Monday, September 23, 2019

Healthcare Deal Possible with Compromise

No topic has drawn more discussion or scrutiny than the nations Health Insurance crisis!

Notice I did not say, "health care" crisis. Why should I? We already have the finest health care in the world!The issue is with insurance.

The "Affordable Health Care Act," AKA Obamacare, brought more people into the family. But, it fell woefully short of it's goal. There are entirely too many people still not covered. Many have watched their premiums skyrocket, their deductibles jump ridiculously.

There are winners and losers with Obamacare.

I know a family of three, previously not covered, that qualified for better than $20,000 in free health care. Not a cent out of their pocket! Another family of four, watched their deductibles climb to $5000, their monthly premium shoot from $400 during W's last year in office to more than $900 in 2016.

I recall hearing from this woman, a part time Realtor for Keller Williams singing "hey, hey the witch is dead. Which ole witch, the wicked witch." You recall that iconic song from the Wizard of Oz. She was singing it the day after Hillary Clinton's defeat.

Trump's plan ran off the rails, thanks in part to John McCain. The newly elected President never was in sync with then Speaker, Paul Ryan. In retrospect, he would have been better off tabling health care until after the tax swap.

One problem is that we are paying entirely too much for pharmaceuticals. Even worse, is that many of our political leaders are receiving monetary help from "big Pharm." Nobody likes to bite the hand that feeds them. Unfortunately, it opens the door for corruption. Herein lies the dilemma.

Bernie Sanders and Elizabeth Warren advance their aspiration for "Medicare for all." In theory, we do have a rich nation and probably can afford to provide something for everyone. But, there will be conditions. And restrictions. Neither Warren or Sanders want to go there.

So, we are back to square one. Is there some middle ground here? And could this middle ground be found that utilized capitalism and the free market to bring the cost of good healthcare to affordable levels?

Maybe. But, it would require a compromise. Any real compromise will result in neither party being totally happy. That's why they call it a compromise. So here goes! And, I guarantee you! Neither Republican or Democrat will be overly thrilled...

The starting point is "pre-existing conditions." All of the Democrats and the majority of Republicans are together on the need to protect Americans with pre-existing conditions.

The watchwords are "it could be me." For those who have faced insurance companies and been doomed to impossible costs know! Half of the bankruptcies in America are Medical BK's.

This brings us to the proposal: "What IF we designated a national sales tax, perhaps as little a "on-fourth of one cent," and used it to establish a "Catastrophic pool." The "pool" would be unavailable until an annual claim reached $10,000. It could be one claim, or cumulative claims.

Upon reaching $10,000, "80% of subsequent claims total would be covered," leaving the insured with a "20% co-pay." This would climb to 85%, when an annual claim/claims reached $50,000 and cap at 90% when the claim/claims hit $100,000.

So total cumulative claims of $13,800 would qualify for $3,040 from the Catastrophic pool. $65000 in annual cumulative claims would yield $44,750 from the pool.

We currently have 1300 insurance companies nationwide. This number would increase dramatically. The consumer would be allowed to cross state lines, as they do with auto insurance. "Aflac like" companies selling inexpensive "Cat Pool" supplemental policies would appear overnight.

I can hear the moans and groans from both sides!

Democrats will say(correctly) that this was a "regressive tax." Proportionally, "more of the burden will fall upon the poor."

Republicans will say(correctly) that "this is universal health care." Besides! "Can we trust the federal government with such a money pot?"

All concerns are valid. Let's address the last one first. Clearly noted stipulations prohibiting any Cat-Pool monies drawn out for other needs would be an imperative! In other words, "no borrowing from Peter to pay Paul!"

Regarding the "regressive tax on the poor" argument, remember this: The poor will still be buying beer, cigarettes and eating at McDonalds! So if a Big Mac, French fries, a pie and a milkshake, come to $10, the buyer will have contributed 2.5 cents to the pool.
Smart money says, "they won't miss it!"

Meanwhile, new insurance companies will be popping up all over the place! For the typical American family seeking a "80-20 co-pay featuring a $500 deductible for $150 per month," they'll be in luck! A family in Waynesville, North Carolina might ultimately contract with Sun Valley Health Insurance of Pocatello, Idaho. But so what? It's about shopping for the best deal.

This would be possible BECAUSE the "Cat-Pool" will serve as a backstop in the event of a large claim. So the small Idaho based company can offer inexpensive policies to middle class American families, without the worry of a few large claims putting them out of business.

Americans with pre-existing conditions would have protection. There would be companies offering not so good deals to cover the first $10,000. And, there would always be the option to self insure. Especially if the insured was a Cancer survivor, was
taking nitroglycerine or something equated with high risk.

Of course, there will be losers. The large insurance companies will ultimately become reinsurance companies, working on a lower margin. I recall a Blue Cross-Blue Shield representative in Indianapolis telling me that their profit margin was something around 12%. That's pretty lucrative!

What about the Pharmaceutical companies? Why ARE we paying damn near twice as much as the rest of the world?

Hate Trump or love him, he IS trying to address this problem. Democrats need to join him. Forget about who gets credit! We need this to happen and happen now!

Would "1/4 of a penny" tax be enough? Not certain. But, it would be a starting point.

Bottom line with this idea is, "Republicans could say that they drastically lowered health care costs for all Americans including those with pre-existing conditions." Democrats could accurately attest to the fact that they delivered on their goal of "Universal Health Care" for all of the country.

In the end, not perfect but fair.

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