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The most appropriate response to today’s health care system woes is neither a single-payer bureaucracy nor a head-in-the-sand refusal to see a problem. Here are 5 rational proposals to improve health care access and reduce costs.by Tully
(libertarian)
Friday, July 17, 2009
President Obama has launched his Class Warfare Health Policy Initiative. Economists, many Caregivers, and non-Socialists are understandably aghast at the proposal to spend over a trillion dollars, tax the “rich” at 45%, and let loose a system of bureaucracy-controlled health care services. But we need to do more than yell “NO!” We need to acknowledge the problems that do exist; propose solutions that address the problem; and do so within a context that has broad political support from the ideological ‘middle’ of the country.
With that in mind, I suggest the following parameters:
1) First, we must acknowledge that there *is* a problem in terms of affordable access to health care for many Americans. With 10% of the Labor Force out of work (and youth, stay-at-home parents, part-time workers, the disabled, many immigrants and the homeless are NOT included in the figure), estimates range from 30 to 50 million Americans living without health insurance. That means somewhere between 10% and 15% of Americans.
2) It has been demonstrated that those with a lack of access to health care delay treatment until their conditions require critical (and far more costly) attention. This adds to the expenses Providers incur (and often absorb) and the strain on existing government programs (and thus, increase cost to taxpayers).
3) We must agree that compassion and the political climate both dictate that a, “hell, tough on them!” approach is not an acceptable response.
4) Having said that, the solutions must address the problem. At my office (an Academic institution), one often hears people singing the praises of a Single Payer System. They frame the problem as the ‘lack of a single payer system.’ However, this response falls apart when weighed rationally. If 85% of Americans had affordable access to supermarket food, and 15% were lacking basic nutrition, we would never suggest that all 100% of the country have access to free food at the supermarket, with the bill sent to The Government. We all know intuitively that the result would be a run on food, a shortage of goods in the supermarket, wasted resources, and a broke country. And yet, that is precisely what the Single Payer Cheerleaders want for health care. If the problem is access for 15% of Americans, than the solution is a way to find access for 15% of Americans.
5) Insurance is both a blessing and a curse: it allows people to access health care (the blessing), but also permits non-emergency situations to crowd hospitals and ER rooms with unncessary service, as consumers receive thousands of dollars worth of treatment for a small copay of $10, $25, or $50. True Health Care Reform must acknowledge objective, observable economic realities and not be bases on some hand-holding kumbaya approach to human nature.
6) The provision of care must be centered on the Doctor-Patient relationship, NOT on insurers’ profits or government bureaucracies “one-sized-fits-all” approach of form and process and procedure and approval.
7) We must acknowldge that the American health care system is the best in the world, bar none. Those who point to Canada forget that there is not a single modern machine in Canada capable of removing kidney stones. Those who trumpet Britain forget that Britain has closed 40% of her hospital beds since the 1940 NHS was enacted. Those who point to Scandinavia forget that it is the American doctors who win the Noebel prizes, the American researchers who have made all the modern major medical breakthroughs in the last century, and it is America that attracts doctors from all over the world.
So..in a nutshell: we need a system that helps those without affordable access to gain that access, in a way that protects and enhances the doctor-patient relationship, lowers costs to consumers and providers, and continues to support a profitable – and successful – health industry.
With all of those as ‘context,’ here are my 5 Proposals:
1) Permit community groups to form for the purpose of buying health insurance. Sounds simple, isn’t it? But it’s illegal. Individuals can *not,* under existing law, form ‘groups’ whose primary purpose is purchasing insurance. (Groups may form for business or fraternalh purposes, and then choose to buy insurance as an incidental benefit, but they can not form for no other reason than to buy insurance). End this prohibition, let the market dictate rates, let competition ensue, and there will be no need for a Federal Government-related Insurance Bureaucracy. Take it one step further: end State Monopolies on insurers. The Federal Government (not States) has the authority to regulate Interstate Commerce, and since people may have an accident *anywhere* and request their insurer to cover it, this is clearly federal jurisdiction. Blow open the lid on Insurer Competition.
2) Enact Tort and Medical Malpractice Reform NOW. It was reported 5 years ago that an OB-GYN doctor in Massachusetts has to deliver EIGHTY-FIVE babies just to cover his malpractice insurance premiums for a year. Worse, 5% of doctors are responsible for 95% of malpractice claims, raising all doctor’s and hopistal’s premiums. Limit Malpractice Awards, raise the negligence standards (so hospitals dont need to run unnecessary tests), and relieve the 95% of decent doctors from paying the premiums of the 5% convicted of malpractice.
3) Eliminate the FDA’s requirements that drugs be safe AND EFFICACIOUS. Currently, the FDA requires that pharmaceutical companies prove that their drugs meet two tests: they must prove safe, and they must be ‘efficacious,’ that is, they must be proven to cure the condition they claim to address in virtually 100% of patients. This is a costly and unnecessary test: Many people react differntly to different substances. The Peanut Butter that fed me through high school will kill someone with an allergy. Let *Doctors* decide what to prescribe, with the understanding that the idiosyncracies of individuals means that results WILL be different with different drugs. A drug that doesnt work, will not be prescribed. On the other hand, if a doctor determines that medical marajuana is more efficacious and cost-effective than morphine, so be it. Eliminate tiered coverage that allows Insurers to cease to cover necessary, but expensive, pharmaceuticals.
4) Engage in Multi-national agreements with other nations to accept their pharmaceuticals. The refusal of the US FDA to permit the importation of Canadian pharmaceuticals is insane. An individual can come to the US from France, or Britain, or Mali, or India, and providing only a driver’s license from their own nation, get behind the wheel of a 6,000 pound rental car and take off minutes after landing – even if they don’t speak English or have never driven on the right side of the road. And yet, if a pharmaceutical company goes through hundreds of thousands of tests in Germany, or Britain, or Canada, the results are not considered ‘valid’ in the US. Now, realistically, which is more dangerous: the driver, or a drug produced in Canada?
5) Permit every American to have a Medical Savings Account. Currently, Government workers and some self-employed people can utilize a Medical Savings Account which permits them to cover medical costs using a credit-card-like card. These citizens have a certain amount of money deducted from their paychecks, and go into an account for medical expenses: prescription drugs, eyeglasses, dental work, and even over the counter remedies. These deductions are pre-tax, meaning it lowers the person’s gross income, lowering their tax and even possibly dropping them into a lower tax bracket. Better yet, these workers can ‘borrow’ against future deductions if they incur expenses early in the year at no interest expense. If government workers are allowed these accounts, why not ALL Americans?
These proposals will not solve all of our problems, but they will go a long way to providing access for those who do not have it, lowering costs for everybody, and enhancing the doctor-patient relationship.
Assured – Those insured under the terms of an insurance policy.
Benefit – The money paid to the policyholder when a claim is made.
Bid Price – The selling price or cash-in value of your unit holdings.
Bonus – Relates to a with-profits policy. The amount of money added to the benefit payable under the policy. The amount is dependent upon the profits made by the insurance company. Added bonuses cannot be taken away.
Convertible Term Assurance – A term insurance policy which gives you the option to convert your current policy to a whole-life or endowment insurance policy, without having to take further medical examinations.
Critical Illness Insurance – A policy that pays out a lump sum on the diagnosis of life threatening illnesses indicated in the terms of the plan.
Decreasing Term – A form of term life insurance where the death benefit decreases each year as per your policy. Premiums remain level. This type of certificate is frequently sold as mortgage insurance. There is no surrender value for this policy.
Endowment Insurance – An insurance policy that pays a stated amount at the end of a specified period or upon the death of the insured if it occurs within that period.
Family Income Benefit – Term assurance which pays money to the life assured’s dependants for a set period, rather than paying a lump sum.
Guaranteed Bond – A bond in which principal and interest are guaranteed by an entity other than the issuer. Guaranteed Bonds can be income or growth.
Increasing Term – The cover and the amount you pay into the policy are increased by a specific percentage each year calculated on the original sum insured. Designed as a way to increase your life cover as your earnings increase.
Investment Bond – Combines investment with some life cover. The payments you make into an insurance policy or investment bond, usually a lump sum, are invested in the insurance company’s with-profits or unit-linked funds (Life Funds). Different types of bonds include the guaranteed bond and unit-linked single premium bond. Not to be confused with a company or government bond, an investment that offers a fixed rate of interest and an area where your chosen Life Funds may be invested.
Life Fund – This usually refers to Unit linked Investment Funds. These are funds run by Life Assurance or Pension Companies. Such funds are used for individuals holding life assurance policies to invest in. The assets held within the fund are divided into a number of units. When an investor contributes to a Life Fund, units are allocated to investors in proportion to their investment.
Maturity – An agreed date when an endowment policy ends and the proceeds, including any bonuses, are payable.
Mutual – A life insurance company that is owned by its with-profits policyholders.
Offer Price – The price at which fund units are bought.
Premium – The amount of money paid into an insurance policy.
Proprietary – A life insurance company that issues its profits to its shareholders.
Qualifying Policy – A life assurance based savings plan that has to be written for a minimum of 10 years and must fulfil certain qualifying policy criteria to ensure the final payout is tax free.
Renewable Term – Term Insurance that may be renewed for another term without evidence of insurability.
Single Premium Policy – Where a single lump sum is paid for an insurance policy.
Sum Insured – The amount of money that is guaranteed to be paid under an insurance policy, before any bonuses are added.
Surrender Value – Not applicable to all life insurance policies. The amount that an insurance policyholder is entitled to receive when he or she discontinues coverage
Term Insurance – Provides policyholder with protection only. Life insurance payable to a beneficiary only when an insured dies within a specified number of years (the term). If you live beyond the term you do not receive any payment. This is thought to be the cheapest type of insurance.
Terminal Bonus – This is an extra bonus determined when a death or maturity claim is paid. Terminal bonus is often only paid if the policy has been in-force for a minimum number of years at claim time. The amount is dependent upon the profits made by the insurance company.
Unitised With Profits Fund – Also known as a Unit-Linked With Profits Fund. A type of Life Fund that can invest in UK and overseas shares, property, fixed interest securities and cash. When you invest in this fund through an insurance policy, you buy ‘units’. When an annual bonus is declared, you can either receive more units or it is added to the unit price on a daily basis. Due to the addition of bonuses the unit price does not reflect the value of the underlying investments.
Unit-Linked – Also called Unitised. If your insurance policy is unit-linked, some of your money is used to purchase ‘units’ in a fund. The value of your policy at maturity is dependent upon the growth of the fund in which the policy is invested. Generally refers to policies that offer protection and saving such as endowment insurance, whole life insurance and investment bonds.
Unit-Linked Single Premium Bond – A single lump sum life insurance policy where your investment is spread over a number of Life Funds.
Whole Life Insurance – Whole life insurance provides a death benefit for the policyholder as it builds up cash value. The policy remains in force for the lifetime of the insured, as long as premiums are paid according to the policy agreement. You can choose insurance that pays out on death a guaranteed sum only, the sum plus any bonuses that have been added, or the sum plus any additional value from the growth of the funds invested in.
Without Profits – When a policy reaches maturity or the policyholder dies, the amount paid out is the basic guaranteed sum only. You would not be entitled to any bonuses.
With Profits – Relates to insurance policies that combine investment with protection. This type of policy is entitled to a share of the profits made by the insurance company. Premiums are invested in the with profit fund, reversionary bonuses are applied usually on an annual basis which reflect the investment growth of the fund assets. On death and/or maturity a further terminal bonus might be applied to the fund value.
With Profits Bond – An insurance policy where your lump sum is in most cases invested in a Unitised With Profits Fund (which is listed under the Life Funds section).
About the Author
First Hand Insurance are Life Insurance (http://www.firsthandinsurance.com/Life-Insurance.php) and House Insurance (http://www.firsthandinsurance.com/House-Insurance.php) specialists in the UK.This article comes with reprint rights. Feel free to reprint and distribute as you like. All that we ask is that you do not make any changes, that this resource text is include, and that the link above is intact.
Article source:
Insurance Glossary of Terms
http://www.contentdragon.com/content/finance/insurance-glossary-of-terms/
