Saturday, December 22, 2007

Health care premiums: at least level the playing field


California certainly has upped the ante in the health care debate this week (California ups the stakes on everything) with a bill, even larger than a comparable one in Massachusetts, to require mandatory health insurance, provide assistance to individuals who cannot afford it, and mandate employer coverage. This expands upon the general concepts articulated by Hillary Clinton (who generally is not quite ready to make coverage mandatory but wants to pressure employers and insurance companies), and Republican (or republicrat) governor Arnold Schwarzenegger (who is not exactly staying out of tinseltown) is selling it. The Economist article from Dec. 19, 2007 is “Scalpel, please: California enters the fight for universal health care,” here.

The Washington Post this morning (Dec. 22) had moderato kind words for a plan by Republican John McCain, in an editorial titled “The McCain Prescription: The GOP candidate has some good ideas on health care, but not the whole answer,” here.

McCain proposes a refundable tax credit of $2500 per individual and $5000 per family to purchase health insurance. This levels the playing field in two rational ways: first, individuals get the to use the same pre-tax dollars that employers do, and tax credits help those who otherwise have no income taxes or who do not itemize deductions (as when they don’t own homes). It makes sense, as does a policy that encourages younger workers to set aside pre-tax dollars in health spending accounts.

As the Post points out, there are still serious questions about controlling costs, and protecting those who experience catastrophic illness. One measure will be to prevent insurance companies from penalizing pre-existing conditions, even if there needs to be government-backed reinsurance to cover this problem. (Imagine, though, the rating companies getting involved.) Another is to control the “fee for service” way of billing Medicare, and bundle the way care is paid for (a concept that is tricky to program in IT systems; I once saw this done with the SAS language). Still another problem haunts preventive care, and especially dental care: economic pressures to sell as many services to patients to stay in business, as professor David Callahan wrote in his 2004 book “The Cheating Culture.”

CNN has a harrowing story about the insurance companies (in this case, Cigna in California) with "experimental" procedures that are likely to work in particular cases, " Teen dies hours after liver transplant approved," here. The Democrats maintain that insurance companies have too much control over life and death, violating our tradition of respect for life.

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