Tuesday, August 25, 2009

More Health Care

Ask any proponent of health care reform what their ultimate goal is and your bound to get any number of different answers. Health insurance for all! Public option! Better health care! Less expensive health care! Better care for less money! And just plain take it to those greedy insurance and pharmaceutical companies!

The problem is that health is such a broad field whose tentacles to reach into every crevice of the economy. Reforming health care is a massive ordeal because trying to manage the individual health concerns and conditions of every American is a truly massive project. Honest proponents of reform recognize that there is no magic wand - there's no way to magically provide everyone with better care then they currently receive at a lower cost. At times reform may be sold this way by the Obama administration, but I think most of the policy wonks on the left are more pragmatic when they're not playing politics and ultimately think they are working for reforms that would help everyone.

But cast aside the politics and dramatic goal of changing our health care system for generations and let's take a look at the real problem areas when it comes to health care in America. Because in fairness, the majority of Americans are reasonably happy with their employer-provided coverage. So what are the problems?

1- The high cost of purchasing health insurance on the free market and the disparity between those with and without employer-provided care.

2- The uninsured. I've heard the number range anywhere from 12 million to 45 million depending on who's doing the counting.

3- The preexisting condition problem, where private insurers won't cover individuals whose preexisting conditions make them costly customers.

4- Denial of care, where insured individuals are denied care by their insurance company.

5- The ever-increasing cost of health care in general.

I think that's about it, but I'd be happy to adress any other big issues people can think of. Rather than tackling these problems as one goopy mass, why not address them one-by-one.

1- This highlights the inequities of our current system and the obvious fix- taxing employer-provided health benefits as income- is politically unpopular. Intellectually honest liberals should like this idea as all it does is put those without employer-provided insurance on equal footing with those who have employer-provided insurance. Take two individuals making $40,000 per year, one who receivers health insurance from his employer and another who does not. Even at a low, low price of $500 per month in health insurance costs, the individual with the employer-provided insurance is receiving $6,000 a year in health coverage tax free. That other individual without the employer-provided care has to pay for his health insurance out of pocket, out of their post-tax income. Nothing wrong with different workers receiving different benefits, but there is something wrong when that second individual, even if they can obtain that same $6,000 coverage, is being taxed on it, while the individual with employer-provided care is not. Funny enough, none of the proposals we've been hearing about really address this disparity which adversely effects the working poor and lower middle class.

2- By all means, let's insure everyone who wants to be insured. At some point I can accept the need for society, through the government, to help people out with their health care needs. But what about those who can afford to purchase their own health care, but choose not to. The real issue when it comes to a universal mandate is the forced purchase of coverage. There is a certain logic to mandates, the argument being that society will ultimately be forced to bear the cost of your medical care should you get sick or injured. My counter argument is two-fold. First, we're almost exclusively talking about young individuals who make too much money to be eligible for any government subsidized program and I don't think I've ever seen data that this group is a major drain on the system or that this group is being driven into poverty by unexpected medical bills. If these folks are making enough money to purchase health insurance in the first place, they're certainly making enough money to pay for reasonable amounts of medical care and they're not the sort of people to not pay off their debts- again we're not talking about the poor.

3- Again, another problem that fully illustrates the troubles of our current system, this time in regards to the notion of health insurance in general. Insurance is typically designed to cover unexpected and unlikely events. Car insurances covers damage caused in accidents, life insurance covers unexpected deaths, and home owners insurance covers unexpected damage to your home. But health insurance is expected to cover the gammit, from the expected to the unexpected and herein lies the problem. Of course health insurers don't want to cover individuals with preexisting conditions. Why would they? Covering an individual with a preexisting condition is akin to auto insurance for a car that's on fire, home owners insurance for a home in the midst of a tornado, or life insurance for someone of their death bed. Insurers don't want these these people because taking them on means losing money.

Now I don't mean to gloss over this issue as it does represent a real problem, particularly given our system where losing your job could mean losing your health insurance. But the solution of forcing insurers to take on individuals with preexisting conditions doesn't seem like a solution at all- rather, it seems destined to further raise costs for healthy individuals. Insurance companies after all, aren't going to cut into their profits if they can help it. They'd rather pass on the costs to us.

4- Insurance companies denying care seems to have been the big boogeyman ever since Michael Moore's Sicko. It's just plain a non-starter, given that any system where individuals don't pay directly for their own health care is going to have some system in which some individuals are denied care. This will be done if you have insurance and this will be done if your health care is provided by the government. Maybe the government will be better than insurance companies in this regard, maybe it won't, but if the denial of care troubles you, the answer is giving more power back to the individual to make their own decisions, not having a system where insurance adjusters or government bureaucrats ration care.

5- The cost of health care? This is a tough one because we tend to talk about costs on the macro scale. The truth is, I'm not sure there's any good data as to what we really spend as individuals. Macro data is bound to be skewed by the rich, who can spend unlimited millions on health care in America, particularly when it comes to end of life care. When the rich and powerful of the world are gravely ill, they inevitably come to America for treatment. What this all means, I don't know. But wealth disparities in health care spending, along with the spending increases that accompany technological innovations make me wonder how much of a cost crisis we really have.

I've said it before and I'll say it again- I have no problem with the government providing health care for those who can't afford it themselves. I would prefer this help to come in the form of health care vouchers, similar to food stamps, so that more strong signals could be injected into the market, but regardless of the form it takes, I'm not opposed to helping the poor. The real problem with government provided health care, with government involvement in the health care business at all, are the vastly distorted ways we wind up subsidizing one another. As I said, I have no problem with the wealthy subsidizing the health care of the poor through taxes. But why should the young and healthy be forced to subsidize the old? Why should lower middle class subsidize the upper middle class, which is certainly a possibility given the vastly complicated systems we've seen proposed? My number one problem with all the proposed reforms is that they make our system more complicated and do nothing to put control of health care and decisions about costs back into the hands of individuals.

Finally, the one other issue I wanted to address is in regards to problem number two and the issue of the uninsured. It's common to here that the uninsured cost the system not just in the present, but down the road as well. This is part and parcel with the argument for more preventative care, in order to better contain health care costs down the road. On the macro level, it's a perfectly reasonable argument. If you avoid paying a doctor for twenty years and then get really sick as a result, it's troublesome that society could be forced to pick up the cost of your medical bills. But if skipping your checkups is certain to raise costs down the road aren't other unhealthy behaviors- smoking, drinking, obesity, and unsafe sex- even more likely to raise the costs of medical care down the road? That's not to say an insurance mandate is necessarily the first step on the slippery slope to forced diets and exercise regimes, but the logic isn't too far off. In a country that's supposed to value privacy, government intrusion in the health care realm- in the form of forcing people to do anything- is troubling.


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