not see the light at the end of the tunnel. And don't forget the astronomical malpractice insurance most have to carry. And the equipment they have to buy...etc. etc.

And insurance companies are in the business of making money. Period. They are not out to help us folks when times get tough, they are for-profit. They base their premiums on that fact. So if you don't want to pay so much for your insurance, look into getting catastrophic coverage. Like others have said, that is originally what it was for, and I think if we went back to that concept, it would solve a lot of problems. Not without a lot of bitching and moaning, though;).

I personally don't think national health care will solve the problem - I think that will just translate into crappy coverage for everyone, but neither do I think the current system is all that great especially since the current system is kazillions of tiny systems.
Exactly.

[BTB]

Maybe I wouldn't be so opposed to paying out of pocket if doctors didn't make so much money. Or if insurance companies didn't take all my money.

But we all do pay out-of-pocket. Some of us just call it "premiums". They'd be a lot less if we all used insurance as, literally, insurance - protection against the unforeseen, not as a means to pay for predictable, expected expenses.

As for what doctors make - at a different point in my career I'm sure I'll be more comfortable, but right now I'm staring down $270,000 in medical school loans that are accruing interest while I look forward to earning $38,000 each of the next four years while working 80 hours a week. Few doctors end up sending their kids to bed hungry, but no one goes into medicine to get rich. Those that do, drop out early. It's far too much sacrifice to be in it for the money.

[Asha]

i have never heard of cautostrophic health insurance. what is that? what does it cover? does anyone have a link that could help me out? i have posted on many different threads about the horrible situation my in-laws are in bc of their lack of health insurance, so i won't go into it again. this might be a viable option for them bc a hospital stay/accident would financially devestate our family.

i think it is overly optimistic to say that dr's or any profession only choose their career path because they love it. i think money plays a role into people's career choices. i think this would make an interesting study. perhaps, it has already been done. i have always believed that this is one of the reasons why there is a shortage of qualified teachers.

[keska]

Reb

When I think of catastrophic health insurance, it's just a regular policy where the deductible is higher than average. Therefore, the covered individual would be paying out of pocket for all normal medical expenses up to the deductible amount. When you buy individualized insurance, you can pick all sorts of deductible numbers ($5,000/$10,000/etc) and covered benefits. You can also choose how much of the expense the insurance company is going to cover (80%/100%/etc). If you pick a high deductible and lower percentage of coverage, the cost of the insurance is lower because it is expected you will probably not need enough medical care in one year to go over the deductible amount. In such a case, you'd only go over the high deductible if you truly had a catastrophic health problem and then your insurance would kick in and cover you.

DH and I have a 5K deductible with something like 80% coverage. We chose that because we figured we could afford to pay out of pocket up to 5K if we had to before it would really start hurting and because it truly got more expensive to have a lower deductible. Luckily, our plan offers some basic benefits that the insurance pays for outside the deductible too, like yearly gyno exams, etc.

[BTB]

i think it is overly optimistic to say that dr's or any profession only choose their career path because they love it.

I'd agree that'd be optimistic, but that's far broader than what I actually said. I said no one goes into medicine to get rich, and those that do leave, not that everyone who chooses medicine does so *only* because they *love* it. There are plenty of other fields that will make you rich faster and with less committment, and most people smart enough to complete medical school are smart enough to make it in a different career as well. And, incidentally, medicine for the average doc really doesn't pay as well as people tend to think.

Luckily, our plan offers some basic benefits that the insurance pays for outside the deductible too, like yearly gyno exams, etc.

I wouldn't consider that "catastrophic coverage". Typically catastrophic plans pay for all inpatient care and for outpatient surgeries - sometimes quite well, even at 100% - but carve out anything "routine" - annual physicals, screening tests, etc. They usually cover emergency services too, regardless of whether you are discharged or admitted after treatment.

[LittleFredPunkinHead]

I've said this before, in similar discussions, but I think what we really need is a national health insurance. Everybody with a basic level, and then if people chose to do so, they could supplement it with private or employer-provided policies.

[fuzzy]

Somewhat OT, but what the hell...

i think it is overly optimistic to say that dr's or any profession only choose their career path because they love it. i think money plays a role into people's career choices.

I'ev gotta agree with BTB on this. Perhaps not *all* MDs get into medicine because of some inherent altruisitc drive or an inherent love of medicine. But, very few are really, really rich.

If anything, it's more about egos than money. Most of these people are used to being super smart -- the top of their class. There's not a lot of money in medicine, but there's still a lot of social respect that comes with the title of MD.

My best friend is an MD, is living in a studio apartment, can not afford a car, and scrambles to make ends meet. Mostly because she owes an exorbitant amount of money. I only got my master's and I am far more comfortable than her. In fact, my husband (a PA) makes more than she does. My husband's last supervising MD made about $50,000 a month. I was astounded. And then she told me she had to pay $45,000 a month in overhead. Sure, $5k a month ain't bad, but when you have a $3k a month student loan bill staring you in the face, its not so great either.

[amorey]

There’s a reason why health insurance doesn’t follow the catastrophic model like car insurance or home insurance, but rather a preventive managed care model. If you pay for people to go to the doctor for routine exams or if they might be sick, that could cost the insurance company $200. But if they don’t pay for that and the person doesn’t go to the doctor because they don’t want to or can’t afford to pay for it out of pocket, then something catastrophic might happen, and it could cost the insurance company tens of thousands of dollars. The concept was that by paying for preventive care, the insurance company would save money in the long run.

There are many people out there with chronic conditions that couldn’t afford their “routine” medical care without a comprehensive health care plan. Especially since most catastrophic plans don’t cover pre-existing conditions. What would we tell those people? That they should sell their homes and sacrifice their dreams to pay for their medical care?

[BTB]

There’s a reason why health insurance doesn’t follow the catastrophic model like car insurance or home insurance, but rather a preventive managed care model.

We went around and around on this a page or two back - actually, health insurance *used* to work this way - just like home or car insurance. Then insurance companies got the bright idea to encourage preventive care, not because they're so nice and wonderful and care about their insureds so much, but because they thought it would save them money. But it isn't nearly so cost effective as it was supposed to be, because it didn't change human nature. People in general do not like doing preventive things. It would be very "easy" to improve national health simply by improving diet and exercise, but obesity is an epidemic because it's hard to change habits. The cost savings preventive care promised have not been realized - if they had, premiums would be going down, not up.


There are many people out there with chronic conditions that couldn’t afford their “routine” medical care without a comprehensive health care plan.

True, but there are lots of people out there with acute and chronic conditions who can't afford health insurance at all because premiums are what they are. In the original model, a high disease burden with low acuity was still considered a 'catastrophe'. In the risk group model, you were still the one who's home burned down so to speak.

Especially since most catastrophic plans don’t cover pre-existing conditions.

Pre-existing condition coverage is among the least understood of insurance concepts. HIPAA, which most people view as the "privacy" law, actually has just as much to do with insurance portability, and provides for continuation of coverage. If you've not been previously covered, comprehensive vs. catastrophic won't help you in that scenario anyway.

[BTB]

If anything, it's more about egos than money.

Touche. :) Personally, I've always thought ego gratification is reflected more in specialty selection than by choosing medicine in the first place. Mostly because I can't fathom why someone would choose, for example, cardiothoracic surgery, with the lifestyle they lead (or lack thereof) outside the office. Compare that to a family practitioner, who has to stay abreast of so many areas of medicine yet makes very little (there's such salary disparity among the specialties) and gets little love from both within the medical field and without. Not the same cachet as "Hi, I'm a heart surgeon." There are surgeons, though, who think "a day without the OR is like a day without sunshine". Some people really do find what they love, and I say, lucky them! But now I'm really OT..... :D

[amorey]

<goes back and reads entire thread> :o

It would be very "easy" to improve national health simply by improving diet and exercise, but obesity is an epidemic because it's hard to change habits. The cost savings preventive care promised have not been realized - if they had, premiums would be going down, not up.

While people do engage in unhealthy behaviors, I disagree with the premise that our healthcare coverage is expensive just because of that. I would love to see a pie chart of where each penny of every health care dollar was spent. There was an article in Time magazine about the pharmaceutical industry, which is the most profitable in the nation. Only 10% of the drugs cost went back to R&D. Something like 60% went to marketing. There’s something wrong with that.

True, but there are lots of people out there with acute and chronic conditions who can't afford health insurance at all because premiums are what they are.

Or they flat out can’t get coverage. My DH has an immune disorder, which among other things, causes rheumatoid arthritis and a bleeding disorder. A few years a go he had a job that didn’t offer health care until you’d been there a year, so we bought him short-term coverage. They ended up not covering anything for DH because they could link whatever was wrong with him back to the immune disorder, which was a pre-existing condition. He had been insured before that. I recently took a job that doesn’t offer health insurance, so we looked into buying our own. The insurance companies won’t sell us coverage because of DH’s disorder.

DH is a student, but the insurance offered by his school is “catastrophic” and doesn’t cover pre-existing conditions, so it would pretty much be worthless to us.

I don’t know much about the old insurance system, but the current trend toward high-deductible insurance isn’t good for families like mine. We looked into it, and a plan for the two of us with a $10k deductible would be $100 a month if we could even get it. There’s no way we could afford a $10k deductible ever year.

[Darlene&Scott]

Excellent points BTB! :D

I guess I'm in the minority - I am the sort that abuses preventative measures with my medical insurance - but I think that's my FH's fault. He's in medical school right now and has a habit of thinking the slightest health problem will cause big issues when it's really nothing. I can't tell you how many times I went to get things checked out because he scared the crap out of me with the 'what if's' LOL. But I do preventative things with everything - cleaning, car mait, the vet, ect. I've seen too many things in my life go to crap because I didn't take care of a problem when it was in the baby stages. School of hard knocks I suppose.

Plus, my family on both sides have bad teeth so I pay out of pocket for check ups at the dentist since I've only had coverage when I was a minor and I'm 26.

[BTB]

While people do engage in unhealthy behaviors, I disagree with the premise that our healthcare coverage is expensive just because of that.

Oops, I must've been very unclear, as that's not what I meant. I'm not saying premiums are high because people engage in unhealthy behaviors, that would be kind of like saying health insurance is expensive because people are unhealthy. :p I'm trying to say that healthcare coverage is expensive because it's been made more and more comprehensive, with the idea that this would reduce cost savings, but that this hasn't played out for the same reason that people do engage in unhealthy behaviors - the fun of eating a burger today is more immediate and more satisfying than the threat of coronary artery disease tomorrow is scary. The two are in parallel, not cause/effect. Of course we all know exceptions, but statistically, most people with hypertension don't follow low-salt diets, most people with Type 2 diabetes don't lose weight, most people with intermittent claudication don't undertake exercise programs. All those things would lower premium cost in a comprehensive plan. It's the same underlying cause - change that comes at a cost or has side effects is less likely when it's benefits are not as visible as it's costs.

[fuzzy]

Touche.

Hee-hee, didn't mean anything by making that comment. Honest. I do think most MDs have good intentions. Just that there are some out there that don't, but I don't think their not-so-great intention is $$.

[eponymous]

True, but there are lots of people out there with acute and chronic conditions who can't afford health insurance at all because premiums are what they are. In the original model, a high disease burden with low acuity was still considered a 'catastrophe'. In the risk group model, you were still the one who's home burned down so to speak.

Yes, except that it's more like your chair is on fire all the time. :)

[msnicolea]

I've said this before, in similar discussions, but I think what we really need is a national health insurance. Everybody with a basic level, and then if people chose to do so, they could supplement it with private or employer-provided policies.

ITA.

[Carrie K]

I'm curious, how would you guys set up a National health insurance/coverage plan? I mean, things like, how would it work? What would be covered? What would be "extra"? How would the whole shebang be paid for? By payroll taxes like Social Security and Medicare? Or should it be kind of like income tax where you pay it on a sliding scale on an annual basis? Should everybody in the US be entitled to it, whether or not they were working, or here legally?

Im thinking that maybe if we had an idea of what we actually wanted, instead of just a sort of nebulous 'better', we would be in a better position to push to make it happen.

[LittleFredPunkinHead]

I'm curious, how would you guys set up a National health insurance/coverage plan? I mean, things like, how would it work? What would be covered? What would be "extra"? How would the whole shebang be paid for? By payroll taxes like Social Security and Medicare? Or should it be kind of like income tax where you pay it on a sliding scale on an annual basis? Should everybody in the US be entitled to it, whether or not they were working, or here legally?

Im thinking that maybe if we had an idea of what we actually wanted, instead of just a sort of nebulous 'better', we would be in a better position to push to make it happen.
I'd envision a catastrophic coverage, provided for by a payroll tax.

[msnicolea]

I envision something like Kucinich's plan:

How would we pay for it?

Funding for my health plan will come primarily from existing government health care spending (more than $1 trillion) and a phased-in tax on employers of 7.7% (almost $1 trillion). Employers who provide coverage are already paying 8.5%, on average. That would raise about $920 billion. In addition to that, there's already over a trillion dollars being spent a year in local, state and federal dollars for health care. The American people are already paying for universal health care; they're just not getting it.

It is time to take the profit out of health care coverage, time to provide for the American people, not for the insurance companies.

The type of system I am proposing -- privately delivered health care, publicly financed -- has worked well in other countries, none of which spend as much per capita on health care as the United States. The cost-effectiveness of a single-payer system has been affirmed in many studies, including those conducted by the Congressional Budget Office and the General Accounting Office. The GAO has said: "If the US were to shift to a system of universal coverage and a single payer, as in Canada, the savings in administrative costs (10% to private insurers) would be more than enough to offset the expense of universal coverage."

Over the years, groups and individuals as diverse as Consumers Union, labor unions, the CEO of General Motors, the editorial boards of the Atlanta Journal-Constitution and St. Louis Post Dispatch, and Physicians for a National Health Program have endorsed a single-payer approach. In the "Physicians Proposal for National Health Care," 7,782 physicians agreed that "proposals that would retain the roles of private insurers -- such as calls for tax-credits, Medicaid/CHIP expansions, and pushing more seniors into private HMOs -- are prescriptions for failure."

It is sound economics -- what actuaries call "Spreading the Risk" -- to extend Medicare to younger and healthier sectors of our population, thereby putting everyone in one insurance pool. It permanently saves and improves Medicare, while eliminating duplicative private and government bureaucracies.

While enhanced Medicare for All makes economic sense, it has not made political sense to some, due to the power of the private insurance lobby. My streamlined plan is very different from the 1993 Clinton HMO-based plan, a complex proposal that left big insurance firms in a central role. After President Clinton's "Managed Competition" plan failed without coming up for a vote, talk-radio host Jim Hightower asked President Clinton why he hadn't put forward a "simple, straightforward" single-payer plan, "instead of all this bureaucracy." Clinton replied, "I thought it would be easier to pass" a bill that left the insurance industry in place. "I guess I was wrong about that."

More here: http://www.kucinich.us/issues/universalhealth.php

[artist]

Kucinich was great!

[msnicolea]

Kucinich was great!

He still is! ;)

[BTB]

It is sound economics -- what actuaries call "Spreading the Risk" -- to extend Medicare to younger and healthier sectors of our population, thereby putting everyone in one insurance pool.

i.e. getting more healthy people's money into the pot to pay for the care of the sick, right? So that brings us full circle: would healthy people expect every dime rationed them, or would they be content to leave some of "their" healthcare dollars unused so that they remain available for others?

[amorey]

would healthy people expect every dime rationed them, or would they be content to leave some of "their" healthcare dollars unused so that they remain available for others?

I don't think people get much a choice, really. If we're not systematically spreading the risk around, then people who need more healthcare than they can afford will go bankrupt or their bills will go to collections. Someone has to pick up the tab for those bills, and it ends up being the rest of us in the form of higher costs for the services we do use. With a universal system, we share the costs without ruining anyone’s credit score, or life.

[Carrie K]

..funding....come primarily from existing government health care spending (more than $1 trillion) and a phased-in tax on employers of 7.7% (almost $1 trillion). Employers who provide coverage are already paying 8.5%, on average. That would raise about $920 billion. In addition to that, there's already over a trillion dollars being spent a year in local, state and federal dollars for health care. The American people are already paying for universal health care; they're just not getting it.

Okay, just so I can check to see if I'm on the same page as Mr. Kucinich - who I did not appreciate when he was running, but who had a lot more on the ball than anyone else did - darn my shallow perceptions...

- existing government health care spending (more than $1 trillion)
So then is this figure what is currently funding Medicare and Social Security and health care for government workers? Or something else? And does this mean that we get rid of SS after all?

- phased-in tax on employers of 7.7%

If it replaced SS and Medicare, this would be easier to implement. Otherwise:

All employers, regardless of size? Is this based on the business income, number of employees or is it a Doing Business Tax? Well, that can't be, because it would have to be 7.7% of something. ;) (California has an annual corporation tax of $800 just for the sheer joy of doing business in CA.) 7.7% can be a big bite for small business owners who are already paying worker's comp and UT. I know that corporations can handle it, and they ought to, but this can just put the tiny Mom & Pop businesses into closing up shop and sending everyone there to go work for the Soulless Corps.

On the other hand, I'd to hate to see it split it between employee/employer unless employee makes a certain amount of money, because 3.85% is a big chunk out of a minimum wage salary.

- there's already over a trillion dollars being spent a year in local, state and federal dollars for health care.

So would this take over all the existing programs? I know that our local County hospital offers a Basic Care plan that's not bad. Would hospitals then fall under Government Entities? Instead of being privately run? There's some law on the books stating somthing like they have to take anyone who clearly desperately needs care - but not that they can't bill them later. They just can't determine that there is no way that person could pay and then send him down the road.


The costs are already spread to all of us one way or another whether it's in increased premiums or higher costs at the register. Hospitals, doctors, clinics, etc all have to pay their bills too. The rest of us get to pay more money to cover X when they figure out they're losing # dollars on X every month and raise prices on X (or Y or Z) to compensate.

[BTB]

With a universal system, we share the costs without ruining anyone’s credit score, or life.

Current risk-group models of private insurers are supposed to work this way too, but they don't either. The sentiment was expressed - I think on page 1? early on, at any rate - that hey, I'm paying for the service, so you bet I'm going to use it. That's what got us into the whole "what insurance is really meant for" vein. There are people now, under the current system, who wish to 'get what they pay for.' For a universal system to work, this would still have to change, because we'd still be dependent on a healthy majority willing to get much less than what they paid for. The only thing that changes is where the money came from - taxes, or premiums.

[colz85]

Enjoying this thread...agree with much of what you are saying, BTB.

Here's something I wonder....If insurance hadn't become so comprehensive, would medical costs be lower? If it wasn't EXPECTED that "insurance will cover that", would costs be more in line with what people could reasonably be expected to pay out of pocket?

Personally, when I had the option, I took a catastrophic plan. I had to pay for my own check ups, but if my appendix ruptured, I'd be covered. I was really ok with that....I don't think it is unreasonable to expect people to pay for some of their own medical expenses, like check ups, etc.

I know this puts me in the minority. :)

Colleen

[amorey]

BTB, I read the whole thread, and I totally get what you're saying. :) I’m probably not posting in complete thoughts.

I do think that the shared risk model works, and that the fatal flaw in our current system is it’s for-profit, and highly profitable at that. In a free market, products and services cost what the market will bare. Because healthcare is an inelastic cost, the market can bare a lot. It’s not like other things, where you can say, “Well, beef is expensive this week so I’ll buy pork.” I would be willing to bet that if we took the same amount of money that citizens and companies are currently paying for healthcare and put it into a system where no one was making a profit on it, our healthcare dollars would go much further.

The concept of high-deductible plans and the “only pay for what you use” idea won’t work. This is something that I’m a little crabby about right now because I’ve had way too much exposure to it recently. At the job I just left, I was working on a Heath Savings Account project with a large national bank. The theory behind HSAs is that you buy an inexpensive catastrophic plan, and put the money you would have paid for premiums into a tax-free savings account. Then, you go to the doctor twice a year and you get all the extra money! You can keep saving the money and use it for your retirement.

While this is great if you only go to the doctor a few times a year, it’s not so great for people who are less healthy. As healthy people move to HSAs with catastrophic coverage, only the more sick people will be left in the comprehensive coverage pool, and their costs will skyrocket. If the trend continues, it would get to the point where it wouldn’t be worth it even for sick people to stay in the comprehensive plans, so then they’d be stuck paying all their own medical bills, too, or at least the amount required to meet their deductible. And a $10k deductible is a hell of a lot of money if you’re only making $42k a year, which is the average income for this country.

These people simply wouldn’t be able to pay their medical bills, which brings me back to my point that I made earlier. You can’t get away from sharing the costs, because you will be paying more for the services you do receive to make up for the defaulted medical bills. My aunt has worked in the healthcare industry for years, and told me that 60% of medical bills don’t get paid. If that’s true, you’re already paying for more than twice the care you used, if you’re paying for your care.

ETA: More clarification- I guess the crux of my augment is that it’s the for-profit factor that makes healthcare so expensive, and not the fact that people don’t have healthy enough lifestyles or are trying to go to the doctor and use lots of healthcare to get their money's that’s making it expensive.

[Carrie K]

And the for profit goes to who exactly? The CEO's? The shareholders? I wish there was some way of tying the highest paid/highly compensated employee/owner/whatever to the lowest paid/compensated employee made. As in, could not make more than X percent than the other. I'm all for capitalism, I'm just not so much for the feudal/serf system of the Middle Ages.

There are a lot more drugs on the market that target specific diseases nowadays too and they're looking for more. R&D costs money. It's a little cavey what drugs they promote and why but it's not free.

[eponymous]

There are people now, under the current system, who wish to 'get what they pay for.' For a universal system to work, this would still have to change, because we'd still be dependent on a healthy majority willing to get much less than what they paid for. The only thing that changes is where the money came from - taxes, or premiums.

I think that people have less of a "get what I pay for" attitude about money paid towards taxes - they're used to not being able to measure how much dollar-to-dollar benefit they get from police service or highway repair. I suspect that a tax-based system would be very different psychologically than a premium-based system.

(My advisor calls herself a "psychosocial epidemiologist" and part of the research that I've done with her is focused on the psychological reasons that people do and do not partake in health care, mostly without private insurance but with Medicare/caid.)

[LittleFredPunkinHead]

I think that people have less of a "get what I pay for" attitude about money paid towards taxes - they're used to not being able to measure how much dollar-to-dollar benefit they get from police service or highway repair. I suspect that a tax-based system would be very different psychologically than a premium-based system.
I absolutely agree with this.
And with Amorey:
I do think that the shared risk model works, and that the fatal flaw in our current system is it’s for-profit, and highly profitable at that. In a free market, products and services cost what the market will bare. Because healthcare is an inelastic cost, the market can bare a lot. It’s not like other things, where you can say, “Well, beef is expensive this week so I’ll buy pork.” I would be willing to bet that if we took the same amount of money that citizens and companies are currently paying for healthcare and put it into a system where no one was making a profit on it, our healthcare dollars would go much further.
Although I think I'd prefer to see a system where catastrophic coverage was national, and supplemental coverage was private. It'd be much easier to manage, and then there's not so much possibility for abuse of the system by people who want to "get back what they paid in."

[Asha]

how can it be justified that our gov't offers healthcare to people who don't have jobs yet hardworking law abiding citizens can't get healthcare?

what is worse is that the system is set up in this evil cycle to encourage people to be lazy. if you earn too much money, you don't qualify for healthcare, have to pay full price for an apartment, don't get help with purchasing food. there are people who make the choice not to work bc they know they could have a much better quality of life by being on welfare and medicaid.

worse yet this sets a horrible example for our children. children who grow up in those homes don't learn how to be hard workers. they see their parents sitting at home and doing nothing yet they still have all the basic needs. i have students who have said to me that they don't need to learn how to read bc they don't need to have a job when they grow up. it doesn't take a genius to figure out where they learned that one. most likely and sadly many of these children will grow up to be just like their parents dependent on the government.


i know this is a much bigger issue than the original topic, but i am sure there are ways that our gov't could afford a national healtcare plan. our society needs to be set up in such a way the encourages its citizens to be productive and law abiding. so much money would be saved if more people weren't dependent on the gov't and our astronimically high number of prison inmates were reduced. our current way of life is demoralizing to so many people, and i think it is an embarrassment that we turn our backs on so many people who need heathcare coverage.

[colz85]

how can it be justified that our gov't offers healthcare to people who don't have jobs yet hardworking law abiding citizens can't get healthcare

This is the problem I have with our current system as well. I mean, I think in a nation such as ours, we should all have some basic healcare available to us. But I think it's reprehensible that my friend who works 45 hours a week at a local small business doesn't have health insurance because it's too expensive for her employer to provide it (and too expensive to purchase on her own), when it IS provided for those who don't work.

I don't know the answer. Just adding my opinion.