We need a Universal Safety Net for All Americans
My recent article advocating Medicare-For-All (but not for anyone who prefers private insurance) received more than its fair share of negative comments from my moderately conservative audience. Here is another alternative that I have written about extensively in the past and even made a podcast (attached) on the topic – catastrophic health care for all.
The rollout of the Affordable Care Act (Obamacare) was a dismal policy failure. The ACA resulted in the cancellation of millions of existing policies and rapidly rising health insurance costs. Its initially inoperable website became a symbol of this overly-complex, unworkable law.
But Obamacare addressed a significant problem – the inability for those with pre-existing conditions to buy health insurance. Nonetheless, the United States is the only industrialized democracy that allows its citizens to go bankrupt from health care bills. Many millions more fear that a job loss or sudden illness will result in bankruptcy. The most straight-forward solution is to provide every American with catastrophic health coverage, administered through the existing Medicare system.
Even those who have managed to find private insurance are paying skyrocketing premiums. The premiums are too high for working class families to afford and the deductibles vary from $2,000 to $5,000 for individuals and up to $10,000 for families. Furthermore, only 20% of Connecticut doctors have signed up for the Obamacare plans, indicating that, like Medicaid, enrollees will be experiencing long wait times to see physicians.
Obamacare actually rewarded the politically-connected health insurance companies with an unending cash flow. The CEO’s of Aetna and US Health Care routinely earn eight-figure salaries annually. Furthermore, there is a provision in Obamacare that provides the insurance companies with a taxpayer bailout if they lose money on the exchanges. This is why the stock prices of many healthcare companies skyrocketed after Obamacare passed. Meanwhile, patients and doctors are continually harassed with new forms, incomprehensible codes and endless holds on phone calls.
Typical alternative plans involve allowing the marketplace to solve the problem. This is unlikely to protect our most vulnerable citizens. The marketplace works fine for cars, shoes, computers and flat-screen TVs. It does not work for health care. The reason is very simple. The way to make money in health care is to insure healthy patients while ignoring those who are sick or punting them to the taxpayers. Consumers can decide what care is best for them. They cannot choose their DNA.
The beauty of providing all Americans with a Universal Safety Net is that no new plan is needed. It already exists. It is called Medicare – a popular plan that protects our elderly and disabled from huge health care bills. All that is necessary is to extend Medicare to all Americans for medical bills that exceed $50,000 annually. One could then purchase the insurance to cover the first $50,000. This could be done in a variety of ways. Some patients could buy large deductible plans with HSA’s (Health Savings Account). Others could insist on plans with minimal co-pays and deductibles. Patients could decide to add dentistry, chiropractic and naturopathic medicine. Sixty-year-old women would no longer be forced to purchase obstetric coverage, like they are now forced to under Obamacare. Some patients may even decide to not purchase any insurance.
The cost to the federal government would be substantially lower than most would assume. Figures from the Agency for Healthcare Research and Quality, part of the Department of Health and Human Services, indicate that only a tiny proportion of individuals faced medical bills in excess of $50,000 per year (somewhere around 1% in 2019, the latest year that HHS has complete numbers). Of these, only a fraction (about a quarter, or 0.3%) faced bills in excess of $90,000 in any given year. The federal government’s assumption of these costs – only those in excess of $50,000 – would not raise the cost of Medicare significantly, but it would make private insurance very cheap, as the catastrophic costs insurance companies most fear would be eliminated.
There are those who would argue that this is the first step to socialized medicine. In fact, the opposite is true. We already have socialized medicine. Anyone – including illegal immigrants - can walk into an Emergency Room and receive free care. Hospitals in Connecticut write off at least 3% of what they bill for this reason. The taxpayers make up the difference. Universal Safety Net for all Americans is a credible alternative to Obamacare and the blanket call for Medicare-For-All.