Health Insurance Regulation

These authors provide nothing but ideology to support their position that deregulating health insurance would improve anyone's health.

They neglect to mention that their plan would effectively eliminate health insurance as anything but a "prepaid" medical plan. They would eliminate the "risk sharing" aspect of medical insurance.

If health insurers could use medical underwriting of groups, they just would refuse to renew one's policy once one developed a disease or exhibited any vulnerabilty.

Even if re-underwriting were forbidden, the insurers would just constantly offer new lower cost policies to healthy members of the groups and raise the prices on people who develop health problems that prevent them from leaving the groups, as already happens in some states.

If cost of healthcare were the driving force behind obesity and other bad health habits, we should expect that bad health habits would be more common in either people who can afford the medical expenses or are insulated from expenses by insurance. These problems are most prevelant in the groups that have the least access to insurance and the lowest ability to purchase medical treatment. Clearly education, genetics, and personality traits trump healthcare costs in these decisions.

The real regulatory change which should be made at the Federal level is mandating health insurance to be a Contract between Insurer and Policyholder, so that the Policyholder determined what medical procedures he wanted his Insurance to cover. Insured could choose their own matrix of medical treatment--up to their yearly allotment, while Insurers could set rates according to the estimated yearly expenditures. lgl.

I don't think the authors have to explain that deregulation would "improve anybody's health," Jon. I think that we can assume tha in the long run, the enhanced competition will force all any inefficent insurance providers. Competition raises the bar, and I look favoribly upon anyone who forwards this policy.

You're correct, to a degree, Jon (1st comment). But you can't deny the current problem with insurance either. Perhaps the economic model of insuring health risk needs fundamental reconsidering, like Mr. Lux wisely suggests (2nd comment).

But even if we just connect some fiscal responsibility to coverage plans or HSA accounts...the competitive affect on medical production would drastically lower the costs of healthcare to that future sick person about whom you're worried.

~Trapper

www.isemmelweis.com

The unstated policy question is to what extent do we want to spread the "risk" of bad health. One could adopt a policy position that the individual should bear the full cost of his or her health care or do without. The consequence of this would be a more "efficient" system; but people with readily treatable diseases would suffer death or permament disability if they lacked the financial resources, regardless if the reason was bad luck or bad decisions. The "efficient" system that these authors propose moving to would even impose this penalty on those who lose their coverage due to fraud by the insurer.

Most industrialized societies have opted for varying degrees of inefficiency as a price of avoiding such a social condition.

Daily Health Policy Report

Opinion | States, Private Employers Likely To Monitor Effects of Minnesota Health Care Reform Plan, Op-Ed States
[Dec 09, 2004]
Minnesota Gov. Tim Pawlenty's (R) health care system reform plan is "a nationally important and unique public-private partnership -- the first such effort combining the market strength of all the main purchasers of health care in a state to push through needed reforms and improve the efficiency and quality of medical services," David Broder writes in a Washington Post column. The plan, called the Smart Buy Alliance, would "mobilize the purchasing power of three out of every five consumers in Minnesota to raise the quality, improve the efficiency and reduce the cost of health care" by pulling "together groups of purchasers ... at the local level," according to Broder. While "each bargaining unit will continue to negotiate its own contracts with hospitals, doctors and HMOs ... by setting uniform performance standards and reporting requirements, the alliance will empower its members to press for better coordination of treatment, more use of technology and fuller information to consumers about the results each hospital or doctors' group is achieving for its patients," Broder adds. In addition, Pawlenty's plan would allow residents to "set up health savings accounts" and "use market forces to seek more effective results in treating" chronic illnesses "that push up medical costs," Broder writes. In an interview, Pawlenty said the plan aims to harness "market forces, without a new government bureaucracy micromanaging what providers do," adding, "But at some point, I wouldn't mind seeing it morph into a [single] purchasing alliance." According to Broder, "the universality of the problem is what makes [the] experiment being launched in Minnesota" likely to "be watched carefully by other states and by private employers across the nation" (Broder, Washington Post, 12/9).

So, is anyone familar with this plan? Comments?

I'm not familiar with that Broder piece T-bone. But, to Jon I'd say, again, you're very right.

Perhaps the solution (gulp) is to promote wealth redistribution, but in a way that the government safety net still drives efficiency like a healthy person's HSA.

HSAs are so new though that this progressive discussion in not yet relevant. And if we forgoe efficiency for the net we may never be in a position to have both. Yet to such an ideal system, America is much closer than many other industrialized nations.

~Trapper

www.isemmelweis.com

Of course the gym rat will probably need medical attention for injuries more than the couch potato will, so the "healthy lifestyle" difference really isn't any difference at all when it comes to needing to go to the doctor. And of course the couch potato will probably die sooner, thus incurring costs for a shoter period of time than the gym rat.