I have criticized Obamacare on Constitutional, moral, and economic grounds. However, I am often asked about the alternatives. I’ll discuss 4 options here, although the possibilities are endless:
1.Single payer. Everyone pays more in taxes and the federal government provides every American with insurance. Personal control over health care decisions would erode under such a system and rationing would be necessary to contain costs. Support for a single payer plan is not strong, so we’ve move to the next option.
2. Do nothing. Problems aside, the current system isn’t “broken” as the left often depicts. Most Americans have insurance and most who do not either choose not to or are eligible for federal assistance. Non-payers are a problem and the rest of us must pick up the tab to some extent. Most of us have a number of treatment and physician choices, and the U.S. still provides the best treatment in the world. While most Americans want to do something about the current system, a lack of agreement can result in retention of the status quo. This is not the worst alternative.
3. Market-oriented reforms. For example, consumers can be permitted to purchase health insurance across state lines would make the market more competitive. Health care savings accounts allow us to set aside money from each paycheck tax-free and draw from the account when we need it. Giving everyone a tax break for health insurance premiums–not just those to go through their employers–can encourage consumers to buy their own policies when their company-sponsored plans don’t meet their needs. Proposals such as these improve the current system but they don’t address the core problem of overinsurance (see #4). Besides, the left always opposes such proposals because they still require Americans to pay for their own health care.
4. End all deductions for health insurance premiums. This might sounds odd, but overinsurance is one of the biggest problems we face in health care. When health insurance pays your bills, physicians respond more to insurance companies than the patients. Besides, we don’t really care what a procedure really costs or if it is necessary as long as “insurance pays for it.” As a result, the system is overused and consumers don’t demand the service and value they otherwise would if had to pay the entire bill. I’m not saying that health insurance is a bad idea, but it should be purchased to cover major expenses only.
Think about it this way. What if your employer provided car repair insurance that capped the amount you paid for auto maintenance to $50 per visit to the mechanic. We would no longer care how much the repair shop actually charged and we’d insist that they complete all sorts of “preventive maintenance” while the car’s in the shop. Who cares long as someone else is paying?
If average Americans received increased wages instead of health insurance and paid for doctor visits out-of-pocket, providers would become more competitive and value-oriented. Of course, this proposal suffers from the same problem as #3; the left won’t support it because it doesn’t require the “rich” to pay the health care bills of the “poor.”
There is an irony here. The left tells us that a lack of universal catastrophic insurance is the problem, but they offer us comprehensive insurance covering everything from routine visits to the doctor to viagra as the solution. If catastrophic insurance is really the problem, then why not implement option #4 and provide a universal health care benefit for standard treatment in excess of $10,000 per year to all Americans? This could be financed by a small payroll tax. Problem solved…
I’m not really in complete support of this proposal, but I think it has some merit and I want to call the left’s bluff. If this issue is really about protecting average Americans from financial ruin because of a medical catastrophe as they say–and not about wealth redistribution as I believe–then they should line up in favor of such a proposal. I doubt I’ll get many takers.
Doc, I couldn’t believe you were proposing this until I read it twice and realized that you have reservations. I’m a moderate, maybe a little to the left. I read the blog a lot but never posted before. I’m not going to be the first taker for this idea because it doesn’t solve the big problem, cost. Working Americans can’t afford healthcare anymore. They can help pay, but the wealthy have to pay their fair share to make it work. You call it redistributing the wealth, I call it fairness.
You nailed it as usual. When I joined the workforce in the 60’s, there was no health insurance. It was called hospitalization, because that’s all it paid for. Doctors visits, prescriptions and even pregnancies weren’t covered. Premiums weren’t a burden. Then along came Medicare, Medicaid, Government Employees insurance, labor unions, insurance companies and plaintiff lawyers and it spiraled out of control. Everybody wanted more. The patients became pawns in a billing game with the government or the insurance companies getting the bills. The costs got so high that Uncle Sam decided to step in and save the day. Yeah, right.
Your solutions won’t work because they make too much sense. We can’t roll back the clock. Too many livelihoods and careers depend on the continuation of this broken system. The irony is that the price tag is so high and the government is so broke that we might be able to put if off and let the market decide the outcome. I think that’s all we can hope for. Maybe go for insurance across state lines and tort reform if we get a new administration.
Great ideas. #3 and 4 would lower the cost of insurance, making it more affordable for many presently not able to affford coverage or opting out. Problem solved. Before we go to more big government solutions, we shoud try these approaches. Keep the safety nets of Medicaid and SCHIP in place and then gradually raise the qualification standards. If we are patient, this could be done fairly painlessly.
Chip. Re fairness and the tax code. The only proposal out there for fairness is Obama’s Buffett Rule, about $5 billion per year. Forgetting for a moment that it cannot pass, he has already promised to use it to reduce the deficit, provide green jobs and stimulate the economy. No mention of health care. To achieve that, he was going to milk Medicare for $500 billion and mandate young people who don’t have insurance and don’t want it. But the Supremes got in the way.
To be sure, we need a revision of the tax code. Our tax base is shot and we need to admit it. Fairness cuts both ways. When 50% of filers don’t pay income tax, it will never raise the needed revenues. Revision will not happen under Obama. He ignored Simpson – Bowles, won’t talk about entitlements and won’t produce a budget. Listen carefully to him. He is a one note Johnny: divide, demagogue and deflect. And he gets away with it.
Paying out of pocket is a good alternative only for young healthy men. It is not good for women who need more routine check- up visits than men, not to mention the expensive pregnancy check-ups. The same applies to parents with babies and young children who tend to see a doctor quite often at this age. If I pay now $30 per visit for a primary care physician and $80 for a specialist, I’ll pay $100 and $266 (respectively) per visit without insurance. (The insurance plan is 30%/%70). If my daughter has fever or she is coughing I need to take her to see a doctor and I will not think twice. Another group that will be harmed by this alternative is the senior people. So, since the majority of the population is affected by this alternative, we are left with alternative #1. Federal government insurance plan can let us choose our health care provider from the different providers it works with, so we still have control over personal health care decisions.
Aiza-Why isn’t paying out of pocket ok for women? If they don’t pay out of pocket, then insurance pays. If insurance pays, it gets it money from the women anyway, either directly in premiums or indirectly through their employer or the government. It’s not cheaper for people to have insurance because their premiums must be large enough to cover the costs plus the profits and bureaucracy of the insurance company or the government. You fail to realize that we pay for it anyway. But with insurance or single payer we must pay for our health care to someone else first. They keep a cut, make rules about what doctors we can see and when we can see them, and then we have to follow their rules when we need care to get some of our money back. Insurance is always a losing arrangement except for major burdens. That’s why it should only be used to do what it was created to do, manage risk in extreme situations.