I had the opportunity to shoot the bull yesterday with my new boss. He's an upper-crust lib, and I'm a working-class conservative (how's that for shaking up the stereotypes?). Yet we agreed on one thing, at least in principle: SOMETHING ought to change about "health care." I know it's supposed to be verboten for a conservative to mention anything other than free-market answers to health care reform, but I'm at the end of my rope with the current system.
First, some diagnosis. Don't tell me that "47 million Americans don't have health care." There may be 47 million who don't have a health insurance policy, but there's nobody who can't go to an emergency room and get treated. The trick is, what they do in the ER isn't free (news flash--nothing is). So the costs of treating those who can't, or won't, buy insurance is passed along to those who do, and that makes health insurance much more expensive. Indeed, many of the people who don't have health insurance are not the very poor (who have medicaid). It's the non-poor who find the cost of what's out there prohibitive.
Another thing that makes health insurance crazily expensive is the fact that it's not REALLY insurance, at all. Insurance is sharing the risk of a potential catastrophe. Your house is likely NOT going to burn down. But some small percentage of houses will. If we divide the risk of that happening among the right number of houses, as determined by the actuaries with slide-rules, and add a few bucks to each bill to provide profit to the insurance company and the agent who services the policy, that amounts to a genuine insurance policy. You hope you never have a claim, but the relatively small premium is a smart thing to pay. But if a house were already burning, that would jack the premium up to the cost of the house! Likewise health insurance. You can insure against hospitalization, serious injury, cancer, or a variety of other relatively unlikely events. But when we demand that every physical, well-child-checkup, and tylenol be paid for through our insurance, the company is going to have to charge us for all of that guaranteed cost ON TOP of the shared risk of the unexpected.
Then there's the role played by employers. My employer pays for my insurance (I have to pay for dependents). If I were single, I wouldn't have any incentive to care what it cost them. So I'm free to demand a cadillac plan. Of course, if you think about it, whatever your employer pays for health insurance could go straight to your salary if they made you buy it yourself. So it still affects my bottom line. But most of us with company benefits persist in the illusion that our health care costs are cheap or free.
On the other hand, those who buy their own policy (or have to pay through the nose for dependent coverage) have to make a decision based on opportunity cost. Paying several hundred to a thousand or more dollars a month for insurance directly impacts where you can live, what you can drive, how much you can spend on gas and groceries. For the healthy person, it's arguably smarter to pay your own way at the doc-in-the-box for routine stuff and take your chances on the more rare losses, knowing that no hospital is going to let you die anyway.
So, what to do about all of that? I think the biggest trick is to see to it that everybody has (and pays at least something for) a major medical plan with a high deductible, sort of like the "minimum limits" on your car policy. I don't care if this is done privately or publicly in the long run, or in combination somehow. But expanding the pool of the minimally insured is a good start. This can't be a cadillac policy--I envision something similar to the plans that go with the current HSA accounts--maybe $2500 deductible, 100% thereafter. If everybody had this, the larger pool would mean pretty low costs relative to what we have now. Care under such a plan would be somewhat rationed, in the sense that these things would likely not pay for Lasik and boob jobs. But lack of access to a 38DD is not a health care crisis. And besides, what we have now is rationed--a buddy of mine who pays a gazillion dollars a month for blue cross just found out his plan won't cover lap band weight loss surgery.
Of course, what to do about first-dollar care is the hard part. Here's a novel idea: how about pay your own way? Sure, if you'd like to pay somebody $500 a month so they can dole $5000 in annual costs back to you for low copays and still make a profit, I'm sure somebody will oblige you. But if you didn't have to pay the $500, you could pay a little a couple of times a year for a medical exam, or a doc visit, or a prescription. If you hit your deductible, it would be covered by the major medical plan. What a thought--people might even choose less-expensive options than they now do if it actually hit them in the pocketbook!
Perfect? No. Full of details? Not so much, but neither is Hillarycare 2.0. Discuss amongst yourselves and comment.