After reading a few articles and opinion pieces on the new State Children’s Health Insurance Program, or SCHIP – currently under debate as I write this in the Senate – Lez and I have been discussing some of the challenges surrounding the whole issue. First a little more on the new proposed legislation:
The legislation would renew and expand the popular State Children’s Health Insurance Program to cover four million more children over a period of 4½ years.The program, which now covers 6.7 million children, is set to expire March 31.
The legislation passed the House by a 289-139 vote on Jan. 14, and the Senate Finance Committee by a 12-7 vote the next day. The Senate is considering it and will likely vote soon.
Former President George Bush twice vetoed similar legislation in 2007, but President Obama has said he wants it to be one of the first measures he signs into law. “In this moment of crisis, ensuring that every child in America has access to affordable health care is not just good economic policy, but a moral obligation we hold as parents and citizens,” he said.
Broader Relief:
- Coverage now up to 300% of the federal poverty line ($66,150 for a family of 4)
Cost
- Estimated cost of around $32 billion over next 4.5 years
- Funded by an additional 39 cent cigarette tax
Even though I have an opinion on this piece of legislation, I am not going to debate it here. Instead I want to share the thought process that Lez and I fired back and forth as we developed our own opinions on the much larger issue of government or taxpayer funded health care.
[youtube=http://www.youtube.com/watch?v=o_LutWBunb4]
We have tried to boil it down to a reduced and isolated list (as if you could successfully do such a thing). Here are the chunks left at the bottom of the pot.
Emotion vs. Economics: When it come to health, emotion always wins
1. Most forms of health care are and will always be very expensive. It is the nature of the science that many long term and thoroughly tested failures – made by usually well educated and innovative people – are required to produce successful treatments.
2. Given a choice between receiving the best, latest, and also subsequently the most expensive treatment possible versus one that your present financial reserves allows, one will usually choose the former and acquire debt. There really isn’t anything more important than my health so I know I would easily go bankrupt if it meant receiving a higher level of care in a life threatening or near life threatening situation.
3. Insurance works today because of the ability to choose and exclude, by both parties. I can chose a beefy and expensive insurance plan that covers yoga, acupuncture, and natural remedies, along with my gull bladder operation, or I can choose a cheaper more basic plan that only covers large scale medical procedures. At the same time insurance companies can exclude those with certain expensive preexisting conditions and charge different people with different health habits different amounts. Its all statistics, these companies, like all businesses continue to exist because they provide a service and produce profits.
4. The goal of a taxpayer funded health care system is to cover all people who currently do not have health care insurance. Since many of the people who currently do not have insurance do not because of the cost, government will have to partially or fully pay for it. Since it is not morally sound to exclude the sick or obese from health insurance (rightly so), the cost or risk to the insurer (government) will be greater. There are only two ways the government can afford this cost: (choices just like a family budget)
- Raise income through taxation or mandated inclusion
- Control expenses through the regulation of health services provided and the construction of cost ceilings
5. The result will most likely be a combination of both. New taxes we can get used to and a new deduction line on our paychecks would not be fatal. Cost controlled and regulated health services might mean that I couldn’t get the best and newest treatments available because they are just too expensive to provide to everyone who demands them. Doctors pay may be capped limiting the supply and quality of specialists. Pharmaceutical companies would be unable to pour billions into research each year if their profit margins from successful developments are regulated. Lots of hypotheticals throughout these thoughts but it’s pretty much a given, if the government gets involved there will be mountains of regulation, bureaucracies, and red tape.
6. Since I can’t get the best care possible through the government health insurance plan, if I can afford it after the new taxes, I will purchase an umbrella private insurance policy covering better doctors, hospitals, retreats, drugs, etc. that are outside or in addition to the government plan. Thus there will always be private insurance.
7. When it come to health, emotion always wins and our opinion is that costs will always be greater than anticipated. We will always chose the best and the best is usually more expensive than the average. Other countries, peoples, and forms of government may achieve things differently, but we just don’t see a positive in this country without a mind altering shift to our way of life. And finally, it may be a broad generalization (I haven’t seen evidence of the contrary), whenever the government estimates health coverage cost, it get it horribly and devastatingly wrong. Here is a big example:
- Medicare: (trying to cover just people over the age of 65 by collecting from all)
Currently @16% of all federal expenditures
[youtube=http://www.youtube.com/watch?v=Dp8ZmQMCtqA]
Our conclusion… is that every government taxpayer funded health care system that tries to balance some form of new reasonable taxes and/or mandates will be a cost overrun nightmare and through required regulation and government cost controls, still provide a strong demand for a second tier private insurance market.
Since we have less and less of a capacity as a nation for entitlements as they currently stand, any new promised service is a bad idea for the short term and a true flat liner/do not resuscitate for the long term. We did some big research while back…Learn about our national debt
What’s your view? where did we go wrong, how can we improve our thought process…these are just our views and our cautions towards such programs, are we on track or a little off base, ok are we completely off base?….
Research on other current attempts: Have 2 extra minutes? Glance through these 2 other examples of recent attempts at taxpayer funded health care that seem to show support to our thought process and conclusions.
1. Hawaii tried universal kid coverage back in 2008 and it exploded…..
excerpt: HAWAII just had a vivid lesson in health-care economics, learning that if you offer people insurance for free – surprise, surprise – they’ll quickly drop other coverage to enroll.
As a result, Hawaii is ending the only state universal child health-care program in the country after just seven months.
The program, called the Keiki (Child) Care Plan, was designed to provide coverage to children whose parents can’t afford individual health insurance but who make too much to qualify for other public programs (such as Medicaid and Hawaii’s State Children’s Health Insurance Program). Keiki Care was free for these gap kids, except for a $7 office-visit fee.
But then state officials found that families were dropping private coverage to enroll their children in the plan. “People who were already able to afford health care began to stop paying for it so they could get it for free,” said Dr. Kenny Fink of Hawaii’s Department of Human Services.
2. Massachusetts provides health coverage but the cost is ballooning beyond anyone’s expectations…
In 2006 Massachusetts instituted Commonwealth Care – which provides low cost insurance for families making up to 300% of the federal poverty level and who are not insured by other means (ie. their jobs).
Under Commonwealth Care this means a range of incomes, depending on the size of the family will be covered. Full details of cost of this plan and what you would have to pay with your income can be found on the MassResources website. If an individual does not have health insurance they will have to pay a fee, supposedly to cover any emergency room visits they have to make without coverage. There is also a fine for companies that do not provide health insurance for their employees. The idea was to cover as close to 100% of Mass. residents as possible, and provide government aid for those who could not afford insurance on their own.
The benefits of the Massachusetts plan are that over 350,000 people have been newly insured, and there are only 2.6% uninsured as of 2008. This means those people should be getting better health treatments and enjoy better quality of life when they are sick or injured. Also, the out of pocket costs to the consumer are less, since the majority of costs are now paid by the government.
Some negatives are that the program has a huge budget deficit, in some estimates upwards of $100,000,000; and costs are skyrocketing due to higher than expected enrollment. With less out of pocket costs more people are taking advantage of health care and are getting better and more expensive treatments – so the government payments are ballooning. Also, with a massive increase in demand, the supply of doctors has been strained and it is much harder to find a primary care provider. There are often long waits for specialists and procedures.
To prevent some of these consequences, Mass. has come up with a huge amount of regulations – without these regulations there would be nothing stopping the surge in prices, as everyone would go for the absolute best care available, resulting in an even greater push on demand and wait for services. After all, there is nothing more important than your health, so if the costs are low you are going to take advantage of more options than you could otherwise afford.
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{ 17 comments… read them below or add one }
This is a good treatise of the problems of universal healthcare. One option might be to provide universal first responder care through the government along with a limited, generic-first prescription benefit. The first responder care would include visits to family doctors, OB/GYN, emergency room, and urgent care. In this way, the government can keep a lid on costs and cover the majority of doctors visits prompted by colds, infections, viruses, broken bones, lacerations, etc. This would be a more efficient use of resources since many uninsureds go to emergency rooms for basic care.
For the part of the healthcare system that really drives up costs – hospital stays, surgeries, chronic conditions needing specialized care, etc. – this can be handled by the private sector so that individuals can choose what kind of healthcare coverage they want and can afford. Some want all the bells and whistles while others just want the basics. I would never go to a chiropracter so why pay for the coverage. My wife can't have anymore children so why pay for pregnancy.
On a side note, a lot of people complain about our healthcare system and the rising costs associated with it. Many criticize the pharmaceutical companies, medical equipment/device companies, doctors, hospitals, and health insurance companies, but the primary reason our costs are increasing is because our healthcare system actually works. We live longer and the expanding life expectancy costs money. Sometimes it's a child that has a new surgery that cures them of their ills, sometimes it's an older patient that gets a heart transplant to keep going.
Matt, I would like to challenge something you said: that "we" (in the US) live longer. We are 45th in terms of national life expectancy, behind both the UK and Canada, which have socialized health care: target=”_blank”>https://www.cia.gov/library/publications/the-worl…” target=”_blank”>http://www.cia.gov/library/publications/the-world-factbo...target=”_blank”>https://www.cia.gov/library/publications/the-worl…
Personal choice is always a good thing in my book. Who is probably better able to make the correct choices for you and your family? you, or an elected official?
Good point. My view however is that the life expectancy number is another debate entirely. Are we low on the list due to the availability of health care, or is it our doctors, our technology, our sedentary lifestyle, our distaste of fitness and moderation, etc to blame for not being number 1…the list goes on. An interesting comparison may be survival rates treating diseases by country….not sure if this would show anything different than what you already found.
I agree – it's very hard to tack down exactly why the life expectancy of this country is what it is – I just meant to question the assumption that our health care is the best, leading to a high life expectancy. The fact of the matter is that we have the highest per capita medical expenditures of any country in the world, under our current system. I'm not saying that another country's system is "the answer," it's just food for thought. If we're spending the most, and not getting best care in return, we are simply doing something wrong.
you are right that not everything that is outrageously expensive in our system is so because it is the very best….so many variables here…..somewhere along the line we have allowed these costs to rise at the rate they do
I think this post should be titled "Why government health care will be extremely difficult"
I had a big rant going on this in my head. But my main points are this:
-Many other (most other?) first world civilized countries have some form of socialized health care and are not bankrupt.
-People have to accept that no, the gov't won't provide the best of the best and quickest health care (and yes, I think private insurance will always be there as a supplement)
-Insurance companies themselves are taking X% of the health care money, and for what value?
-People in a country as rich as ours should not go bankrupt due to a medical issue for which they had no control over.
-Perhaps ALL doctors don't need to be paid so much, or maybe we can allow less highly trained/skilled people deal with extremely routine stuff (obviously we need highly skilled doctors when things go wrong or for specialized stuff, and they should be paid well). Physician's assistants?
-health care already is ridiculously expensive, but we are pushing the costs primarily to employers. Also, our current system (at least my personal one) has little to no incentives for me to choose things that make more financial sense for the same benefit. They are paying for things I don't need.
-People without health insurance currently get all their care from the ER for free (taxpayer cost). Is that really cheaper than minimal preventative care?
-Our current system certainly is not the best we can do, and I don't think the "free market" can come up with one when it comes to things like health care. We can do better, we have to do better, and I do think the gov't is the one who is going to have to do it.
Ok, that is a lot of points!
I just really hate how much my health care is tied to my job
The title is a little misleading, you're not talking about government health care. You are talking about government coverage for the poor and uninsured, which is different. Government health care is group coverage on a national scale, in a large group you get both healthy and unhealthy individuals. On a whole it balances out, the healthy help carry the burden of the sick. In exchange they get a safety net, should they get sick they are covered. In our private for profit system it only makes business sense to kick out the sick, it makes shareholders happy. The uninsured then get left over for the government to pick up at extraordinary cost since there are no healthy people to help carry the burden. You get to pay more in taxes so the insurance company can make more in profits.
Did I say "Matt" when I meant Michael? Sorry about that! Don't know where my head is today.
i have to agree with miss m. i'm all for the approval of government health care for the poor and uninsured though. i think they have as much right as anybody else to acquire those services and they should not be deprived.
You bring up some good points. I certainly agree that the last place I should get my insurance from should also be my source of income. I think the whole workplace covering workers started as a result of a tax break that employers received and wanted to take advantage of. Over time they never changed and now we are in this mess.
Its a big challenge to be logical when dealing with an emotional issue like health care. It comes down to economics vs. emotion again. There are arguments on both sides. No one is ever turned away from hospital care in our current system, no matter how poor, but do we all deserve the same level of coverage? Where do we set the base line, higher, lower…..
Before social security was government based retirement a right? We had to save to avoid poverty in old age. Now we have a base line, but also a new tax and an entitlement that may bankrupt us all…
Another problem with the free market coverage is that we barely see the cost of our care when insured. We just go receive the tests and meds, pay our $10, and leave. We don't care what the hospital billed the insurance company. If we saw the bills, and maybe had to pay upfront, we would care how much the band aid, or hospital jello costs.
We were thinking about any form where taxpayers pay for health coverage, so our current system with SCHIP and medicare, or an expanded government program where more or all are covered. You are correct and there are only two ways to pay for it: higer taxes on those who earn money and/or mandated inclusion into the program, and regulation and limits on the types and quality of care.
A larger program would have to include healthy and sick poor, middle, and wealthy. Generally more people are healthy than sick, so if you mandated all citizens there would be more of a pool to drink from. It could be done but would be another large tax for earners and extremely likely that the plan would be a major money pit for the government. Now that is not extremely terrible, but I don't believe we have much room for any more massive expensive entitlement programs.
Medicare, which only covers some care for those over 65 by collecting taxes from all working citizens, is a HUGE burden on our country and running $34,000,000,000,000 in the red. I don't see a long term solution unless we fundamentally alter our way of life.
I agree that some level of health care is a good thing for everyone, regardless of their social standing. Where Miss M and I disagree is the fact that we are in fact talking about government health care, which would cover not only the poor and currently unisured, but also those who already have coverage and are not poor. Anyone who paid into such as system would (rightfully) expect some level of basic health care. The only way for any kind of full coverage system to work would be to force everyone to join and pay, otherwise the pool of money would not be enough to cover the poor – because they cannot pay for themselves.
I also think that there wouldn't be enough "healthly" people to cancel out all those poor and/or unhealthy people that would need government assisted coverage – unless payment into such a plan was based on health the way current private plans are, or income – forcing "the rich" to pay more than their share to counteract the poor. The costs would simply be astronomical.
I will be the first to admit that I don't know the answer to the health care/health insurance dilemma in the US. I am currently living overseas in SE Europe, and the state-funded care here is pretty abysmal. They pay doctors nothing, despite the fact that they are well-trained, and all the good caregivers want to leave so that they can make enough money to provide for their families. However, there are private hospitals here (and private insurance) for the wealthy, so I guess "technically" that leads to everybody being covered… but I sure wouldn't want to end up in a state hospital here. Also there are a lot of undocumented persons here who have no medical care whatsoever.
Jerry
I think that there are possibilities out there, and options that are better than what the Brits and Canucks have to offer. The system is broken in the States, and it is not sustainable as it is… I am intrigued by elements of the health care systems in Holland and Austria, to name two, which seem to balance elements of national health care with a market model. I don't know the answer, but the stuff that's being bandied about in DC (both by politicos and by insurance lobbyists) seem to make less and less sense by the day.
Jerry
Most of what you said in number 3 is putridly false.
3. Insurance works today because of the ability to choose and exclude, by BOTH PARTIES.
Whatever, consumers can't choose anything any more, the insurance companies all see the same medical records, they comb through EVERY WORD of your history and deny you anywhere and everywhere they can. Don't believe me? Watch Michael Moore's Sicko, and for those of you who hate MM SHUT UP and watch it anyway. It is factual and well-researched. It had to be because he knew unfair critics like you who call him fat and ugly would attack it. The only ones making the choices are insurance companies – to DENY you.
. I can chose a beefy and expensive insurance plan that covers yoga, acupuncture, and natural remedies, UMMM can we see that plan please? Whatever. In my state of Colorado, massage therapists were removed by state law for whatever reason by the insurance lobby.
Its all statistics, UMMMM NO it is people's lives. People are being killed because insurance companies won't cover things they need – life and death medicine and operations. How mean and nasty of you to say MY healthcare is just a statistic. It's NOT.
Scott, thank you for the comments. in response: You confirm that insurance companies are able to pick and choose you based on a set of criteria, so that is the first half of number 3. The second part seems to have been hampered by the involvement of government. It is sad that you as a consumer are now unable to pay more for a service that you would like. In my opinion government and health insurance do not mix: someone else is making the decisions for you.
That leads me into replying to your next part. Right now your level of care is only capped by the choices you make, the insurance plans you choose, umbrella plan on top of umbrella plan or as cheap as you can get. If you get onto a government plan, you are now at the mercy of some statistical bureaucratic chart which determines if that 67 year old is worth a kidney transplant. It is a fact that healthcare must be rationed to some degree. Will that level be determined by your or someone else?
I don't think I called anyone fat and ugly, but now that you mentioned it… just kidding.
Interesting debate, thanks for sharing.