Now that both the Democratic and Republican healthcare insurance plans have failed (or, in the case of Obamacare, about to fail), it is time for Congressional members of both parties to get together and start over at square one.
This can only work if, on this life and death issue at least, ideological blinders are removed and partisan gamesmanship is put aside. Let us use what we have learned from the two failed plans and objectively look for a solution.
First, let us establish the goals we should reach:
1. Everyone, both Republican and Democrat, alike — agrees that the primary goal is affordable health insurance for all. We are also agreed that people should be free to choose their doctor and medical decisions should be made just between doctor and patient with no outside interference.
2. In addition, the goal should include complete coverage — the whole body — and also prescription drugs. Some proposals have suggested that maternity care, mental healthcare, and dental care not be included. If someone proposed that some parts of the body, such as the prostate, the heart and the lungs, not be included, that would be considered unacceptable. But somehow excluding female reproductive organs, the brain, and the teeth are acceptable.
Failures of the ObamaCare and Ryan plans to reach these goals:
1. We need to realize that a substantial part of both of the ObamaCare and the Ryan plans do not meet the first of the goals. About half of those covered by both plans get their health insurance through their employers.
This gives the employee no choice; it is the employer who chooses the policy. And, there is no private doctor-patient relationship; medical decisions are made by a trio — doctor, patient, and an insurance company bureaucrat.
As for choice of doctors, some insurance plans have a limited network of doctors; patients must choose among them unless they pay a penalty. Also, some doctors will not accept patients who have policies from certain health insurance companies because they do not pay well enough.
2. ObamaCare is failing mainly because not enough people participate. Insurance companies need a large pool of subscribers so that risk is shared.
Things we need to consider:
1. We have many able-bodied citizens who could afford to purchase insurance, especially younger people, who do not buy insurance. These are free-loaders. When they do get sick (and some will get sick), emergency rooms must take them according to the Emergency Medical Treatment and Labor Act. Who pays for that care?
2. We need to realize that using the free market, supply-demand, model does not work in the case of health insurance. Demand for healthcare is inelastic; if price goes up, demand remains constant. People cannot do without healthcare unless they are willing to suffer or even die, so insurance companies can raise prices without worrying about losing business.
Some assume that if insurance companies compete in a market, consumer costs will go down. Experience with the Obamacare markets has shown that this does not happen. Companies offer lower premiums by offering inferior products and/or by requiring an insurmountable deductible.
Also, insurance companies’ costs go up when they do not have large pools of purchasers to spread the risk. If the risk pool is too small, the company simply leaves the market.
Costs to taxpayers and to the economy of the present plans.
1. Government subsidies or tax credits to make healthcare insurance affordable to lower income people.
2. American producers are at a comparative disadvantage when competing with foreign producers who are not burdened with paying for their employees’ health insurance.
3. Productivity is diminished when workers are too sick to work.
4. Since demand for healthcare is inelastic, insurance companies are able to set price.
5. Quite a lot of the money that is spent on premiums goes to pay shareholders.
6. Taxpayers and premium payers pay for the very expensive emergency room care of those who have not bothered to get insurance.
7. Preventative medicine can catch diseases at the early stages and save the cost of more expensive procedures later (and also save lives). Private insurance usually does not provide for this.
8. Medicaid is a burden not only on federal taxpayers but also state taxpayers.
After considering all these factors, in order to reach the goals set out at the beginning, one would have to conclude that Medicare for All is the solution. It would have the largest pool possible, prices would be established, not by the inelastic market, but by bargaining with doctors, hospitals and pharmaceuticals. People would have a choice of doctors and no bureaucrat would interfere with the doctor-patient relation.
Everyone would be covered and contributing so there would be no free-loaders. Businesses would be relieved of the burden of paying for health insurance for employees and thus could compete with overseas business on a level playing field. With fewer workers chronically ill, productivity would increase.
Preventative medicine would be included. There would be no shareholders to take premium dollars away from providing healthcare. Emergency rooms would not be overflowing, and Medicaid could be folded into Medicare.
I realize that this proposal is a non-starter for most Republicans, but there may some Republicans who would see their way clear to support it. It could work to their advantage if they want re-election in 2018. Let me explain.
We know that healthcare is a hot issue. In 2010, it brought out large, angry crowds at Democratic congressman’s town halls. These crowds were vehemently opposed to Obamacare (at least the Obamacare that had been presented to them on TV).
But, in these crowds could be heard people shouting “don’t take away my Medicare.” Recently, Republican town halls have brought out crowds that, now that they have experienced it, are very concerned that Obamacare will be taken away.
A great number of people have experience with Medicare either themselves or through family and friends. It is well liked and works well. Any congressman who extends this benefit to everyone will be a hero with a Teflon coating that will protect them from attacks by opponents. And, we have learned that large crowds at Congressmen’s town halls are precursors to a wave election.
Saving money and balancing budgets.
Furthermore, major aspects of Medicare for All should appeal to Republicans. It would save money. Medicare and Medicaid would be folded into one national healthcare system with its own budget. Medicaid and Medicare would no longer be in state and federal budgets, thus making them easier to balance.
Taxpayer’s dollars that are now used to subsidize Medicare and Medicaid would be kept by the taxpayer and used to help pay premiums on the national health plan — a plan that would cost a lot less.
Finally, there are those, primarily Republicans, who believe that government is inherently inefficient. But the Congressional Budget Office (CBO) has found that the administrative cost of government-run Medicare is less than 2 percent whereas the administrative costs for the privately run Medicare Advantage is 11 percent.
With this plan, each person, young and old, rich and poor, would have their own full coverage, low deductible, insurance. All they would have to do is show a proof of purchase card (like the current Medicare card) to receive care from any doctor they choose and any hospital.
David RePass is professor emeritus, University of Connecticut, who specializes in elections and electoral behavior. He has published in The American Political Science Review, the online journal The Forum and an op-ed in The New York Times.
The views of contributors are their own and are not the views of The Hill.
Here’s what we can do to fix our current healthcare mess