Monday, October 01, 2007

Universal Health Coverage to be Pushed in Utah in 2008

A working group (see membership) made up of bankers, doctors, politicians (both Dem and GOP), insurance company executives, business people, nonprofit organization executives, and public employees has developed a proposal for solving all of Utah’s health care woes.

The group’s objective is: “To make health care more affordable (cost), improve health care outcomes (quality), and increase health coverage for the uninsured (access).” That sounds all mom, America, and apple pie-ish. How do they expect to pull off this magnificent feat? By lobbying the legislature in 2008 to pass a comprehensive package along the lines of Mitt Romney’s Massachusetts universal health coverage plan.

The plan has four parts: 1) Essential benefit package. 2) Health benefits commission. 3) Health insurance exchange. 4) Individual and shared responsibility.

To satisfy #1, all insurers in the state would be required to offer a package that would be deemed by a commission to be the minimum requirement. Services would become more expensive as treatments become more elective. The package would also “include financial incentives for healthy lifestyles and disincentives for high risk choices.” The escalating co-pay structure would eliminate deductibles. Anyone could buy more insurance if they wish.

#2 would establish a commission that would be made up of medical and financial folks that would determine what the minimum insurance package must include. It would also establish an appeals mechanism for disputes. Unspecified tort reform is passively suggested in a mealy-mouthed way.

#3 would establish a nonprofit non-government organization that would administer a health insurance exchange. It would function kind of like a stock exchange. The claim is that this exchange would provide everyone with adequate information upon which to base decisions and would reduce costs.

Finally, #4 is simply a fancy way of saying wealth transfer. If you earn more, you pay more. If you earn less, you pay less, but everyone gets the same thing (unless they pay for the upgrades).

The idea is to decouple health insurance from employment by providing to everyone the tax benefits currently reserved for employer provided health plans. Oh, and there’s this one little thing. No one can opt out. They will hunt you down and force you to buy this insurance. And if you’re below the poverty line, they will cram this insurance down your throat, whether you want it or not.

You can go online and vote on this proposal. You can also leave comments. Here are the comments I left:

“Many portions of the proposal sound interesting, but I have serious problems with other portions. I disagree with forcing everyone to obtain coverage. I understand the burden that the poor choices of others place on our medical system, but coercion further limits our precious liberties. It also doesn't always work.

“We have laws that require all automobiles operated on our roads to be insured, and yet a number remain uninsured. There are qualifying people that have refused to be coerced into signing up for government sponsored insurance programs that would cost them nothing out of pocket. I do not believe coercion will work any better for this program.

“I have a problem with a group of unelected "smart" people that would dictate to the rest of us what kind of health coverage we should have. The proposed board would ostensibly be political appointees. As such, their decisions would be incentivized at least as much by their political loyalties as by their desire to serve the public. Their decisions would reflect this. A good political decision does not necessarily translate to a good medical decision or a good market decision.

“What kind of risky behaviors does the central committee wish to discourage? This plan seems to transfer too much power to too few people to make such decisions. It all starts with the best of intentions, but a poorly designed power structure can lead to future serfdom.

“In fact, much of this plan seems to be based on the notion that free people are incapable of governing themselves on matters of health. Our Founding Fathers thought differently. Our current health system has problems, to be sure. But I find it strange that so many think that the solutions are found in more government regulation and meddling.”

I should have mentioned that studies have found no link between health outcomes and whether an individual has health insurance. This is important to note, given that improving health outcomes is one of the group’s main objectives. Chiropractor David Deardeuff says in this article that the two main problems with our medical system today are “lack of agency and lack of accountability.” Deardeuff hits the mark with this observation, although, I think his proposed solution is overly simplistic.

Frank Staheli has an interesting post on health care that discusses how we respond to incentives and how the current system insulates us from appropriate incentives. Frank suggests increased use of health savings plans. These operate without a lot of government meddling. HSAs free people to make health care choices and place a significant portion of the responsibility for those choices on their own shoulders; all the while shielding people from catastrophic costs.

People will argue that consumers make too many bad choices under such plans, opting to forego preventative or early care that would cost them out of pocket, thereby, allowing problems to escalate to a more serious level. Once again, we are assuming that free people are incapable of governing themselves.

The answers to our current health system’s woes are not going to be found in more government control of the system. Rather, they are going to be found in returning to people their freedoms as well as their responsibilities. You can demagogue this and say that I am an evil person that hates the poor and wants them to die. I’m not saying that we shouldn’t help the poor. I am saying that there are good ways to do that, and using government power to coerce people is not among those good ways.

6 comments:

Frank Staheli said...

Excellent post.

When FDR came to power, several of his acolytes went to the Soviet Union to see how 'wonderful' it was there. What they liked about it was how easy it was to con people into thinking that experts could solve all of their problems.

With impetus from Herbert Hoover and the Stock Market Crash of 1929, people became ready for their 'Savior', Franklin D. Roosevelt. What they don't go back and think about, however, is that he was wrong about the free market and his solutions were a travesty foisted on America. If (during Hoover admin) the Smoot Hawley Tariff act were never passed, and if FDR hadn't claimed to be able to solve everything with government, the Great Depression would have ended much sooner, and may never even have happened.

It is people that don't read and understand history that would be in favor of the cockamamie health plan that this Utah working group is putting forward. And it is people that are nothing more than full of themselves who think they are the "experts" who can solve everyone's problems for them.

It's never worked. It won't work in the future. Encouraging people to take care of themselves, and helping each other out privately when we go through hard times--these are the proven methods for success.

Reach Upward said...

The centralization of a significant market segment will ultimately result in oppression and further limitations on choice. It all starts with the best of intentions, but a system of centralized planning has no capacity to actually achieve its stated ideals. This topic is well discussed in Hayek's classic book, The Road to Serfdom.

David said...

"People will argue that consumers make too many bad choices under such plans, opting to forego preventative or early care that would cost them out of pocket, thereby, allowing problems to escalate to a more serious level."

Somehow it goes under the radar that there is a reason why this happens. My incentive to pay for preventive care is lessened when letting the problem escalate will land me in a situation where someone else will pay for it. We actually have built in disincentives for people to take preventive care of their health issues. No wonder the system doesn't currently work.

Frank Staheli said...

David,

Very good point.

Scott,

I loved reading Road to Serfdom several years ago. I've found a copy of it on google books and am reading it again!

Democracy Lover said...

I think Paul Krugman has made the most potent observation on the conservative attitude toward health care:

"...modern movement conservatism attracts a certain personality type. If you identify with the downtrodden, even a little, you don’t belong. If you think ridicule is an appropriate response to other peoples’ woes, you fit right in.

And Republican disillusionment with Mr. Bush does not appear to signal any change in that regard. On the contrary, the leading candidates for the Republican nomination have gone out of their way to condemn “socialism,” which is G.O.P.-speak for any attempt to help the less fortunate.

So once again, if you’re poor or you’re sick or you don’t have health insurance, remember this: these people think your problems are funny. "

Reach Upward said...

James Taranto has a lovely response to Krugman's nasty column here (scroll down to Conscience of a Former Enron Adviser).