I was talking to some folks while at Lunacon a couple weekends ago, like I frequently do in other contexts, about the Obama Health Plan and the potentially fatal flaw I see in it, so I thought I'd write it up for my LJ and see what my LJ reading friends think about my thoughts. *grin*
Don't get me wrong. I'm an Obama supporter. I may think that Hillary Clinton's health plan is better, and if she's nominated, I'll certainly vote for her, but I'd much rather Obama was nominated, for the following reasons [side track #1]:
- Obama's emphasis on hope and his "Yes, we can!" slogan are a lot shorter, sound-bite wise, than Kennedy's famous line "Ask not what your country can do for you - ask what you can do for your country", but he manages to communicate the idea that if we all pitch in and work hard we can do anything and solve any problem. He's the first politician I've seen in a long while who doesn't communicate either "Don't worry your pretty little head about the complicated issues; just trust me" or "The problems aren't solvable; live with it." This message of empowerment, together with the need and expectation that everyone will pitch in, is a very powerful and attractive message.
- By electing a biracial man with ties to Indonesia and Kenya, we, the voters, can instantly send a message to the rest of the world that we are over (or at least recovering from) our self-centered "only the USA matters" viewpoint.
- Hillary, no matter how much I respect her intelligence and hard work, has too many enemies on the right that will fight her no matter how excellent her proposed legislation is, just because they don't like her. This means that even if, in my opinion, her health care plan is better, it will also have less chance of passing.
And so we come back to health care plans. My understanding is that both Hillary and Obama are proposing a nationally available health insurance. This is
NOT nationalized medicine or a single payer system. Instead, this is health insurance that people can buy, made available in competition with the various private insurances. The big difference is that the cost to the consumer for this health insurance will be affordable even for people with expensive illnesses, and the cost will also be adjusted for income so that even poor folks will be able to afford this insurance.
Rather than having to be employed to purchase company-subsidized health insurance, or very healthy and willing to pay a lot to purchase private insurance as an individual, this health insurance will be available for everyone. The details of what exactly will be covered by this national health insurance is still to be determined, but it's probably safe to assume that it will cover basic health maintenance (ie, an annual physical), most vaccinations (possibly not some of the newer, less proven ones), urgent care (stitches, ear infections, etc), medications, and catastrophic health events. Depending on who gets their hands on it when its being formed into legislation, it may be fairly comprehensible, but more likely will be as confusing as most insurance plans when figuring out exactly what is and isn't not covered, and exactly what the co-pay or co-percentage is. Oh well. The point is that it will offer affordable coverage to everyone.
Now comes a very serious question: If it is too expensive for the health insurance companies to cover sick people and poor people, whose health care costs more than they can afford in premiums (either because their care is expensive, or because they can't afford much), how on earth is the government going to be able to afford to offer this insurance?
It's a serious question. They can't just jack up the price for the healthy folks too much, or the health folks will all go buy cheaper private insurance or choose to go without insurance rather than pay what they perceive as uxorious rates.
The national health insurance plan will save some money because it won't need to make a profit. Insurance company profits jack up premiums a fair bit, and this national plan won't have to deal with that. In addition, it won't need as complicated a sales force, since the pricing schema will, we hope, be fairly simple. At least, the prices won't need to be adjusted too much for pre-existing conditions. With luck, it'll be able to copy the low overhead of medicare.
This national health insurance plan will get some money from the healthy poor folks who didn't used to have insurance at all, and now do, but not a whole lot, since poor folks will be buying this insurance at a discount. Frankly, even healthy people need annual physicians and are at risk for an acute event, so covering even a perfectly healthy person isn't free.
What both Barak Obama and Hillary Clinton are hoping and planning for is that the hoards of uninsured folks who are unemployed, partially employed (part-timers often don't qualify for corporate health insurance) and employed at small businesses will sign up for the national insurance plan. In addition, they're hoping that some of the large businesses will switch to this national insurance plan. These healthy members will partially subsidize the poor and chronically ill.
They're also hoping that with a huge pool of members, this national insurance plan will be able to negotiate good rates for the various medications and health services.
I expect that the government will have to subsidize this national insurance plan in order to keep the insurance rates low enough to attract consumers, especially in the beginning. I anticipate that the first folks to sign up will be those who have on-going medical expenses and can't qualify for private insurance, i.e. the chronically ill and medically expensive. Ideally, as more people, especially healthy people, sign up, the amount that the government needs to subsidize will go down.
Unfortunately, that means that the highest expense will be up front, just when we're facing financial crises at home (mortgage and investment companies) and huge expenses abroad (Iraq war). I don't envy either Barak or Hillary as they try to push this insurance plan forward. If they say it won't cost anything, they're lying and their opponents will call them on it. The best they can say is that it will be expensive to begin with, but will hopefully grow self-sufficient, and that it will overall reduce health care costs, since taking care of end stage disease is almost always more expensive than early stage disease. (Unless the end-stage is dead, in which case it's really fairly cheap. *wry grin*). This national insurance plan should also put a large dent in the ER over-crowding problem, since all those folks using the ER for urgent care will now be able to get preventative care, as well as outside-the-ER urgent care from their PCP.
However, in order to make this hypothetical national insurance plan self-sustaining, it is absolutely necessary that SCADS of healthy people sign up and pay the premiums, not just the poor and chronically ill.
Hillary Clinton takes the paternalistic viewpoint that the American people, or at least lots of the healthy ones, will choose to value something else (bigger apartment, newer car, food!) more than health insurance. She wants to mandate that anyone who doesn't have some sort of health insurance MUST sign up for something, be it a private insurance policy or the new national health insurance plan.
Barak Obama believes in the educated consumer. He believes that if health insurance were reasonably priced, almost everyone would sign up, and he'd have the scads of people needed to make a national health insurance plan fiscally viable without using any coercion.
I don't think he is correct. I wish he were, but I don't think he is.
The problem, as I see it, is the perceived value of health insurance vs the cost. The cost is not zero. At a bare minimum, healthy people should consume an annual physical, together with any needed immunization, plus a bit more to cover their risk for an acute event. To quote the National Coalition on Health Care: "The annual premium that a health insurer charges an employer for a health plan covering a family of four averaged $12,100 in 2007. Workers contributed nearly $3,300, or 10 percent more than they did in 2006. The annual premiums for family coverage significantly eclipsed the gross earnings for a full-time, minimum-wage worker ($10,712)."
Let's say coverage for 1 person is $3k rather than $12K for four people, and then let's assume that because of economies of scale and no need for profit and collective bargaining and perhaps a bit of government subsidization, the price comes down to 1.5K. That's about $125/month. That may be a very optimistic estimate (50% off), but lets make it.
$125/month is a lot of money. For someone who is concerned about their health, or scared that an acute health event would seriously impact their life, it's worth it.
For someone who is young and healthy, they might prefer to spend $125/month on something more immediately useful.
For someone who doesn't like doctors or health care, they might prefer not to spend $125 on something that reminds them of their mortality.
I have seen many patients in the ER who are covered by some form of health insurance and still don't take their medications. A lot of medical conditions don't have any serious symptoms until the disease is rather advanced. The first symptom of hypertension, if you never check your blood pressure, can be a heart attack or a stroke. The first symptom of type II diabetes, other than peeing a lot, being thirsty a lot, and maybe finally loosing a bit of weight, all of which can be ignored for years, can be irreversible nerve, eye, kidney or heart damage.
[Note: This does not mean that the bad consequences happen immediately; it means that folks with other priorities can ignore minor symptoms until it's just TOO late.]
My concern is that folks who have priorities other than their health will not sign up for this national health insurance policy. They will continue to get sick, and continue to drain resources from the health care system and to crowd up the ER with their problems that are only urgent because they were ignored for so long.
My hope, and Obama's hope, is that this group with a different priorities will be a small minority. My fear is that the human tendency to place greater weight on immediate consequences rather than long term consequences will ensure that this group with different priorities is way too large.
If Obama wins, and if he passes a national health insurance policy that is not mandated, I strongly hope he has other mechanisms to ensure a large spread. Perhaps an excellent marketing team? A mechanism to enroll everyone automatically who isn't otherwise covered, and make it opt out? I guess we'll wait and see.