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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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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Imagine politicians in the coming months offering various pieces of legislation to accomplish the following:

1. Provide healthcare for everyone costing no more than what has already been authorized
2. Connect  everyone to a financial institution
3. Relieve Healthcare providers of credit risk
4. Eliminate the vast majority  of Medical Paperwork
5. Allow medical providers to concentrate on medicine
6. Increase mobility of our citizens
7. Provide easy comparison of potential employers’ compensation offers
8. Level the playing field for attracting employees between Large and small business
9. Give workers more leverage in dealing with employers
10. Put US employers on the same cost basis as Foreign Companies with National Healthcare
11. Bring all people into the our Capitalist system from birth
12. Provide everyone with foolproof ID
13. Eliminate the employment of illegal emigrants
14. Introduce competition in every phase of healthcare
15. Allow for the widest latitude for innovation in all things medical
16. Increase national savings
17. Improve everyone’s retirement prospects

Sounds like a Paul Ryan type legislative agenda or a Party Platform. The truth is this is all done with one bill creating Personal Benefits Accounts (PBA) for everyone. We introduced this concept in Dave’s Plan to Reform the Affordable Care Act back on October 18,2014. The whole series can be accessed under Dave’s Healthcare Plan. Foreseeing the ultimate failure of Affordable Care Act (ACA) we put forth a plan reuniting healthcare and savings in a workable plan. We have come to realize PBA could provide an underpinning for all individuals to enhance their lives. Ultimately, isn’t this Government’s primary function? Continue reading →

While people might agree that “Dave’s Plan” to replace Obama care would cost no more than per capita while actually giving the best incentives to obtain the lowest costs in the future, the one criticism we keep hearing is that the plan raises corporate taxes.  Well, this is partially right.  For those corporations that provide health insurance, it could easily increase their payments to the IRS.  How does this work?  Let’s say a potential employee is deemed to be worth a cost of $60,000 to the corporation, a large established corporation could offer a package of a $50,00 Salary plus healthcare worth $10,000.  By separating out healthcare saves the corporation $620 in payroll taxes they would have to pay than if the $10,000 was just added to salary.  Further payroll taxes have to be paid whether the company makes money or not.  Administration costs spread over a large number of employees are minimal, while size gives them a strong bargaining position to get the best deal on health insurance or even self insure.

A small business is in the opposite position.  The cost of insurance and administration are higher.  In some cases much higher.  Because of this they might not offer to cover employees, choosing instead to pay higher salaries instead.  But to compete to for the same employee they would have to pay more to give that employee the same value while paying more in payroll taxes.  In effect this gives big business a government subsidized competitive advantage in the race for the best employees.  No wonder they like the present system.  However, do we really want to keep the generators of most of our future progress and jobs at a disadvantage?

“Dave’s Plan” would level the playing by getting rid of this crony capitalism leftover from World War II.  A good trade-off  for the change would be to lower all corporate taxes to a level competitive with Ireland and Canada which help all corporations and the economy.   (For people new to Detour the series on “Dave’s Plan” begins under Policy in October of ’14)