Wednesday, January 20, 2010

A modified health care bill

My health care bill would consist of a single paragraph:

"Health insurance companies may no longer deny applicants coverage due to pre-existing conditions. They may not change their premiums based on a person's medical history."

This would make for a very popular bill. Of course, there would be an enormous incentive for people to jump off the insurance roles until they ran into a situation where they needed intensive medical care. That's what the individual mandate was supposed to fix.

Without a mandate to get coverage, premiums for those who remain on the insurance rolls would skyrocket, causing even more people to jump off the rolls. Within a decade, the health insurance industry would be dead.

Then we could finally get a decent Medicare-style single payer system for all Americans.

It's simple, people: If you're going to get to universal coverage (which most Americans want) and you're not going to cut the insurance industry out of the picture (which most Americans want, God only knows why) then you have to mandate that insurance companies take anyone who comes along. If you mandate that, you also have to mandate that everyone purchase insurance, in order to avoid the premiums death spiral I described above, and you need subsidies for Americans who are too poor to afford health insurance on their own.

This plan, or something very much like it, is what is needed to effect universal coverage without socializing the entire health insurance industry*.

Ask the right wingers what their ideas are for reforming health care. I've heard three ideas, none of which would work:

1) Tort reform: According to the CBO, "defensive medicine" and malpractice payouts comprise about 2% of overall health care spending. You can't make big gains there. Health insurance overheads, on the other hand, takes about 30% from the top.

2) Let insurers sell across state lines: We'll end up with something like the credit card industry, where all insurance is sold by companies based out of the one state with the fewest consumer protections.

3) Let people feel the costs of their health care decisions: Sounds market friendly in theory, and it has been shown that people who pay more out of pocket for individual treatments use less medical services. But the studies have shown that people don't have the expertise to distinguish between medically necessary and unnecessary treatments, and when exposed to greater market pressures, they are as likely to cut back on the former as the latter. Which is why health care services make for a lousy market in the first place.

The Republican idea barrel is pretty empty. According to the CBO, the Republican alternative bill for health care reform would leave the uninsured population unchanged in ten years. They have absolutely no idea how to get more people more access to health care, and they know it.

* Which wouldn't be such a bad thing. Health insurance isn't an industry where massive innovation is either needed or desirable.

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