Universal Health Insurance
Kevin Drum cuts to the chase on involving the insurance industry in a universal coverage plan, in a post about DNA testing, DNA and the Insurance Industry
It’s worth saying this over and over: insurance companies don’t discriminate because they’re evil. They do it because it’s what insurance companies do. It’s a core part of their business, and if they don’t do it they’ll go belly up.
This is the biggest reason for wanting to get private insurance companies (mostly) out of the healthcare business. If it were just a matter of their being corrupt or evil, that actually wouldn’t be so bad. We could figure out ways to regulate them into good behavior. But it’s harder than that. The kind of behavior that most of us want — comparable coverage for everyone under nondiscriminatory pricing rules — is flatly not something an insurance company can offer. If they do, they aren’t being an insurance company. And if they aren’t being an insurance company, then what good are they doing?
That’s the problem with the Obama and Clinton plans – they want to include the insurance industry. The insurers only want to issue policies to people that will never make a claim, and they spend millions every year determining who these people are. We are almost at the point where anyone the insurance industry is willing to sell a policy to, can be fairly certain they won’t need one for an extended period. This isn’t a bug, it is the design of the system that will produce a profit for insurance companies, which is the reason they are in business.
[Added personal aside: based on their performance after Katrina, I feel that insurance companies are both corrupt and evil.]
34 comments
Switzerland and The Netherlands use a system similar to that proposed by Edwards and Hillary, where everybody is required to purchase health insurance from private companies or public pools. Thing is, the “private” insurers in those countries are so highly regulated that they might as well be government bureaucracies — everything from profit margin allowed to rates charged are set by the government. Their governments aren’t corrupt like here in the U.S., where insurance companies can basically buy whatever legislation they want and laugh at the notion of being effectively regulated.
As for Obama’s health care plan, I’ve already eviscerated it on my blog, so I won’t talk further about it. Needless to say it is neither “universal” nor workable and has no chance of being passed once the GAO gets their hands on it and points out the rather horrifying effects of passing legislation to implement it. The basic problem is that under Obama’s plan, only sick people will bother buying health insurance. Problem is, 15% of the national GDP is going to health care, and sick people don’t make 15% of the national GDP. Unless *everybody* pays into the pool, what you end up with by forcing insurers to accept sick people is a bunch of dead people as health insurance rates go into a death spiral, which is hardly different from the current situation in the end and thus why Obama’s “plan” is a non-starter.
Anyhow, ’nuff of that. I need to go cuddle a kitty to bring my blood pressure back down, this gets me hot under the tuxedo…
— Badtux the Health Care Penguin
If I could comment on your blog, I would have agreed with you multiple times. Medicare for all is the clean and simple solution, not the “assigned risk pool” that is used for auto insurance most places, and in Florida for auto and homeowners insurance. That’s the insurance companies’ plan – the government takes all the risk and the insurance companies take all of the profits.
WARNING: several only-remotely-connected thoughts:
It occurs to me that the problem (or at least part of it) lies with talking about universal health care as opposed to insurance.
Both Clinton and Obama are right – health insurance will not be truly universal unless it is mandated to all, and yet all will not buy it unless it is affordable.
Yet affordability shouldn’t even enter the equation, and neither should the concept of ‘buying’ it. It should just BE THERE, for everyone, whether they want it or not – like Medicare, like Social Security – like death and taxes.
Private insurance companies have no place in the system; they will drain the treasury dry with constant increases and drive legislators nuts with their constant end-runs around claims.
Whether that makes any sense or not, I don’t know. I do know that Medicare for all is the only sensible system, and can’t for the life of me understand what’s so complicated about it.
Phase it in? Sure….let’s start with children. Then in a year or two, work downward to the Baby Boomers. And so forth. It ain’t rocket science.
The insurance industry lobbyists are the only people who really object, and they have entirely too much influence in Congress. We are nearly at the point where half of all health care costs are paid for by the government at some level, so we need the revenue stream to cover that expense.
Medicare for all is the solution.
I really must disagree with Kevin here. In the first half of the previous century, insurance was a downright progressive concept. Reportedly, the now-famous, then-ignored American composer Charles Ives was proud of being an insurance salesman, because the availability of insurance advanced Americans’ access to health care. (Those were the days.) There is nothing intrinsically evil or corrupt about the concept of insurance.
The implementation of insurance in today’s America, on the other hand, is nothing short of deplorable. And the insurance companies are at the core of that bad behavior. (Well, I know mine certainly is.) If insurance companies cannot be omitted altogether from the process… my own fond hope, and I’m sure that of many of you as well… they must be brought in line by legislation that curbs their worst excesses and cruelties. Can Obama or Clinton cause that to happen? Not by themselves. But somehow it must be done, and inevitably they must be part of the doing.
The change came when insurance companies shifted from the mutual to the for profit model. The old Blue Cross/Blue Shield had good coverage at a decent price when I was in New York, but then I ran into Kaiser Permanente in California and my worldview on health insurance changed.
The least expensive, most efficient method of paying for health care is the Medicare model. It works and everyone knows what it is. If someone can afford more, they can pay for it, but if we want to get this done we need to go with a proven system.
I agree with you Bryan, but I would make Medicare for all open enrollment with no premium. Private healthcare organizations could continue to exist and code share, they may offer more services for subscribers for a low premium since Medicare covered expenses could be passed through.
On a personal level, people like me who have genetic conditions should not be a burden on private insurance pools, or no private insurer wants to cover us, even if they are legally required. If I were forced to Medicare, my enzyme would be covered, so why shouldn’t Medicare cover it regardless?
With all due respect (and sympathy) for your medical problems, Michael, the class of “people … who have genetic conditions” includes just about everyone. The degree to which they manifest themselves in life-affecting symptoms varies, but just about every family has genes that will cause most of its members problems eventually.
That said, I agree with your conclusion that Medicare-for-all should be government-funded, probably through some sort of progressive taxes, either a specific tax for just that purpose, or (better IMHO) out of general revenues from progressive income taxes. A civilized nation does not deprive its nonwealthy citizens of basic healthcare… which means that the U.S. is, at the moment, uncivilized.
People need to remember that Medicare is a health care insurance program, and people are “entitled” to it by virtue of having paid very low premiums for decades before it become available at 65. There has to be a funding scheme, and the payroll tax is the best way of ensuring that the cost is distributed and the money is collected.
If Medicare is to be extended, the money must found and guaranteed. The lowest cost option is universal coverage, because everyone pays a little and gets the care they need from the medical providers of their choice. There is more freedom of choice for patients under Medicare than almost any other form of medical insurance currently available.
This is not “socialized medicine”, this is “socialized medical insurance”, like almost every other developed nation on the planet.
Michael, why would you expect the Medicare insurance plan to cover something that you don’t think private insurers should have to cover? The major differences are the delay in coverage under Medicare is until the age 65, and the fact that Medicare is non-profit. Restaurants in most states are required to have bathrooms – there are always government requirements if you want to operate a business.
I think I should clarify, my enzyme is covered by private insurance. Because it is produced by one company under the Orphan Drug designation, it is very expensive. Approximately $10,000, every two weeks. Medicare would also cover it, if I could not keep private insurance, as it really is the standard of care for my condition.
My only point, Michael was the funding. I feel sure that both the insurance company and Medicare would get a major discount on the treatment, as the stated price for the uninsured is always at least twice what the insurance companies pay.
Switching to Medicare for all immediately eliminates about 30% of the overhead costs of private insurance, and there are other savings realized by the actual providers of health care as the system is simplified.
i can’t match the $10,000/biweekly price tag, but i’m another one who has been a ‘high-maintenance’ person from day one. but in spite of all the gloom-and-doom spread by a few selfish idiots, the percentage of the population requiring truly expensive medical care isn’t all that huge, and most of us are productive enough citizens that we repay that investment with interest.
hmmm… $10,000 every two weeks = $260,000 every year [yikes!] divided by 300,000,000 people = wow, it would cost me almost one whole dime to keep michael alive this year if we had medicare for all. oh, the burden! 😈
[…] Universal Health Insurance […]
The thing is that the current Medicare system accounts for some of the most expensive people to deal with, so the new people will decrease the cost of even that system by sharing it. It’s not a matter of taking the cost of the current system and dividing by the number of current enrollees to determine the cost of the new system, because the overwhelming majority of new enrollees with require a lot less health care than the current members of the plan.
The truth is my enzyme cost is only because there are a small number of patients that need it, and there is no economy of scale, and there is a for-profit pharmaceutical company that makes billions of dollars every year on a product that was produced mainly at government research labs. But that’s our medical system.
yep. kids and working-age adults are cheap to pay for. letting them into the medicare pool, especially if you required them [and employers] to pay some kind of premium via income [and payroll] taxes, would would definitely help.
would i be willing to part with another $1000-$2000 in income taxes each year in return for guaranteed health care? in a heartbeat.
If everyone is in $100/month may be a high estimate. Remember that there really aren’t that many changes necessary other than expanding the claims processing, and that is contracted out. The states will save their Medicaid and SCHIP expenditures, to be spent on other things. There are a lot of savings available in the system.
Of course, there definitely needs to be an expansion in Medicare fraud investigations, because that is an ongoing problem that is not adequately addressed.
We really need to do this.
we do need to go after the fraud. we’ll need to spend some money doing that.
we need more doctors, and a lot more nurses. and we’re seriously short on mental health care, both in caregivers and infrastructure.
we’ve got too many high-priced specialists, because that’s where the big bucks are. we need more family medicine, internists, general practitioners, all the inglorious and lower-paying but most necessary of the specialties. probably we should defer repayment of, and maybe ultimately fully forgive, the student loans of any graduating medical student who stays in one of those fields for 10 or 20 years.
have you spent any length of time in a hospital lately? [as an observer] i have. even the best of them are giving short shrift to mopping the floors, changing the sheets, providing patients with clean gowns, cleaning and dressing wounds, properly disinfecting, or even replacing, surgical instruments and supplies.
and hospital food. any hospital dietician/nutritionist should be able to provide a healthy complete balanced gluten-free menu, but i never got even a single edible meal the last time i was hospitalized. good thing i didn’t feel much like eating anyway.
those of us who make more monsy are going to have to subsidize the ones who make less, or none at all.
france. i hear the doctors in france make house calls. i still remember those from my childhood.
i’d pay extra for all that to be standard.
We have a medical school loan program in place that is being abused by doctors. They are supposed to come out and work off the loan, but they opt to enter the more lucrative specialties and wait for the government to chase them down for repayment. We could start by imposing licensing sanctions on those people.
The state medical board has received multiple complaints about the local hospitals from my family over their supposedly adequate staffing levels. They aren’t adequate, and they know it. For profit hospitals are almost as bad as for profit insurance companies.
The fraud thing is out of hand in Florida to the tune of tens of millions of dollars, and we just are not going after these people.
If we straighten out the funding, many of the excuses for the current mess disappear and you can see who is doing a good job and who is ripping off the system.
The idea of medicine for profit is a mistake. That isn’t to say that medical personnel should not be well compensated for their education and skill, they should, but it shouldn’t be a capitalist venture after all. The patients can hardly refuse to pay whatever the price is.
I have no problem with them making a profit, so long as they accept some of the risk. It has never made much sense to me that while no one would pay a plumber if their pipes continued to leak, doctors are paid no matter what the outcome of their work.
doctors are paid no matter what the outcome of their work because there’s no way to guarantee an outcome in medicine. you can repipe a house entirely if that’s what it takes to fix the leaks, but we’re not to the point where we can do that for people yet.
I don’t think it makes sense for doctors to be making profits on risky operations, Bryan.
It’s not the doctor taking the risk, after all. It’s the patient.
i favor hiring more auditors [or whatever] to track down the ones who should be repaying their loans, because i like the idea of providing a free or low-cost education for doctors, especially in areas where there’s a critical shortage. and definitely hire more auditors and lawyers to go after the fraud.
it’s unfortunate, but the for-profit hospitals really have become nearly as bad as the for-profit insurance companies. i don’t mind in the least if the hospitals, doctors, labs, insurance companies, clinics, etc make a modest profit, but it needs to be a very modest profit indeed and there need to be heavy-duty controls in place to keep a short leash on the predatory and the greedy if we’re going to go that route.
returning to the arithmetic for a moment, we spent something like $7000 per capita last year. ditching the insurance companies would free up 30% and maybe even 40%, but that still leaves us with the task of funding $4000-5000 per person per year.
I’ve mentioned before that the uninsured price is twice as high as the insured price, now prices will be leveled with providers being paid for every patient. That eliminates the costs to providers of bill collection agencies and the court costs of suing to collect what’s owed.
The list goes on and on, but the 30% is the direct overhead above Medicare’s that insurance companies spend, without regard to the costs of providers.
We have one of the least efficient systems in the world for providing health care, while having the potential of being the most efficient when you look at the VA system. If we start catching problems early, the problems become cheap to cure. Most of the babies that end up in the neonatal units wouldn’t be there if about $500 had been spent on prenatal care. Canada has very few neonatal units, because they don’t need them. That’s another area of savings.
It is workable, and can be financed through payroll taxes, just like Social Security and Medicare are now.
hipparchia, are you saying you think that doctors should make a profit or that they should have income? Because there is a difference. the idea of medicine as a capitalist venture winds up with schwing pills being marketed on the television.
I want to be clear that I am not in favor of making doctors reduce their incomes. I am in favor of their incomes being based on something other than a reward for risk. Profits are always balanced by losses somewhere.
Or maybe I’m just ranting, at this point, because there is what we can achieve and what Bryan is saying is correct. The expense of all this stupid discriminatory health care for those who can afford it is probably greater than the expense of providing health care for all by a significant margin, especially when you factor in all the lost productivity due to lack of medical care.
The expense of all this stupid discriminatory health care for those who can afford it is probably greater than the expense of providing health care for all by a significant margin, especially when you factor in all the lost productivity due to lack of medical care.
yep. i agree 100%, michael.i agree with bryan too, except that i think it will cost more than he’s projecting. this country really does need to just go ahead and make the leap to either national health insurance or national health care, no matter which of us is closer on the $$.
as for doctors making a profit, that’s hard to measure. definitely they should be able to make a decent living.
i paid $28 for my flu shot this year. if after paying all the salries and benefits for employees, taxes and mortgage on the property, utility bills, and the cost of the vaccine, the needle, the syringe, the alcohol, the gauze pad, and the bandaid — if all that only cost them $27, i haven’t got a problem with it.
There will be a good sized initial cost from people who have been putting things off until they can get Medicare, but I still think we need to start with children, because that is where the greatest savings will accrue later. There will be a “bump” in costs as people finally get to see doctors, but early diagnose leads to the cheapest cures.
We are also going to need to look at incentives for doctors to become GPs, instead of specialists, because out current ratio is out of whack with the rest of the world, where half of all doctors are in family medicine.
But can you dance to National Health?