Health Care and GPS

Why can’t we get from here to there?  Today we have access to GPS to guide us anywhere we wish to go.  Just walking around dodging people glued to their smartphones is indicative there is hardly anyone without GPS.  All you need to do is tell your phone where you want to go and it gives you turn by turn directions.  There’s just one rub, you must have a destination. Even something as wonderful as GPS is useless without a clear end point. This the failure of our present health care plans, whether it’s the ACA or the new Republican  AHCA.  Where exactly do you want to go? Is it universal coverage? We have that already.  The Emergency Medical Treatment and Active Labor Act in 1986 established anyone showing up at an emergency room needing medical care must receive it whether or not they could pay. From that point on we’ve had universal care, just the most expensive and least effective system possible.  Treating a cold at an emergency room is incredibly expensive, but waiting for something to become an emergency situation can be far worse. Without government total reimbursement, we have providers shifting costs to those who actually have insurance.  Up goes everyone’s premiums. This unfunded mandate has resulted in cost distortions without improving the overall access to health care. The first thing then, we have agree we have universal care but we have to make it effective care on a cost-effective basis. Emergency rooms just aren’t going to turn people away and someone will pay.

So how do we do we get to the right  Universal Coverage ? Some favor the Government solution. We’ll call it the Washington resolution.  Government either is the provider of all health care or  the sole payer for services. In the first instance think of the VA. Providers all work for the Government in buildings owned and equipped by government. In the second providers are paid for services by the government at prices it determines. Think medicare. Both are top down operations ,with Elites getting together to decide what’s offered at what price. History has taught us, no matter how smart the people running things are they rarely get it right. If this wasn’t true the Soviet Union would’ve won the cold war. Instead it crashed. Without market pricing to regulate supply, we can’t obtain market clearing prices. Too little capacity and we have shortages leading to long waits. Too much and we empty spaces and under utilized  resources. We in Phoenix are well aware of just how deadly long waiting times can be with the VA horrors.  The right to health care is meaningless unless it is given in a timely, professional and up to date fashion. The people who died waiting at the VA had “affordable”coverage.”  Didn’t do them much good.  Venezuelans have “coverage” but no medicine. Equal suffering doesn’t equate with actual care and we shouldn’t confuse the terms. Medicare and Medicaid offer “coverage” to an ever-increasing number of people, at the same time an ever decreasing number of people are offering to service them. Now we want to add more people? What could possibly go wrong?  Yet, those advocating the top down Government solution such as Bernie Sanders roar, “Medicare for all.” Never mind Medicare will exhaust its reserves in 2028 or sooner if we have a solid recession or two in the meantime. However, with all its problems the Government solution is popular the world over. Most of our NATO allies have gone this route. Europeans since World War II have really taken to entitlements no matter how uneconomic.  Maybe that’s why they can’t spend even 2% of their GDP for their own defense. It isn’t only other countries, our current President, a longtime single payer admirer, just lauded Australia’s Government centered system. It’s easy to see why. Initially it’s  simple to understand and use. You need medical care, just give them your medicare card. You paid something in and you’re entitled to care. Well maybe you didn’t and aren’t. According to Politifact in 2014:

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Catching Up on Politics & Health Care

Politics:

It’s been really hard to comment on the Trump administration. Whatever you thought Trump stood for yesterday is the opposite today.  Put a thought on paper about a Trump policy, turn on the TV and  find he’s now 180 degrees from where he was when you started writing. Not that we find this surprising. We warned everyone last November in our Election Recap post, if Trump adopted  the Republican establishment program he ran the risk of losing his clout.  His first act, the Travel Ban, was a disaster but at least kept faith with his most ardent followers.  However, health care was another thing entirely. Trump had promised “Repeal & Replace” Obama’s Affordable Care Act (ACA) and then outsourced the legislation to Paul Ryan and the Republican House leadership.  Six years in the making and their bill was so poorly conceived it garnered only 17% approval. Trump not only wasn’t aware of  the legislation’s multitude of failings but ordered his chief strategist, Steve Bannon, to demand the most conservative members of Congress, the Freedom Caucus, to fall in line and support the bill or else.  The Caucus at least realized the bill as written was unacceptable to everybody.  In fact, the Bill’s only saving grace for Republicans was it cut Medicaid enough to facilitate their Tax Cut Bill.  The Trump pressure expressed through Bannon,was horribly misplaced.  The only special power Trump has over some Republicans is the threat to primary opponents. This can only be done by running candidate further to the right against the offending incumbent. How do you get to the right of the freedom caucus?  With no running room on the right, the Administration could only belatedly give ground to the Freedom Caucus, but this lost moderate votes.  By not knowing where his power emanated from and how to use it, Trump saw the bill pulled with egg on everyone’s face. Bannon was blamed and now the Troika of Ivanka Trump, Jared Kushner and Gary Cohn appear to giving direction to the administration. All three are Democrats.

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A Visitor

The saucer rolls to a stop on the campus of UNAM and out pops a young space traveler. Approaching a group , the stranger addresses them”Hi, I’m Alexis from the planet Intellection. I’ve come here to the health conference to gather information for an inter-galaxy health report.”

The nearest person answers graciously, “Glad to meet you. I’m Jane Philpott, Canadian Minister of Health. What can I help you with?”

Alexis:Tell me about your health care system

Jane: Gladly. We have great system. Single payer Universal Heath Care we’re very proud of. Everyone is well taken care of and happy with it.

Alexis: A Government sponsored closed system with no need to go elsewhere then?

Jane: Well, not quite. It used to be that way but some people got upset with waiting times and having to go to the United States for faster care, so they sued. Now we also have higher cost Private clinics.

Alexis: If they sued maybe some weren’t so happy. So you have a two tier system where the rich can pay to get better service but all the others have to go along with whatever is given?

Jane: Well, only a few wealthy people are out of the system

Alexis turns to another in the group and asks “who are you?” The man Answers,”Hayek Friedman from Imaginarium.”  “What system does your country use” queries Alexis.

Hayek: We use Dave’s Plan.

Alexis: Describe please.

Hayak: Everyone has a Personal Benefits Account (PBA) A minimum of 10%, with a 2017 $28,000 maximum, of  everyone’s income is deposited in the account along with any government support funds for the lower-income. As an incentive Employers can also deposit matching funds . Each account purchases a catastrophic health care policy and the first $10,000 is invested in a government enhanced liquid fund to pay for any medical costs up to where the Catastrophic policy kicks in. Beyond that you invest the rest as you wish to secure a better future.

Alexis: How do they access their funds to pay providers?

Hayek: With the PBA associated credit card.

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Republican House Healthcare Plan & Dave’s Plan Compared

Finally after a six-year gestation period, Paul Ryan and the House Republicans have finally given birth to their answer to the Affordable Care Act (ACA).  After going through the Bill we kept hearing Peggy Lee singing “Is that all there is?” The Bill has been derided by the Democrats as “Obama care Lite”, but it’s more Dave’s Plan Lite-very lite. The whole idea of any healthcare plan is to provide decent care at a reasonable price.  The ACA’s rapidly increasing premiums and deductibles, disappearance of policy choices in wide swaths of the country and the diminishing number of providers taking Medicaid are well documented. Just how the Republican Bill does much to fix these problems escape us.

The main cost suppressants in the bill are the ability to buy  basically catastrophic policies across state lines and expansion of Health Savings Accounts (HSA).  Dave’s plan has always had this across state line provision.  In fact we feel you should be able to buy coverage from any financially stable provider at home or abroad. Insurance , drugs or surgery, get the best deal you can nationally or internationally.The more competition the better. The problem is it doesn’t fully address the real insurance killers, pre-exiting conditions and failure to maintain coverage. It provides a  “Patient and State Stability Fund” to subsidize states dealing with high risk patients but unlike Dave’s Plan, falls far short of covering all pre-existing conditions and ultimately eliminating the problem. For instance, people exceeding Medicaid income limits or have an employment change in the future may have become a high risk making the pools and costs are endless. The Republican Plan maintains the ACA’s prohibition of the pre-existing condition exclusion, but allows for up to a  30%  penalty for lapsed coverage. As we have said before, when you force insurers  insure sinking ships it just isn’t real insurance. Just a government & crony capitalist hook-up. With no mandate force the purchase of insurance and this as the only deterrent it is unlikely to lower premiums.  You can avoid paying for 5 or 10 years and then pay only a 30% penalty for your knee replacement. This gives young and healthy even more incentive to stay out than under the ACA. Under Dave’s plan policies initially cover reasonably healthy people. Those that can been handled within their Personal Benefits Account (PBA). The rest go to subsidized high risk pools. Because the policies are universal, individually owned, no lifetime limits and non-cancelable, the pre-existing condition problem in time will cease to exist as they either go on medicare ore or sadly pass away.. As the PBA pays the premiums, there can be no lapse problem. People just don’t realize how expensive it is to insurers to sell a policy and put it on the books only to have it lapse shortly thereafter. In the insurance business these costs often equal or exceed the first year premium. As policies are purchased annually this loss doesn’t exist under Dave’s plan. Because of these differences, one can readily see policies  under Dave’s plan would be much cheaper.

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“Healthcare is Complicated”

Donald Trump has declared  Healthcare is Complicated.  Who knew? As the Affordable Care Act (ACA) continues to crumble and Republicans can’t agree on a coherent replacement, a crisis of some sort is in the offing. This is what happens when you ignore health care’s relationship to personal finance and the basic principles of insurance. Suddenly, we are all aware pre-existing conditions is a huge stumbling block. It’s the reef wrecking all the offered solutions. The ACA’s solution was to try to force healthy young people to greatly overpay for health insurance in order to bail out insurance companies forced to insure sinking ships. This violates every principle of insurance.  No wonder the ACA in a death spiral. You’d think the Republicans after eight years would’ve come up with something better, but not these geniuses.  When you have a problem, solve the it without making new and potentially bigger problems. Face up to pre-existing conditions.

Dave’s Plan (series under Dave’s plan to fix the ACA starting in 2014) is the only plan biting the bullet and ultimately eliminating the problem. First of all, covering pre-existing conditions costs money, lots of it.  Expecting young people just starting out in their careers and raising  families to pay for older sick people along with their student loans is let’s face it is insane. The only reason anyone would propose such a noxious solution is the political fact young people don’t vote in the numbers as older people. They forgot people also vote with their dollars and healthy young people didn’t sign up to be screwed under the ACA. Now the political class on both side of the aisle are faced with increasing the penalties on the young if they don’t buy overpriced policies and risking a revolt of the young bringing into question not only the ACA but Social Security and Medicare. They’re burdened with paying for these but they may not be there when they get old.  Millennials are the largest group in our population. Do politicians really want to piss them off and politicize the young? Better to face the problem up front and pay for it directly and eliminate it in the future.

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