Real Life with Ryuei

Michael,
Some common definitions to consider:
single payer option = Medicare
government option = Medicaid

Both of these existing options are available to both retirees and poor people; both of whomn cannot afford preventative medicine; are offered for free curently taxpayer paid.

The biggest fraud is of course over-billing. it would be nice to hear both parties requsting stricter regualtion of the insurance industry as the heatlh care insurance industry is no different than the auto insurance industry when they made auto insurance mandatory.

Now auto insuracne companies rate your coverage benefit based on your credit score, as if that has anything to do with your ability to afford auto insurance coverage. Of course California leads the nation in insurance fraud and the state is fighting the industry losing a good battle.

Perhaps the truth instead of political wrangling would be better for us common folk, like me when it comes to discussion of national health care coverage.

I found the the angry people already have good coverage and they are not thnking about the rest of us, just themeselves. my opinion.

Patrick

you're wife is quite right. the japanese health care system is pretty good. as an insured worker, I have a free, full health check each year, including blood tests, x-rays, cardiograms, stomach check, the works... all my colleagues also have this and of course we have the right to refuse or refuse parts thereof. this never happened in australia and the only time I went to a doctor was when I felt ill. this is a far better system in every respect and the choices are better with a great many more hospitals and clinics available here in japan.

The refusal to cover undocumented residents of the US is a prime example of politics trumping common sense.

Everyone should be covered. First of all it only human. Second, anyone that can get sick can get ME sick. So, cover everyone and we may actually contain things like H1N1! Untreated or poorly treated infections mutate into resistant strains, like MRSA and drug resistant TB.

I could go on all day about the ethics of having 17% of the population not covered by health insurance, but consider the practical reasons for this initiative as well.

This is a topic I know a little bit about. First, we probably have the best medical care in the world. There are three main things I see wrong; all of which are linked.

1. Access: The real number is about 13 million people who want health insurance, but can not afford it, and do qualify for the percent public options -- SCHIPS, Medicare, & Medicaid.

2. Medical Inflation: This is running about to or three times the rate of the CPI.

3. Portability: Most of our allegedly private health insurance system is employer based; it is not really portable and it is heavily subsidized by tax breaks -- about 300 billion a year.

Yes, we are "spending" 300 billion a year so employees can purchase or receive health care benefits pre-tax. That is not really 'hard spending' per se; but it is 'soft spending' -- lost income & payroll tax revenue. In addition, we are hard spending about 1.3 trillion a year on Medicare & Medicaid.

If we want a European model; we might look at the Swiss; who dumped their government insurance for properly regulated private insurance. I have an eight point plan to reform the present quasi-private system in the United States. Most of the points have been endorsed by the health insurance industry; they want reform too. I would be happy to share the 8 point plan if you are interested. I have gotten a bit gun shy because these discussions can inflame passions. The points address the real problems; access; medical inflation, and portability.

By the way:

"Myths and falsehoods about health care reform" is a complete waste of time. Bringing up things like "rescissions" side tracks the discussion. It is better to address the cause of rescissions. These happen because we have problems with access and portability. Solve those, rescissions go away. I am not even going to argue about rescissions.

Here is a useful link:
AHIP Statement on Health Insurance Reform
http://www.ahip.org/content/pressrelease.aspx?docid=28003

Also: [PDF]TESTIMONY OF RICHARD A. COLLINS BEFORE THE COMMITTEE ON ENERGY AND ...
http://energycommerce.house.gov/Press_111/20090727/06%20Testimony%20of%20Golden%20Rule%20CEO%20Richard%20Collins.pdf

Correction: 1. Access: The real number is about 13 million people who want health insurance, but can not afford it, and do NOT qualify for the percent public options -- SCHIPS, Medicare, & Medicaid.

The number does not really matter. There are also a lot of people who qualify for Medicaid; but have not bothered to apply. There are also a lot of people, mostly young & healthy, who can afford private insurance; but have decided to gamble and self insure.

robin says, "There are also a lot of people, mostly young & healthy, who can afford private insurance; but have decided to gamble and self insure."

Most young people are at risk, because the employers gamble with our youths health instead of treating diseases that can be prevented, like diabetes and smoking.

Employers gamble with our young peoples health by offering loow paying jobs with no health insurance coverage like Walmart and other etail employers. Most young people work part time and other non-traditional jobs, which is what this issue is really about. No coverage for many part time workers and young people, whom are at the bottom of the ladder both economically and socially.

Once my children grew up, I could no longer cover them under my health insurance plan past age 22. This is the core problem with American health care Insurance coverage, it does not maintain the core family concept and protections.

Many youhng people do not have heatlh insurance coverage not because they gamble with their health, but their employers gamble with their health.

Patrick

>>>Most young people are at risk, because the employers gamble with our youths health instead of treating diseases that can be prevented, like diabetes and smoking.

Hi Patrick,

First, these are my own studied opinions. I have some experience and education in this area from both / all sides of the table. I am open to persuasive, informed counter-points.

I understand what you are saying. However, I was talking about a different demographic. There are people who can afford health insurance; but choose not to. They tend to be younger, healthier and make good incomes. By younger, I mean 25 - 50. These are the people insurance companies want to insure; but because they are low risk and pay their premiums.

Insurance companies measure risk by something called Morbidity Rate: "The proportion of patients with a particular disease during a given year per given unit of population." Obviously that gets complicated. Morbidity rate charges {cost of insurance} are calculated by risk factors. These are age, gender, habits, occupation, medical history, height & weight ratio, geography, credit rating, driving record, income, and so on.

At present, health insurance in the United States is optional. In general, people with negative risk factors are more motivated to acquire coverage. This results in anti-selection. There is even anti-selection with Medicaid. Eligible persons tend to wait to apply until they need medical services. Anti-selection means that people who, with no incentives, voluntarily apply for health insurance, have a much higher morbidity rate than the general population.

Group insurance at work is different. There is a subsidy. People in the group are highly motivated and encouraged to sign up. Participation is or close to 100%. the premium payment is pretty much guarantied. That is why they have what are called 'open enrollment periods' for group policies.

Anti-selection is the only reason why Insurance Companies have to screen applicants in the individual market. There is a saying that you can not insure a burning house. The screening is called underwriting. People with risk factors have to pay more. There might be exclusion riders to deny coverage for certain conditions. Some people with high cost pre-existing conditions are denied any coverage. Sometimes, Agents and clients conceal health history and other risk factors to get policies issued. If caught, this results in rescissions. The premium is refunded; the commissions are reversed. No claims are paid.

The other issue is afford-ability. There are lots of people who qualify for insurance in every way except income. Insurance companies do not really want this market, because of the poor premium persistency. They take the application for insurance, underwrite it, deliver it, and pay commissions. Then the client drops it when the premium comes due. This results in the practice of post-claim underwriting. Instead of paying for the costs of underwriting up front {pre-issue underwriting}, they reduce acquisition costs by using an honors system. Then they underwrite selected people retroactively, when large claims are submitted. If people or their agent had concealed any risk factors to get the insurance; then they might get rescinded. This keeps the premium lower.

That is way over-simplified. However, there is a solution. If health insurance were mandatory; pre-existing conditions could be covered. That is because anti-selection would be eliminated. The other thing is that some people would need help paying premiums; some kind of subsidy. There is no point in the mandate if people wind up dropping it due to insufficient income.

This is not even debated. Insurance companies unanimously agree that if there is a *funded* mandate; then they could insure everyone who applies.

Access: Guarantied issue, guarantied renewal. I would also favor some form of community rating. This could be modified with discounts for healthy lifestyles and maintaining preventive care. There has to be an individual mandate. The best and fairest means of enforcement would be a progressive sliding scale tax penalty on net income; with a reasonable cap. There has to be a subsidy. This would be on a sliding scale; based on income as a percentage of poverty level. The best form of delivering the subsidy would be a voucher applied for at the point of sale.

Portability: I would get rid of group insurance. Everyone should have an individual policy that they can take with them if they lose or change jobs. There would be no shift from the group rate to the individual rate. The risk rating would then be the same -- no more expensive COBRA that most people can not afford. With modified community rating, everyone gets a group rate anyway. That gets rid of one of the advantages of Employer Based Health Insurance. The other thing is that employer based health insurance receives an unlimited income and payroll tax subsidy equal, on average, to 33% of the premium. It is over $3000 per employee and over 300 billion a year.

Employers deduct premiums they pay, as business expenses. The employee gets the benefits tax free. Employees pay their share pre-tax. Many employees can also buy supplementary policies pre-tax; through section 125. Section 125 plans are often expensive, luxury benefits. None of the money paid as premium is ever subject to payroll or income taxes. People in the individual markets do not get these tax subsidies. I would favor eliminating the tax breaks. That would generate enough revenue to provide subsidies to those who really need them. There should at least be a cap on pre-tax benefits; and the section 125 flex part is, IMO, a scam. Also, people in the individual markets should get an equal tax break.

The last thing on access and portability -- we need a uniformity in state laws. I would not support open borders unless that is addressed. Health Insurance is Interstate Commerce and should be federally regulated. This is not as complex as it sounds. What I propose is much simpler than the current mess of convoluted mis-regulation.

1. Everyone must obtain and maintain qualified health insurance. This would be enforced with an income tax penalty on taxable income. The poor would not pay this, as they have little or no taxable income.

2. All policies written individually, guarantied issue, and guarantied renewable. No one can ever be singled out for a rate increase. No one can ever be canceled for claims history or because they leave a job. No more rescissions.

3. Modified Community Rating: Everyone pays the same base rate; modified with a few healthy life style discounts {non-smoking, regular wellness care}. No one can ever be singled out for a rate increase. No more sneaky tactics like stacking or pool closing.

4. Sliding scale premium subsidies based on income as a percentage of poverty level. Delivered as a point of sale voucher. Financed by basic reforms of unequal treatment in the tax code.

Those cover access and portability. Covering everyone would help curb medical inflation, with huge caveats. More is needed:

5. Shift from HMOs and low deductible plans to a combination of HSA and high deductible catastrophic insurance with some co-insurance. Wellness and other routine care {deductible and co-insurance} should be financed out of pocket -- from HSAs. I would change the term 'deductible' to 'self insurance amount.' Unused portions of the HSA -- the self insurance fund -- roll over annually.

6. Any willing provider. No more PPOs or other monopolistic practices.

7. Complete transparency of costs and pricing.

8. Federalization / standardization of regulation and tort reform.

One thing, I understand that wellness care can reduce risk at the back end. The problem is that this is more than offset by the added upfront costs of first dollar or low deductible coverage. Hypochondria, malingering, unnecessary tests, and other abuses result in overconsumption. This is the single largest cause of medical hyper-inflation. That is why traditional HMOs added per visit co-pays and started rationing services.

Everyone who has low deductible health insurance is already paying for an HSA. They are just paying it to the insurance company as higher premiums. Premium savings from catastrophic insurance, in the current inflated market, would already fully fund an HSA in two to three years.