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Dogs in Fights

February 25, 2010

Tomorrow’s health care summit should be very, very boring. Unfortunately the US government has some sort of mind toward “civility” that removes nearly all of the life from Congress (see US vs Britain).

In any case, it’s very tough going into this type of situation in the position that I am in, and that is; I oppose the health care “reform” bills as they currently stand, and the Republican party has absolutely nothing to worth bringing to the table. This is a situation where I truly wish I had a dog in the fight, because then I would at least have something to cheer for. Unfortunately, for us right-wing liberals, any outcome is depressingly bad.

What I find frustrating is that even though Barack Obama’s priors lead him, in many times, to bad policy conclusions; I do believe that when he says “bring your ideas to the table for consideration”, he honestly means it. However, a requisite to this task is having ideas. Unfortunately, there won’t be anyone “at the table” tomorrow representing my ideas, or anything even close. However, if anyone is wondering the (starting) list I would bring to the table, here it is:

  • Remove Bans on Interstate Sale of Insurance: Consumers are harmed by the inability for them to hold policies that do not meet the standard minimum for coverage in their state (see: California). Consumers are greatly harmed by the fact that these minimums are wholly set by special interest politics. Consumers should be free to purchase insurance which they deem necessary for their desired level of price and comprehensiveness.
  • Abolish All Current Subsidies and Mandates: Our current tax code severely favors employer-provided health insurance. Not only are the costs to the employer subsidized, but the costs of insurance are deducted pre-tax. This tax setup discourages savings, and encourages a higher level of consumption, which does not have a marked benefit. Subsidies and mandates also discourage health insurance product innovation, hide costs, and generally decrease welfare.
  • Expand Tax Preference for Individual HSA’s: It would be nice to have a tax code that encourages saving. Allow individuals to divert a portion of income into tax-preferred health savings accounts, which can include an employer-matched contribution. Allow these accounts to accumulate savings, and institute a stiff tax penalty for converting the balance into non-health spending cash (you could institute a card program like food stamps).
  • Future Medicare/Medicaid Payments Transformed into Voucher System: Pretty self-explanatory. I do favor means-tested subsidies for the poor and long-term care. The best policy, carefully designed, in this case is to just to give people money. This is, of course, the Ryan plan…but I think with the savings garnered by instituting markets in other parts of health care, I doubt you would need to resort to that kind of cost control.

And a final, radical move:

  • Ban Insurance for Routine Medical Procedures: I don’t actually want this to be implemented, it’s just a fun thought experiment. Imagine that every time you go to the doctor, you pay an advertised retail price, in cash, at the time of service. Say you’re a healthy, young male. You go see the doctor twice a year for a physical at $50, and happen to get Strep throat, treated at $70.[1] During the year, you also carry a catastrophic plan which costs $100 a month (to be generous), which can be paid in a lump sum from your HSA. Your total health spending for the year would be $1,370. That’s it. Not only that, but with retail medicine, you are informed what treatments are available — much like you are informed which DVD players are available at Best Buy — and you can discuss the pros and cons of each treatment with your doctor. Thus, you’ve not only minimized your costs, you’ve maximized your value.

In addition, a list of compromise proposals:

  • No New Entitlements: All Medicare savings must be used to shore up the long-term trajectory of current entitlement spending.
  • Comprehensive Insurance Must Not Be Favored: Relative to catastrophic.
  • Budget for New Subsidies: All new subsidies must be on-budget measures, and not instituted through regulation or the tax code.

____
[1]These are actual prices charged by a “free market” doctor in Denver, CO, in 2008. The prices were advertised, and the doctor did not accept any form of insurance. Not only did he save on billing overhead, but also on cost of treatment. It was a win-win for everyone, especially those without insurance.

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