Health Care Reform

I can understand some people disagreeing with the outlines of Obama's health care reform plan presented so far but I really can't understand how some people can claim that we have the best health care system in the world and should leave it alone. The US spends twice per capita as the next most expensive system and we have higher infant mortality and lower life expectancy than France.

With health care costs increasing at double digits each year, if nothing changes we will all be spending our entire income on health care in the not too distant future. The cost problem is particularly acute for people who have individual rather than group policies. I suspect that the health insurance providers such as Blue Cross are rapidly increasing premiums on individual policies so as to subsidize the group policies which is an area of the market that is more competitive. Large companies have more buying power and have the skill and expertise required to negotiate favorable rates compared to individuals. Additionally, $1,100 per year of health care premiums are attributable to the higher costs charged by health care providers to compensate for services provided to the uninsured which are not paid for.

Some object to a single payer plan arguing that such a plan would degrade the quality of health care. Medicare and the VA medical systems are single payer plans which provide excellent coverage at reasonable rates with the lowest administrative costs in the system. Some object to a public plan arguing that the US can not afford a public plan. The public plan should charge premiums adequate to cover costs and, without premium income going to profits, merger and acquisition expenses and with lower administrative costs, the public plan should be able to be self funding while still charging a significantly lower premium.

Major health care providers have promised to work to keep premium rates down. This is not good enough and it is likely that if the providers are able to reduce costs that the savings will go to their bottom lines rather than to reduced premiums. A public option would use competition to improve service and reduce costs and is the only option that would likely provide the benefits desired.

Following are some policy options that could be used to pay for a new system:

1 - Limit deductibility of company provided plans to $5,000 per year per employee.
2 - Revoke the Medicare part d (prescription drug coverage) or at least cover only catastrophic expenses. It never made sense to me that such generous benefits were provided without means testing.
3 - Tax the major ingredients used to make food that is unhealthy and significantly contributes to obesity, diabetes, hypertension, etc. that lead to higher health care costs. Taxing tobacco products uses the same argument to justify the taxes.
4 - Actively work to reduce fraud in the area of disability claims.
5 – Bilateral Social Security Agreements (totalization agreements) between the US Social Security Administration and certain foreign countries enables individuals to gain credit for US social security benefits for time spent working in certain foreign countries after paying into the US system for as little as 18 months. Modify these agreements such that only the years spent working in a foreign country as a US citizen are counted towards US social security benefit calculations.

Some policy options that would help to keep costs down might include:

1 - Do not allow health care insurers and possibly providers to include merger and acquisition costs in the calculations used to calculate premiums. Let them finance their mergers and acquisitions from their profits.
2 - Permit medicare and any new public plan to negotiate prices with pharma providers.