Hi all-
I was in Nashville all day yesterday, and then got very ill once home. I'm better now.
The healthcare 'summit' has occupied much of the news for days. I did not think much would come of it, and little did. Oddly, I favor a single payor system backed up with private insurance. Here's why.
Our current public options cover health care for the poor and the old. Anyone else must buy insurance privately. As one insurance broker put it, these companies are in the business of selling fire insurance to swimming pools. Insurance, when first developed, was considered an illegal form of gambling. While it is now legal, it certainly is gambling, with the odds very carefully set by actuarial means to favor the 'house'. Those who have insurance through large groups get lower rates than individuals. This is statistically valid when seen from the companies' view, but miserable from the consumers' view. Individuals and small groups pay high rates and have exclusions related to their illnesses. This is of course so that the individual pays enough premium that when they use their insurance they do not harm the company.
There have been loud complaints about a federal takeover of healthcare with a public option, and the cost of such a plan. What most people do not realize is that a universal federal plan need not be the only recourse, just one available to all. Costs are greatly misunderstood by many people.
Insurance companies build in a 20% operating margin. Their boasts that they have a 1% profit margin are merely accounting tricks, where salaries and bonuses are 'expenses', as are buildings and other non-patient costs. Having worked at Kaiser for 6 years, I became familiar with their costs and accounting. How does a non-profit retire 100 million dollars of debt, build 12 new buildings, pay physician bonuses to 300 MDs of 20,000.00 each, and yet show no 'profit'? Accounting is how. All theses items were expenses, and there was a generous allowance for buildings and administration, paid for by patient premiums.
Any public option will automatically cost 20% less than current private insurance to cover the same pool of people. By covering all, the cost actually goes down, because many healthy people do not have insurance, and yet all would pay the taxes needed to fund the system. In looking at tax costs, it is easy to forget that employees currently receive insurance not from an insurance fairy but their employers, money that would otherwise be in their salary. Employers and individuals know well how much they are paying for insurance. All that money would be kept by them, admittedly while paying higher taxes. But paying tax is a dirty word, while the cost of insurance premiums is invisible.
There need not be an end to private insurance either. Germany has had a single payor system for 140 years, and it works very well. Private insurers offer the equivalent of 'wrap-around' policies for those who want more coverage then the federal system. we could do the same. Using England's highly dysfunctional system as an example, or Canada's, obscures the successes of a centralized system.
Everyone dislikes the insurers, and with reason. Concentrating on the 10% of Americans without coverage is specious, and does nothing but upset the 90% with coverage. Defending the current system and trying to extend it through tax policy does nothing but keep the nation in thrall to companies who would be glad to have you die as long as you pay premiums.
My idea- a single payor federal system, with an end to medicare and medicaid. All people with social security numbers have health coverage through this system. Payments would go to doctors and hospitals just as they do now (medicare is the most efficient and accurate payor). There would be no 'health service' as there is in Britain. It is only payment and coverage that get centralized, not service. Obviously the federal government would decide what procedures would get covered, just as is done now for medicare and medicaid. Private insurers would be able to offer supplemental insurance, just as is done now for medicare. These policies would not be very expensive, and would cover the difference between what the federal system provides and what in individual wants. There would remain the option of cash payment for services, just as there is now for plastic surgery etc.
As I see it, such a plan would only change where the money for health care goes- to the feds instead of to insurance companies. Every other aspect of care would be unchanged, making the system transparent. Given that there is a 20% cushion in private insurance rates, I do not see that tax burden to insure the uncovered 10% would be greater than the savings from not paying private premiums; indeed, since the cost of the system would be spread over the entire population, there would be a net decrease in costs for those currently covered by employer plans.
I do not like 'big government'. In this case, it is paradoxically the apparently larger solution that costs less and is easier to manage.
Ted
I was in Nashville all day yesterday, and then got very ill once home. I'm better now.
The healthcare 'summit' has occupied much of the news for days. I did not think much would come of it, and little did. Oddly, I favor a single payor system backed up with private insurance. Here's why.
Our current public options cover health care for the poor and the old. Anyone else must buy insurance privately. As one insurance broker put it, these companies are in the business of selling fire insurance to swimming pools. Insurance, when first developed, was considered an illegal form of gambling. While it is now legal, it certainly is gambling, with the odds very carefully set by actuarial means to favor the 'house'. Those who have insurance through large groups get lower rates than individuals. This is statistically valid when seen from the companies' view, but miserable from the consumers' view. Individuals and small groups pay high rates and have exclusions related to their illnesses. This is of course so that the individual pays enough premium that when they use their insurance they do not harm the company.
There have been loud complaints about a federal takeover of healthcare with a public option, and the cost of such a plan. What most people do not realize is that a universal federal plan need not be the only recourse, just one available to all. Costs are greatly misunderstood by many people.
Insurance companies build in a 20% operating margin. Their boasts that they have a 1% profit margin are merely accounting tricks, where salaries and bonuses are 'expenses', as are buildings and other non-patient costs. Having worked at Kaiser for 6 years, I became familiar with their costs and accounting. How does a non-profit retire 100 million dollars of debt, build 12 new buildings, pay physician bonuses to 300 MDs of 20,000.00 each, and yet show no 'profit'? Accounting is how. All theses items were expenses, and there was a generous allowance for buildings and administration, paid for by patient premiums.
Any public option will automatically cost 20% less than current private insurance to cover the same pool of people. By covering all, the cost actually goes down, because many healthy people do not have insurance, and yet all would pay the taxes needed to fund the system. In looking at tax costs, it is easy to forget that employees currently receive insurance not from an insurance fairy but their employers, money that would otherwise be in their salary. Employers and individuals know well how much they are paying for insurance. All that money would be kept by them, admittedly while paying higher taxes. But paying tax is a dirty word, while the cost of insurance premiums is invisible.
There need not be an end to private insurance either. Germany has had a single payor system for 140 years, and it works very well. Private insurers offer the equivalent of 'wrap-around' policies for those who want more coverage then the federal system. we could do the same. Using England's highly dysfunctional system as an example, or Canada's, obscures the successes of a centralized system.
Everyone dislikes the insurers, and with reason. Concentrating on the 10% of Americans without coverage is specious, and does nothing but upset the 90% with coverage. Defending the current system and trying to extend it through tax policy does nothing but keep the nation in thrall to companies who would be glad to have you die as long as you pay premiums.
My idea- a single payor federal system, with an end to medicare and medicaid. All people with social security numbers have health coverage through this system. Payments would go to doctors and hospitals just as they do now (medicare is the most efficient and accurate payor). There would be no 'health service' as there is in Britain. It is only payment and coverage that get centralized, not service. Obviously the federal government would decide what procedures would get covered, just as is done now for medicare and medicaid. Private insurers would be able to offer supplemental insurance, just as is done now for medicare. These policies would not be very expensive, and would cover the difference between what the federal system provides and what in individual wants. There would remain the option of cash payment for services, just as there is now for plastic surgery etc.
As I see it, such a plan would only change where the money for health care goes- to the feds instead of to insurance companies. Every other aspect of care would be unchanged, making the system transparent. Given that there is a 20% cushion in private insurance rates, I do not see that tax burden to insure the uncovered 10% would be greater than the savings from not paying private premiums; indeed, since the cost of the system would be spread over the entire population, there would be a net decrease in costs for those currently covered by employer plans.
I do not like 'big government'. In this case, it is paradoxically the apparently larger solution that costs less and is easier to manage.
Ted
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