Urgent Care by Minda Wilson: September 2017

In the recent weeks,
Republicans and Democrats have again put their hat into the ring that is healthcare reform. Republicans still want to honor their promise to repeal and replace. Democrats want to protect their legacy. Since neither plan considers affordability, either way, the people will suffer.

Republicans have revised their plan in hope that they can get something passed before the end of the month. If this happens, they will avoid having to start all over and create a new bill. Their plan replaces tax subsidies; instead of the government paying money directly to insurance companies they will make payments to the states in the form of block grants. People would be able to increase their contribution levels to Health Savings Accounts and other pre-tax benefits. The states would use the money to subsidize their own health plans. The penalties for uninsured individuals who are uninsured as well as corporations who do not offer insurance would be eliminated. Limits would be placed on Medicaid spending. And, hard to believe, the repeal of the medical device tax, which has been on the agenda since day one, is also on the table.

With no federal programs in place, the states will have to create their own. Since health insurance is still controlled at the state level, this would not make significant changes in the markets. The financial and other safeguards that were put in place, i.e. no preexisting conditions, no higher premiums for older adults, would be determined at the state levels. With subsidies gone, and if the federal government continues to limit payments to the states for Medicaid and other programs, it is likely the level of care available will be affected. Each state would decide who would be protected and how. Just like it was before Obamacare.

All these changes do nothing to control the cost of insurance. Insurance companies can still charge whatever they want. It is still up to each state’s Department of Insurance to set prices; and, so far, these institutions have done nothing to control runaway insurance premium costs. The Democratic answer seems to be Bernie Sanders’ latest proposal “Medicare for All!”. The first problem is that the government actually pays for very limited coverage, Parts A and Part B only. The rest is covered only if seniors purchase supplemental insurance.

Senator Sanders’ own state adopted such a single-payer plan. It lasted less than a year. When Vermonters found out that to keep the program going without filing bankruptcy they would have to raise their state income tax payments from 14% of income to 24% of income, they chose to abandon the program.

Paying out an additional ten percent of one’s income proved too much a disincentive for Vermont’s citizens. That is in a state with relatively few illegals, a relatively healthy population, and low healthcare costs. You can imagine the financial impact such a plan would have on a national scale. A 10 percent increase would be nothing when you start adding in the cost of illegals, the underinsured, etc.

The solution to all of this is rather simple. If health insurance is treated like a utility, we can regulate the money that comes in and make sure that money is used to pay for medical expenses instead of health insurance oversight, review and administration. Maybe if the legislation focused on that, we might get somewhere.