23 January 2007

Isn't that nice for you?

At times Nancy Pelosi applauded Bush’s State of the Union words on healthcare. At other applause breaks, she politely rested, a look on her face like that of the Southern lady who answered, “Well isn’t that nice for you?” when the boorish guest said something outlandish.

After all, Bush is nothing if not boorish, and what he proposed on healthcare was outlandish.

That was predictable.

What’s not predictable is what will happen now. Will we all be distracted, as we were in 2005, when Bush rolled out privatizing Social Security?

Congress should ignore Bush’s plan this time. Both he and it are irrelevant when it comes to finding solutions to this country’s problems.

The plan would allow a federal tax deduction of $7,500 for individuals and $15,000 for families who buy health insurance, on their own or through an employer. People who buy more expensive plans would pay income taxes on the excess.

Healthcare policy wonks across America are scratching their heads over the plan giving those deduction amounts ($7,500 or $15,000) to everyone who buys a policy even if it costs far less.

So younger, healthy workers who buy a rock-bottom policy — the equivalent of a liability-only auto policy — will get a tax windfall. Older, less healthy workers pay more.

Evidently the deduction amount will increase over time, but it wouldn’t be pegged to actual changes in healthcare costs.

The plan would also allow states more “flexibility” with their citizens’ share of Medicare and Medicaid dollars

The Treasury Department says that Bush’s plan could bring health insurance to 5 million more Americans, fewer than one in nine of the uninsured.

No word on what it will do to the quality of coverage.

Like the Social Security “reform,” the plan is intended as a diversion from the Iraq fiasco as much as a real policy proposal.

They’re also hoping to divorce employers from the budget-busting business of covering employees — something that has sapped our global competitiveness because of the inefficiencies of our system.

We'll still have the most inefficient system in the industrialized world, with healthcare eating up 16 percent of our GDP and rising fast.

Compare that to countries with universal health coverage, either through a single-payer system or something close to it where healthcare costs are an average of 11 percent of GDP and rising less quickly.

This plan would instead reduce the healthcare people get for our dollars.

The logical reform is to move people from thousands of employer-based risk pools into one, single-payer pool, eliminating the insurance middleman, thereby lowering costs and protecting everyone. This plan would end employer-based insurance by instead dividing us into 300 million individual insurance droplets. Costs will rise and we’ll end up with less healthcare.

How much leverage, after all, will each of us have against premium increases and coverage decreases once we’re completely on our own?

In a perfect conservative think-tank world, the Catastrophic Bush Health Plan might instead play out like this:

Health insurance will become more like home or auto insurance, something for catastrophic events. Sure, you could file for that broken leg but your premiums would skyrocket. And don’t even think about insurance paying for doctor’s check-ups, calls to the advice nurse, physical therapy, or medication. That would be health coverage, not insurance.

Your premiums, which you will pay, not your employer, will, however, cover your catastrophic $250,000 treatment for cancer. (Unless you happened to buy a plan that didn’t cover that. But never mind.)

In this conservative la-la land, costs will go down because people will get less treatment. We’ve been over-utilizing our medical resources because a third party has been paying for them.

No doubt a lot of medical providers will go out of business since they’ll have fewer patients. Oddly enough, that aspect of this paradigm doesn’t get much play from conservative bloggers, pundits or think tanks.

They do like to talk about how costs will also go down because there will be more transparency.

(Never mind that oversight could bring transparency far more easily in a single-payer system.)

You would get a cost printout before treatment for that broken leg, for instance. After learning that the cast alone is costing you $450, you could opt to just stay in bed.

Once the plaster-makers understood that people were refusing to pay their outrageous cast costs, they would lower prices to something more reasonable.

(Never mind those “wink-winks” here between conservatives selling this plan and the businesses providing casts and other medical equipment. The prospect of earning fewer dollars AND selling fewer units isn’t usually a draw at the Chamber of Commerce. Never mind.)

(Also never mind that single-payer healthcare systems negotiating with plaster manufacturers — and pharmaceutical companies — actually have a track record of bringing prices down. In this worldview, that is seen as unfair.)

We’ll all be out there haggling on our own with doctors, nurses, hospitals and all the rest for the best prices we can get.

(Never mind that patients can choose any doctor they want in single-payer systems.)

There’s no incentive for the common good in the plan — no incentive for people to pay that extra $100 for a cancer screening that pays off for public health when millions of people are screened, but feels more like a matter of luck or hypochondria when it’s just you.

If over-utilization is part of rising health costs, bet that speculative screening would be among the first to fall.

There’s also no regulation to guarantee a minimum of coverage or cap profit-taking.
There will have to be an expensive reinsurance addendum for this plan, to cover people who couldn’t get insurance.

The clear winners?

Insurance companies, who could keep raising rates, knowing that the states would cover their firefighters.

The losers?

American families.

Write your legislators and tell them to ignore this catastrophic plan, and get on with the business of solving America’s problems.

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