As some of you probably know, I am a Canadian citizen and have lived most of my life in Canada. I moved to the United States about a year and half ago. I now live in St. Louis and am privileged to be working at the Federal Reserve Bank of St. Louis. The Fed, incidentally, offers what I think is an excellent health benefits package. And so far, I have been mightily impressed with the health care services provided at Barnes Jewish Hospital. I am fortunate.
When I first moved here, I did not know too much about how health coverage worked in the U.S. Heck, I am still not entirely sure what to believe. I have some vague recollection of hearing stories about poor Americans being denied access to critical care, just because they could not afford it. I wonder whether this can possibly be true.
Here is an excerpt from Paul Krugman's piece "A Tale of Two Moralities:"
And here is Kevin Horrigan, a columnist in St. Louis with his article today: "A Commodity or a Right?"
Personally, I cannot say for sure one way or the other. My inclination is to doubt these claims (which is not to deny the existence of many other problems associated with healthcare). But the evidence supporting my view is mainly anecdotal.
When I first got to the bank, I became friends with one of the janitorial staff at the gym. We got to talking and I learned that she had at one time needed a lung operation. Evidently, she was poor and uninsured at the time. She is now healthly as a horse. I'll let you fill in the blanks.
Shortly after that, I attended a lecture by Steve Lipstein, CEO and president of Barnes Jewish Hospital (and Chairman of the Board of the St. Louis Fed). The talk, as far as I can remember, was largely devoted to espousing the virtues of the Obamacare legislation. In his talk, he made a remark that made my jaw drop to the table. He told the audience that Barnes-Jewish does not turn anyone way; they do not ask whether people have insurance...they do not even ask if they are American citizens. I would like to believe that this is true at all U.S. hospitals, but perhaps it is not.
So it seems to me, though I stand corrected if wrong, that the U.S. already has universal health care coverage. Of course, when the uninsured go for treatment, someone has to pay for it. That someone, it appears, is the rest of us who regularly make insurance premiums (this is another point made by Lipstein in his talk). In other words, the U.S. already has a system whereby the "rich" subsidize the insurance and health costs of the "poor."
Of course, recognizing this (if it is even true) is not the same thing as claiming that the current system is any good or in no need of reform. I found this article by Randall Hoven quite interesting: "A Conservative Case for Universal Health Coverage."
The impression I am forming is that the healthcare debate has more to do with insurance than it does with healthcare availability. It appears to be a quirk of the American system that health insurance is tied to your employer. So, if you lose your job, and suddenly become sick (afflicted by a pre-existing condition), you may suddenly find yourself uninsurable. You will still have access to healthcare, of course--that is not the issue (even if liberals like Krugman and Horrigan would like us to believe this to be the case). But if you have any assets, you will have to use these assets to pay for your healthcare. This can be a terrible hardship and, evidently, is a major cause of personal bankruptcies in the U.S. Of course, if you are poor, you have no assets and so this does not apply.
So I am wondering: Have I got this just about right? If I have missed the boat on this one, please set me straight.
Update: February 10, 2011
One of my readers sent me something that I thought was too good not to bring to the forefront here. The author goes by the name of "o.jeff," in case that means anything to you.
A Simple Health Care Financing System (by o.jeff)
* Each person is required to put 15% of his or her income into a health savings account.
* All health care spending comes from this account.
* If a charge to your health care account is larger than your balance, then your account balance goes negative. This is effectively a federal health care loan.
* When your account balance is negative, 20% of your income is deducted from your income until your account balance is positive again.
* The money in this account is your money. When you die, any positive balance is passed on in your estate. If you have a negative balance, your assets must first pay off any negative balance in your health care account.
* If you have insufficient assets to pay off your negative balance at death, then the balance is "written off."
Additional points:
* This program replaces all government health care programs, including Medicare and Medicaid. The taxes for these programs would be eliminated.
* Most employers would probably stop offering health insurance as a job benefit. This would free every private employer of this burden and the cost it levies on them. This makes U.S. businesses more competitive.
* The payment for health care services would be immediate and swift--like using a credit card at Wal-Mart. However, providers would be required to retain records about the transaction for a period of time to allow audits for fraud.
* All of the people who are presently employed in medical offices and hospitals to fight insurance companies could be repurposed into actually providing health care services. An enormous gain in productivity.
* People would largely be spending their own money, and thus, they will be more careful about how it is spent. (With today's third party payment of medical expenses, there is little reason for a person to try to spend less.)
* Doctors might get tired of answering the question "How much does this cost?" but the question will be coming from their patient, right in front of them, rather than some nameless guy at an insurance company.
* Cost shifting already happens when non-insured/indigent go to a hospital for treatment. This plan simply makes it very transparent. These people will carry a negative balance funded by all of us. The hospitals would not have to cost shift, and so their prices should become more reasonable immediately.
* The health savings account would be for legitimate health care spending only. Fraud would be very strictly punished--both on the side of the provider and consumer.
* Health care products and services typically covered by an employer-sponsored plan would be eligible.
* Dependents would be paid for out of their guardian's accounts.
* 15% would be a minimum. You could deduct more if you want.
* There would be a maximum account balance per dependent. For example, the maximum account balance might be $75,000 plus $25,000 per dependent. (When this limit is reached, no salary deduction would be required.)
* Funds would be deposited in FDIC/NCUA insured bank accounts. You would get to pick the institution. I would likely pick a local credit union.
Other points:
* I think we should probably include in this plan a sales tax on medical care and services to pay for indigent care (those who die with negative balance). This tax should cover whatever our generation is predicted to cost in indigent care. It might be 3-5%.
* Private health insurance would be largely eliminated. However, insurance companies might provide "negative balance" insurance. That is, when you die with a negative balance, the insurance would payoff your balance. This would avoid an asset sale when a spouse dies first, for example.
O.jeff concludes with this:
Singapore has a system similar to this. My novel contribution is the notion of a "negative balance" in the health saving account, which is effectively a government-provided loan for health care (displacing the insurance model we have today).
p.s. Those who have zero lifetime earnings would simply die with a negative balance (and no assets), which would be paid for via the sales tax levied on all medical care.
When I first moved here, I did not know too much about how health coverage worked in the U.S. Heck, I am still not entirely sure what to believe. I have some vague recollection of hearing stories about poor Americans being denied access to critical care, just because they could not afford it. I wonder whether this can possibly be true.
Here is an excerpt from Paul Krugman's piece "A Tale of Two Moralities:"
There’s no middle ground between these [conservative and liberal] views. One side saw health reform, with its subsidized extension of coverage to the uninsured, as fulfilling a moral imperative: wealthy nations, it believed, have an obligation to provide all their citizens with essential care. The other side saw the same reform as a moral outrage, an assault on the right of Americans to spend their money as they choose.Wealthy nations, liberals believe, have an obligation to provide all their citizens with essential care. The implication, of course, is that the United States does not do so; at least, not prior to Obamacare. But is what Paul Krugman asserts true? (He is also asserting that conservatives, as a matter of their moral philosophy, do not believe that all citizens should be provided with essential care--an outright lie, of course--but a different matter that I do not wish to pursue here).
And here is Kevin Horrigan, a columnist in St. Louis with his article today: "A Commodity or a Right?"
Health care, regardless of its considerable effect on the economy and the national debt, is not just another consumer item. Like food and water, health care is a fundamental right. We don't let people starve or freeze to death in this country (usually), so why do we routinely let them suffer and die for lack of access to health care?Again, I ask whether this last claim is factually correct? Do people in America routinely suffer and die for lack of access to health care?
Personally, I cannot say for sure one way or the other. My inclination is to doubt these claims (which is not to deny the existence of many other problems associated with healthcare). But the evidence supporting my view is mainly anecdotal.
When I first got to the bank, I became friends with one of the janitorial staff at the gym. We got to talking and I learned that she had at one time needed a lung operation. Evidently, she was poor and uninsured at the time. She is now healthly as a horse. I'll let you fill in the blanks.
Shortly after that, I attended a lecture by Steve Lipstein, CEO and president of Barnes Jewish Hospital (and Chairman of the Board of the St. Louis Fed). The talk, as far as I can remember, was largely devoted to espousing the virtues of the Obamacare legislation. In his talk, he made a remark that made my jaw drop to the table. He told the audience that Barnes-Jewish does not turn anyone way; they do not ask whether people have insurance...they do not even ask if they are American citizens. I would like to believe that this is true at all U.S. hospitals, but perhaps it is not.
So it seems to me, though I stand corrected if wrong, that the U.S. already has universal health care coverage. Of course, when the uninsured go for treatment, someone has to pay for it. That someone, it appears, is the rest of us who regularly make insurance premiums (this is another point made by Lipstein in his talk). In other words, the U.S. already has a system whereby the "rich" subsidize the insurance and health costs of the "poor."
Of course, recognizing this (if it is even true) is not the same thing as claiming that the current system is any good or in no need of reform. I found this article by Randall Hoven quite interesting: "A Conservative Case for Universal Health Coverage."
The impression I am forming is that the healthcare debate has more to do with insurance than it does with healthcare availability. It appears to be a quirk of the American system that health insurance is tied to your employer. So, if you lose your job, and suddenly become sick (afflicted by a pre-existing condition), you may suddenly find yourself uninsurable. You will still have access to healthcare, of course--that is not the issue (even if liberals like Krugman and Horrigan would like us to believe this to be the case). But if you have any assets, you will have to use these assets to pay for your healthcare. This can be a terrible hardship and, evidently, is a major cause of personal bankruptcies in the U.S. Of course, if you are poor, you have no assets and so this does not apply.
So I am wondering: Have I got this just about right? If I have missed the boat on this one, please set me straight.
Update: February 10, 2011
One of my readers sent me something that I thought was too good not to bring to the forefront here. The author goes by the name of "o.jeff," in case that means anything to you.
A Simple Health Care Financing System (by o.jeff)
* Each person is required to put 15% of his or her income into a health savings account.
* All health care spending comes from this account.
* If a charge to your health care account is larger than your balance, then your account balance goes negative. This is effectively a federal health care loan.
* When your account balance is negative, 20% of your income is deducted from your income until your account balance is positive again.
* The money in this account is your money. When you die, any positive balance is passed on in your estate. If you have a negative balance, your assets must first pay off any negative balance in your health care account.
* If you have insufficient assets to pay off your negative balance at death, then the balance is "written off."
Additional points:
* This program replaces all government health care programs, including Medicare and Medicaid. The taxes for these programs would be eliminated.
* Most employers would probably stop offering health insurance as a job benefit. This would free every private employer of this burden and the cost it levies on them. This makes U.S. businesses more competitive.
* The payment for health care services would be immediate and swift--like using a credit card at Wal-Mart. However, providers would be required to retain records about the transaction for a period of time to allow audits for fraud.
* All of the people who are presently employed in medical offices and hospitals to fight insurance companies could be repurposed into actually providing health care services. An enormous gain in productivity.
* People would largely be spending their own money, and thus, they will be more careful about how it is spent. (With today's third party payment of medical expenses, there is little reason for a person to try to spend less.)
* Doctors might get tired of answering the question "How much does this cost?" but the question will be coming from their patient, right in front of them, rather than some nameless guy at an insurance company.
* Cost shifting already happens when non-insured/indigent go to a hospital for treatment. This plan simply makes it very transparent. These people will carry a negative balance funded by all of us. The hospitals would not have to cost shift, and so their prices should become more reasonable immediately.
* The health savings account would be for legitimate health care spending only. Fraud would be very strictly punished--both on the side of the provider and consumer.
* Health care products and services typically covered by an employer-sponsored plan would be eligible.
* Dependents would be paid for out of their guardian's accounts.
* 15% would be a minimum. You could deduct more if you want.
* There would be a maximum account balance per dependent. For example, the maximum account balance might be $75,000 plus $25,000 per dependent. (When this limit is reached, no salary deduction would be required.)
* Funds would be deposited in FDIC/NCUA insured bank accounts. You would get to pick the institution. I would likely pick a local credit union.
Other points:
* I think we should probably include in this plan a sales tax on medical care and services to pay for indigent care (those who die with negative balance). This tax should cover whatever our generation is predicted to cost in indigent care. It might be 3-5%.
* Private health insurance would be largely eliminated. However, insurance companies might provide "negative balance" insurance. That is, when you die with a negative balance, the insurance would payoff your balance. This would avoid an asset sale when a spouse dies first, for example.
O.jeff concludes with this:
Singapore has a system similar to this. My novel contribution is the notion of a "negative balance" in the health saving account, which is effectively a government-provided loan for health care (displacing the insurance model we have today).
p.s. Those who have zero lifetime earnings would simply die with a negative balance (and no assets), which would be paid for via the sales tax levied on all medical care.
