Monday, July 6, 2009

Episode 68: The American Heathcare Act of 2009



Healthcare is the hot button issue in today’s politics. Both sides have very strong opinions on the topic. Those on the right say “if you want health care so bad, buy it! If you can’t afford it, tough nuggets! “ Those on the left however say “Access to health is a basic right, and a nation as powerful as ours should be able to provide that service to all citizens.” Both sides however, agree that a great deal of reform must be done.

So the argument really boils down to basic liberal vs. conservative principles – the constant need to ensure a high standard of living for all, vs. the constant need to ensure a high standard of living for those who’ve earned it. Both sides raise very valid points, as well as some… let’s say not so plausible ones. In the end it all boils down to money. Liberals tend to want to use money to serve as many people as possible (which is falsely interpreted as socialism) while conservatives want to maximize personal wealth (which is falsely interpreted as selfishness and greed.) The problem with using money to serve as many people as possible (especially during a recession/depression) is the finite amount of capital in the coffers, which can only be made up in tax increases (since we can’t cut too many programs because we “need” them). The problem with amassing personal wealth is capitalism. It is the nature of capitalism that for one person to amass wealth, someone also has to lose wealth. Also, many people become addicted to making money, and do so with little to no consideration for others. Outlined here is the crux of the problem.

But enough pandering to both sides of the argument… this is the L Comment! And here at the L Comment, I like to come up with solutions to big problems because we can point fingers at each other all day and not move an inch. So without further ado, I present my new bill (I believe my third) The American Healthcare Act of 2009! This is the ultimate healthcare plan that will make everyone happy.

To begin, why are republicans so disgusted with the idea of public health care? Two reasons – cost and quality. Any other argument is a subset of the aforementioned issues. Anything that involves increase a tax, republicans hate it. They also fear losing options because the government will swallow up big business. In my bill, government healthcare and private healthcare HAVE to coexist.

Article 1: All Americans are guaranteed $3,200 worth of medical services per year

By utilizing a healthcare information technology (IT) network, each American will be entered into a national healthcare database. (Put you Ayn Rand books away, if you have a social security card, then you are already in a database!) This database would include your healthcare chart, family history chart, other relevant healthcare info (such as current prescriptions) as well as a healthcare credit. Each citizen is guaranteed $3,200 in free medical costs per year (this number is derived from the $960 Billion dollars already allocated for healthcare - let us for argument’s sake take Obama at his word - divided by 300 million, the rounded up estimate of legal American citizens.) At the end of the year the debit would reset to $3,200. Thus, if a person used all the money, they’d get it all back on January 1st. Likewise if their debit was at $3,100, the system would only add $100 on January 1st.

This money would go towards paying for basic medical services. Without insurance today, it costs about $750 to get a checkup. Since most people go to the doctor twice a year, this essentially would give a person 2 checkups and two visits, with money left for free medicine (prescriptions and over the counter). The goal is to provide some kind of assurance that one could go to a clinic, not an emergency room, to treat an illness because they know they can see a doctor at a clinic if they need to. For people working in government jobs, they could qualify for a Public Premium Plan (PPP). With a PPP, An employer adds an additional $9000 per year on the premium, which would give that individual $12,200 of coverage per year. This saves businesses about $3000 a year per person in health insurance costs. For private enterprise, they can offer their workers a Private Enterprise Plan (PEP). A PEP works just like a PPP, except they cannot participate in both a PEP and private option. Also, a PEP can chose a from a few more packages - $5000, $9000, or $12,000. If a private enterprise wanted to go with an all public option, they could with the $12,000 PEP, but since the public package offers nothing but healthcare credit, it is not always advantageous for private enterprise to use a public plan. Smaller businesses could use the $5000 PEP to save money, while still adding a little more assurance.

Article 2: Credits can be reallocated between family members

Family members can pool their credits together. Divorced couples can only pool money together with written consent. Thus in a family of 4, a family has $12,800 worth of healthcare credits (which is the avg. price of healthcare per year.) Children who claim dependent status (or after they turn 25) can no longer be included in the pool. This allows a family without private insurance more flexibility with doctor appointments and access to medicine.

Article 3: Non basic healthcare is paid for through loans

For anything larger than basic coverage and medicine, such as a surgery, the public option would involve using a loan process nearly identical to student loans. With the Stafford student loan, the government subsidizes part of the interest and puts a cap on the maximum interest rate (as of July 1st 2009, it went from 6% to 5.6%!) If you have an injury that requires a surgery and do not have private insurance, you can pay for your operation by taking out a government loan, which will also cap the interest rate and subsidize a portion of the loan. Congress can debate on the actual cap %, though 5.6% seems fair to me. The person can choose from several payment options: a 6, 12, 24, 48, 60, or 90 or 120 month payment plan. Obviously one should pay as soon as possible to avoid paying a lot of interest, but a 120 month plan could bring a loan to a very small and manageable price per month. Like the Stafford loan, a person can change the payment schedule or pay the loan in full immediately without penalty.

Article 4: Private Healthcare still plays a big role

Notice that I use the term private healthcare quite a bit. I do think that it is important to maintain a vibrant private healthcare system, because our version of capitalism enforces high standards through competition. All citizens are guaranteed $3,200 from the government, but it is not enough in some cases, namely if you have a chronic condition or a major surgery. Thus, it is still necessary to buy private insurance. There will be a lot of private insurance reform, namely eliminating the denial of coverage due to pre-existing conditions and usage of generic medicine to save costs to name a couple, but the majority of major healthcare use will still be through private insurance. Private insurance companies will be required to be in the same medical database, largely to maintain a uniform system of record keeping and medical chart updates. Unlike the public plan, private insurance could offer many perks, such as a deductible for surgeries rather than taking out a loan, discounts for brand name medicine, and coverage for special operations, such as gastric bypass surgeries. However, under the new system, the public plan is built to coexist with the private plan. By offering a guaranteed $3,200 for basic coverage, that is money that the private insurers don’t have to spend. This can bring premiums down by that much money, lowering monthly payments for those already on a private system. Or they can budget the same amount of money to offer more competitive packages.

Article 5: Americans can choose their own doctor, or keep the one they have

Because the public plan is only a credit, there are absolutely no restrictions on which doctor one can see. For people using a PPP or PEP, they have maximum choice in the doctor they see because of the amount of credit they have to spend. People on private insurance are bound by the rules of their contract. Because of the complication of being able to choose your doctor under the public system and then having restrictions with private enterprise, I think private insurance companies will allow one to see any doctor. Also, with medical records being stored in a database using a universal protocol, there is little reason not to let one chose their own doctor anyway.

How much does it cost?

The price tag of the plan is 960 Billion. This will cost the taxpayers no money and it will not add to the deficit. In fact, it is 40 Billion cheaper than the proposed plan. The money for this plan comes solely from the reallocation of the funds for the current healthcare budget. Given our population is under 300 Million (because illegal immigrants do not have social security cards, they do not qualify to receive any funds.) To pay for the loan subsidies, revenue from the rollback of the Bush tax cuts will be used, as well as accrued interest on healthcare loans (money gains from healthcare gets reinvested back into healthcare). Over time, the costs will start to decline, as most people will not use all of their credit in one year. We should see an all around reduction in price because government offers basic services that private companies do not need to spend, and the number of people using emergency rooms as clinics should sharply decrease.

***
If you are on the left, you like this bill because: it offers every American citizen a piece of mind. It seems impossible to fund a full blown healthcare program without raising taxes or cutting a significant number of programs. However, because all Americans can get basic needs met and essentially get free medicine which does include over the counter medicine too, this act is a foundation for a universal healthcare system that is uniquely American in operation. As we pull out of the recession and look forward to better economic days ahead, more tweaks can be made to the system, like increasing the amount of credits per person.

If you are on the right, you like this bill because: you have to admit the idea of a little piece of mind that doesn’t compromise the already budgeted monies and costs nothing for you is a good thing. Moreover, healthcare remains in the domain of the private insurance industry. There are far better perks to getting a private plan that using the public option for credits and loans. In time you can find ways to streamline the process further to save even more money, such as further reform to reduce operational costs to lower the annual healthcare budget. However, and most importantly, this is in no way a government healthcare plan. The government is limited by the extent to which they can pay for health services, so a “government takeover” is no possible in this proposal

I submit this bill to you, readers of the L Comment… what say ye?
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16 comments: on "Episode 68: The American Heathcare Act of 2009"

Anonymous said...

[taken from a comment on TheLAw's Facebook page]

Don't people who can't work and get insurance because of medical conditions or whatever already qualify for Medicaid/Medicare?

Republicans don't hate ALL tax raises...I vote yes for the school budget raising my taxes every year :) And, it's not about amassing wealth- it's about the fair distribution of income to those who choose to work for one. There's also the issue of wanting the national government to control as few things as possible. I have no problem donating a significant portion of my income to help people locally- it's way different to have a huge bureaucracy take 1/2 my paycheck (or more in the future?) to "reallocate" to who knows where.

I know those were small details in the face of your bill:)
I have been watching the L Comment- keep up the good work!

Anonymous said...

[taken from a commment on TheLaw's facebook page]

I think that a for-profit health insurance company is a conflict of interest. Something you need to live shouldn't be so hard to get, so hard to keep, so hard to afford, and STILL no guarantee that you will be covered if anything happens. It's a shameful system but I guess they have the money and the power so they're not going away.

The Law said...

@ anon1, you are right... to be more fair and accurate, I should say "federal taxes." With local taxes, you definitely have a better idea of where you money is going and can better see the fruits of you tax dollar at work.

But if that's the small detail, I hope thats a "yes" vote! =)

@anon2, I also agree for-profit healthcare does create a conflict of interest, but the positive side of that is the healthcare we do have is second to none because of its capitalist nature. I try to reconcile the captialist nature of healthcare by softening its impact somewhat, but it takes more than a silver bullet to bring down an 800 pound gorilla!

TRUTH 101 said...

I believe single payer, universal health insurance, funded by a 4% income tax, combined with appropriate deductibles, is in the best interest of all Americans. This takes the burden of health insurance expense off our businesses. There will always be a market for after market insurance such as AFLAC.

The system now is cumbersome on patients and providers. Providers have an army of clerks submitting claims to any number of providers or requesting procedure authorizations.


The income tax and deductibles make sure everyone contributes to the plan.


Thanks for allowing me to post TL. I was going to link your site but I'm having bigtime troll troubles and don't want you to be subjected to that. I just hope you don't think I'm a "troll."

Continued success to you.

The Law said...

@truth 101, I think that idea is interesting, but I think it might be tough to sell, especially when Obama explicitly said he wouldn't raise taxes on the middle class. The George H.W. Bush "Read my lips..." would play over and over again in special interest commercials.

With microsoft and google vying for the medical records field... you can bet your bottom dollar that system would be very efficient though.

Still, feel free to link the blog... hopefully, the cooperative tone I try to enforce here will rub off =)

Thanks for stopping by and please feel free to

TRUTH 101 said...

Wiil do on the link.


I would think the income tax everybody pays would appealto the right in that nobody is exempt. A coomon cry of theirs is about "welfare mooches." This way, they're paying. Might help the sale. Not that this has a chance for the next 6 years anyway.

conservative generation said...

tL,

Are you sure your a prog? You're 3 for 3 on the bills.

I don't agree with everything in your opening especially how making money means someone losses money. The point of capitalism is that the fruits of your labor are yours to do with as you please and not for some government bureaucrat to spend for you.

I digress.

Here is what I like about your plan. At least, from what I understand. My biggest problem with any health care plan is mandated health care. In the end, people need to be able to spend their own money if they choose. If I had a serious illness, I'd like to go out with my boots on and I need the option of going it on my own in case the private/government insurance plans don't want to pay. Your plan doesn't require that.

It has limits, aka over $12,000 and you take responsibility.

I never had problems with the health database so long as their are measures in place to avoid abuse. It's technology and technology makes things cheaper.

I sets up a system where younger generations don't have to bear soaring costs, but still gives younger generations a line so that they also benefit.

The loans add a sense of responsibility that is missing from our current or Obama proposed plan. If you needs lots of health care, you have skin in the game. People aren't just going to pay millions and millions for you, but we aren't turning you away at the door either.

My only negative thought is that the AARP is never going to go for it, the current retirees will never want to give up what they've got.

One other thought is that perhaps people's credit can roll-over or maybe a percentage would roll-over to offset larger procedures.

Truth 101 (Forgot to sign in. Whoops.) said...

Right now there are people that could afford health insurance but choose to take their chances. Then if the unthinkable happens they can file bankruptcy or get public aid. Or just ignore the hospital bills. 47 million without health insurance that those that do have and pay taxes cover for now. Single payer eliminates this. The only real problem is getting many people to get over their fear of the propagandist term "socialized medicine." Millions are under HMOs. Your care is already subject to approval and must go through HMO approved providers. Even if treatment is approved out of network, the copays can be massive.

The Law said...

@ CGen, Thanks! I'm glad I have your support... you read it exactly right. After hearing all the points of view on the topic, I tried to create a bill the reconciled the best arguments made. I did consider roll-overs for the $3,200 credit, but took it out to keep costs low over a period of time. That way, for at least a decade we can budget teh same amount of money, but increase the wiggle room with each passing year.

I really do consider myself center-left. Liberal crazies are just as bad as conservative crazies, so by finding the common ground, we can get work done. I think it is as bi-partisan the system will ever get lol.

@ Truth, giving you idea some more thought I think that especially now, a 4% increase in come tax would be difficult fo rmany to pay. Along with many of my peers, I had trouble coming up with the money to by taxes as is this year. Perhaps under a more stable economy or reformed tax sturcture, it may be a solution. OR we can combine your idea with mine... a 1% income tax increase to cover the cost of loan subsidation and credits. The 1% could even go into a trust for a rainy-day healthcare fund as well. It would be a relatively insignifcant increase in taxes that could amount to a signigicant number when the tax is collected.

conservative generation said...
This comment has been removed by the author.
TRUTH 101 said...

It's simply paying the premium to someone else. And business could hopefully afford to pay a higher wage when not saddled with the burden of health insurance TL. Not that I'm naive enough to think all businesses would do that.

But most places that offer coverage to employees, the individual is covered free or at a low cost to him. The employer eats most of the 400 to $700 a month. The family coverage gets real expensive for the employee.

I strived for a simple as possible way to pay for this. And everybody contributes.

Mark Meloy said...

Very well thought out posting. I appreciate the time you took min this.
Still, however, the best route is to reduce the cost of healthcare without a public option. The chances that this will become just another public waste of cash, like the DMV or public school system, an entity lacking in any accountability are extremely high. If it is run properly, with the bottom line being accountable, it will lack the ability to raise funds through a public offering, thus still remaining an endless cash hole.
Tough regulations on the entire medical field is still preferred, and should be, at the very least, the starting point.
Regarding a comment made bt "conservative generation:" "The point of capitalism is that the fruits of your labor are yours to do with as you please and not for some government bureaucrat to spend for you." Agreed. However, when your exorbitant fruits are a product of the system, and these fruits would never be had outside the system, then something is owed back to the system.

Left Coast Rebel said...

The Law - Great post, I agree with some of your thoughts here, disagree with a lot too. It is obviously much more well-thought out than most of the drivel passing the way throught the halls of Congress.

1 - You have the definition and nature of capitalism totally wrong. For one man to gain in a market economy, does not necessitate that another loses. It is simply not true. Brilliant minds from Steve Jobs all the way down to the Hispanic taco shop owner down the street from me have amassed their wealth through a fair and open exchange between free-choosing individuals. It is as basic of a necessity for a free society as freedom of speech. The freedom to own the fruits of your labor, to choose where and how to spend those fruit, to not be coerced by a State do-gooder. I know that this concept is lost now but I really do believe this.

2 - The finite amount of money in state and federal coffers from a downturn cannot and has never been remedied by tax increases. Tax increases necessarily have the effect of discouraging the target of the tax - business activity and income/wealty production. The surest way out of a massive recession is to actually do the precise opposite of that which is being done right now. Cutting government, (especially waste), laxing regulations and taxes. It may seem counterintuitive but it is true.

3 - If I were to compromise, I would have to say that as madated, your system of private and government competition would work on some levels. The reason, (as a limited govt guy, not a GOP member), that I hate socialized medicine is not necessarily because of the tax implication but more so because of the inherent individual restrictive tendencies of a Federal program.

4 - I don't like the sound of a healthcare IT network as it may sound nice today - but what happens when it is in the wrong hands? How about when such a network is in the hands of a flaming right-winger? Too much potential for abuse, the Feds already have too much power to intrude in our lives, I'm going with my libertarian tendencies on this one. Perhaps it could be something voluntary that would reward you with savings on rates, etc?

5 - I like your loan idea, very interesting. Interesting that you draw the parallel to student loans.

I apologize and must fast-forward. On to your cost of 960 billion.

1 - I am very skeptical that the Bush cuts rollback could pay for this as that is leaning massively on high income folks. What if that doesn't work out? The middle class gets hosed. Also in the the 50 or so million 'uninsured' number, roughly 20-25% are illegal immigrants. I have every certainty in the world that illegals would be able to get on the system, (yours disallowing that is a major plus).

I give your bill a 3 out of five. That, my friend is saying something since I am one of the right-wing crazies that you mention, at least in a libertarian way, not necessarily socially.

Left Coast Rebel said...

Also TL - please don't ask that I respond to your posts often as I could have written an entire post over at my site with the time here :)

You'll make me lose my crazy conservative readership......

The Law said...

See, I think this plan minimizes the risk of wasteful spending because it is very simple. A no strings attached $3,200 credit. The government in no way dictates how you spend it. Every American with a social security card would be issued a health card that has your balance... just like a debit card. Go to CVS, swipe your card, get your medicine - a perscription, or advil. Go to the doctor's office, swipe it to pay your co-pay, or use it to pay a medical bill all together. I don't think it needs to be more complicated than that.

@ LCR, thanks for your comments! A national healthcare database would drastically reduce healthcare costs, while making the system super efficient, accurate, and always up to date, so all doctors and insurers are workign off the same information. As I mentioned, Microsoft and Google are leading the way pinoeering this technlogy. Thus, it would be a free market who is running the show, not government. Many companies can offer a service that tracks your medical records, and even offer certain perks to using microsoft over google over... i dunno WebMD. But they would all access the same national database to ensure everyone has the same information. It would NOT be one gatekeeper with only one key.

And no worries LCR, I'll only call for ya for the big stuff!

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