Can Pres. Bush Bring Health Insurance to 47 Million Americans By One Quick Fix to the Tax Code?
For over 50 years, the American tax code has declined to tax employer-provided health insurance. Employers can deduct the cost of providing the insurance, and employees' income is not taxed on this fringe benefit. Not only is this system unfair to the remainder of Americans who must buy their own insurance with after-tax money (or go without), it also distorts the health market in odd ways. Why should our system prefer that employers choose health plans, rather than consumers choosing for themselves? (These two groups likely have different priorities.) And given that workers often change employers (and therefore change insurers), this system encourages insurers to only manage short-term costs, without investing in long-term health.
According to the New York Times, in President Bush's upcoming state of the union address, he will propose that we change all that. And he thinks that doing so will bring health insurance to 47 million Americans. Aside from the merits of this proposal, Bush should be applauded by the Democratic Congress for using the bully pulpit to put the spotlight on this critical issue.
As my friend Ben Falit explained this summer in the Journal of Law, Medicine and Ethics, Bush's proposal won't be entirely new. (See 34 JLMEDETH 632.) In last year's SOTU address, Bush set the goal of helping "people afford the insurance coverage they need." In the interim, he has not done much about that goal, except to quietly release a White Paper (pdf) a few days later. That paper included many different reform proposals, beyond the mere tax treatment which we are now hearing about.
Below the fold: Initial analysis suggests that the 2007 plan may be worse in some ways, and better in some ways, than the quiet 2006 proposal. ...
First the good news: One improvement in the 2007 proposal is that last year, the Bush Administration still seemed fixated on the "Health Savings Accounts" which were passed as part of the 2003 Medicare bill. These were too complicated to really help the average Joe, and simply expanding them would have helped little. HSAs allow a taxpayer to deposit pre-tax dollars for medical expenditures, but they were only available to taxpayers who were enrolled in a "qualified high deductible health plan." As Ben explains, this needless complication created another
"market distortion associated with conditioning the deductibility of insurance premiums on the purchase of a high deductible plan. ... This leaves some residual incentive to purchase coverage through an employer, and therefore hinders specialization and innovation within the insurance market. Furthermore, there is no reason to believe that high deductible health plans (HDHPs) are the best policies for all consumers. Such plans may encourage relatively healthy enrollees to make cost-conscious purchasing decisions, but the same cannot be said for the chronically ill who know from the start that they will exceed their deductibles."
As far as I can tell from the preliminary leaks, the 2007 proposal drops this arcane emphasis on HSAs and instead simply allows a deduction for health insurance, up to a certain dollar amount.
Now the bad news: As Ben explains, the 2006 proposal included an effort,
"to mitigate the regressive nature of the current tax subsidy. Low to moderate income Americans who cannot afford health insurance will be given refundable tax credits to help them purchase a [Health Savings Account] policy that covers major medical expenses and preventive care. ... Furthermore, President Bush plans to increase funding for community health centers that provide primary and preventive health care services to medically underserved populations. He has set out to 'establish a Community Health Center or rural clinic in every high-poverty county in America that can support one.'"
Unfortunately, the White House source for today's NYT article emphasized that the 2007 plan is costless for the Federal Treasury, which suggests to me that these credits and other funding have been left out. That's a real shame, because providing mere tax deductions is sharply regressive, because those in the higher tax brackets will benefit much more than those in lower brackets. Moreover, for the one third of filers who have no tax liability, a deduction is useless.
It's hard to see how mere tax deductions will insure the poorest Americans who are caught in the gap between Medicaid and a good job that provides insurance. But even if the 2007 plan included credits, they would have to be sufficiently large and advanceable, so that Americans could access the money when they need it for health expenses, not a year later when they file their taxes.
The bottom line: As noted in the first paragraph of this blog, the status quo has real problems. However lets not be so naive as to think that fixing that tax disparity will automatically bring insurance to the uninsured, as Bush seems to suggest. Even when workers get the benefit of the new minimum wage (26 months from now), that's only $14,500 per year. The average family health insurance policy today is $11,000 per year (and goes up twice as fast as inflation). You do the math.
Affordability sometimes isn't as much a problem as availability at any price. As more jobs become contract (without significant benefits) and COBRA runs out, people with preexisting coverage, especially of older age, can't find coverage at any price.
I don't think individual tax changes can exert the necessary pressure on benefits managers. It will take consumer cooperatives, as with the Federal Employees Health Plan or, in more flawed form, in the Clinton plan.
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Howard
*equal opportunity offense to both extremes*
January 20, 2007 11:00 PM | Reply | Permalink
I don't see how this "plan" would improve healthcare affordability, availability, cost control, or quality. This is a real non-starter. Wealthy individuals will have their premiums subsidized at a higher rate than middle-class people. Also, if I can't afford $11000 for health insurance, a deduction won't help. If I have a pre-existing condition, this won't help. Corporations will now have an excuse to "cap" their insurance costs at the level of the tax deduction. Where's the benefit for the average person?
January 21, 2007 6:52 AM | Reply | Permalink
A good reason for insurers to have been happy with employer insurance is the automatically selected healthy population--if you're sick you're not working. So the labor pool is naturally non-random and excludes lots of high-cost medical issues.
Health should simply not be an insurance business. Those who can best afford it correlate with those who don't need it. Unlike public goods such as immunizations, clean water, and sanitation, our health care "system" is merely a racket. If an insurer refuses flood insurance for a business or home on the Gulf Coast the client can presumably move. With bad genes or bad luck, the client is hostage to circumstance, which violates market principles.
We don't tolerate other business competition involving assassinations or open warfare (at least within our borders) but for health care we encourage surviving winners and dying losers.
January 21, 2007 7:11 AM | Reply | Permalink
Any system focusing so much on tax credits has at least two problems. First, it is about even more choice among private insurers, so it multiplies the cost and complexity of the system, preserving all the privileges of private insurers to restrict coverage and hike prices. Second, it naturally helps most those who bear a significant tax burden. Using tax cuts to insure even parts of the middle class is almost meaningless. Using them to insure the poor is impossible.
John
http://www.haberarts.com/
January 21, 2007 9:04 AM | Reply | Permalink
Another benefit for the rich due to the differential benefit for those receiving these benefits.
Health "insurance" is a privatized tax that is, by being linked to employment, a payroll tax for those who are fortunate enough to be employed with participating employers. This is the most regressive arrangement possible, aggravated by the excessive costs associated with the insurance profit system.
Insurance reduces risk. Most health insurance has nothing to do with risk.
Rising "health care costs" are a TAX INCREASE that is promoted by the right. If the Democrats want to address this issue, they should learn to talk about it this way.
January 21, 2007 9:13 AM | Reply | Permalink
Again not necessarily judging whether the plan is executed by single or multiple payors, a practical necessity is that with very narrow exceptions [Note 1], coverage cannot be optional. Think of the model of mandatory liability insurance coverage.
An immediate retaliatory meme will be "taking away choice" and "new taxes". There are quite a few responses here. Especially with a multi-payor system, as demonstrated by the Federal Employee Health System, there can be many choices. On another level, there are already "taxes" in the form of unfunded mandates such as EMTALA.
EMTALA is the Federal law that requires the emergency room in any hospital receiving federal funds to evaluate patients to determine if they are stable, and to stabilize them if not. It also applies to ambulance and other field medical services.
While EMTALA is abused considerably by people who use the most expensive form of health care delivery, the emergency room, as their source of primary care, EMTALA has a reasonable premise. Suppose Bill Gates wrecks the $750K Porsche that is now legal to drive, and is found, unconscious and without identification, in the wreckage. Just as private fire departments only putting out fires in insured buildings have not worked -- fires spread -- emergency medicine has to move quickly and can't, in practice, check for ability to pay. In many cases, the patient will be able to pay but unable to tell the staff how.
The unfunded mandate side of EMTALA comes both from people seeking routine care, and from major emergency patients -- think shooting victim of a driveby -- that have no coverage. It's quite easy to run up costs in the hundreds of thousands stabilizing a multiple gunshot victim.
Since EMTALA has no funding, the health care facility have to cover their real costs. In practice, this happens through the voodoo of "cost shifting": spreading unrecoverable costs into the bills of those sick people with some ability to pay. The self-pay, of course, get hit worst -- they have no large benefits manager negotiating discounts. As an example, when I was covered by the second largest manager, the total cost paid by the manager and myself, for a pacemaker installation, was $1800. If I went in self-pay, the bill would have been $24,000.
Does it make sense to charge the sick for the care of the uninsured, given that care is provided under Federal mandate, or to bring that cost under general revenues, perhaps from the population covered for medical services. How is this logically different than funding fire services through general revenues, especially since fire services are often the medical first responders?
[Note 1] An example of a legitimate exception, under the First Amendment, might be a Christian Scientist or other person who has religious objections to medical treatment.
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Howard
*equal opportunity offense to both extremes*
January 21, 2007 9:23 AM | Reply | Permalink
Getting general in spite of the specifics of this thread, two possibly competing trends loom: DNA analysis which will make all of us liable for "pre-existing" condition exclusion, and increasing mechanization of health care.
The latter, slow but inexorable, will replace costly health care that is an art practiced by artists (doctors) with protocols of analysis and intervention of which LASIK is a good example. Systems would scan an individual to evaluate specific differences and do the actual work automatically. Unfortunately, there is a lot of hard work ahead before that kind of service is common for other than a few easy procedures. For now we remain in Dr. McCoy's "Dark Age" of medicine, using either the knife or magic herbs (drugs).
It is the first issue, DNA analysis, that will be the huge problem. It will probably require either forced universal coverage or a Civil Rights law that prohibits discrimination based on genes. This would be hard to pass, because instead of the evidence supporting non-discrimination, it will support the opposite, at least until there are dependable fixes for genetic tendencies that would lead to expensive health issues. We should possibly anticipate lawsuits alleging fraud if a client with heart disease tendencies eats a juicy burger.
January 21, 2007 10:16 AM | Reply | Permalink
No major medical reform can avoid dealing with malpractice. One alternative, if the dollars can have a sense of fairness, is a no-fault system. No-fault workers' compensation systems vary from state to state, but are as frequently gamed as is the general malpractice industry. Compensation carriers frequently draw out proceedings until the average claimant has no resources other than to settle.
I went through an exception with my ex-wife, where the comp carrier's delaying strategy, and the very limited compensation to the employee's attorneys, didn't work. At the time, I had outstanding medical coverage and cover our living expenses. We were also both able to do legal and medical research that normally would not have been affordable by our law firm.
Apropos of genetic analysis, while the particular problem was a repetitive motion injury from computer overuse, at the time of the hearings, there were no solid studies that pointed to a genetic predisposition. Now, there are, hereditary susceptibility to nerve pressure palsy, which are several variants of the genes originally associated with Charcot-Marie-Tooth syndrome. I urge anyone who presents with a repetitive motion injury in one extremity, and develops problems in another, to get the genetic screening because it can help guide treatment (there's no cure) and identify related people at risk.
Obviously, it's also an employment risk. The Southern Pacific Railroad took their claim of predisposition to the Supreme Court, and the court told them they couldn't use it. I don't, unfortunately, have the specific case link.
One of the ironies is that even when this particular predisposition exists, good ergonomic design of computer workstations and furniture, as well as teaching proper hand positioning, avoids the problem. Coincidentally, those ergonomic improvements tend to increase productivity -- but they do incur capital expense. It's a classic problem of American industry focused on short-term profitability, where the longer-term investment actually improves value.
Now, a disclaimer: I do work on information systems that are specifically aimed at reducing medical errors and increasing efficiency. Let me go to prescriptions, where we have no current projects. The National Academy of Sciences' Institute of Medicine, for at least ten years, has recommended that the handwritten prescription be obsolete (or a very exceptional) practice within 3 years.
Studies vary, but written prescriptions, from initial writing to filling, tend to have error rates between 3 and 10 percent. Obviously, not all of these errors will have serious consequences, but many do. I believe that until liability insurers insist on the automated, error-checking electronic prescribing systems, their introduction will be random, due to the up-front cost. If the insurers require them, offer discounts when they are in use, or even finance them, then we will see widespread use and an incremental lowering of medical costs.
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Howard
*equal opportunity offense to both extremes*
January 21, 2007 10:30 AM | Reply | Permalink
I'm looking for a hero. And that's what I told my congressman in this letter:
Dear Representative ____,
Thank you very much for making time to talk to me this morning. .
Here are the questions I left you with – and I appreciate your willingness to answer:
1.Do you support health care for everyone?
2.How?
3.Do you believe that access to health care should be controlled by employers?
4.Do you think insurance companies are the most appropriate bill paying service for health care?
5.Is everyone in your family currently covered by comprehensive insurance?
6.What would you advise those of us with uninsured adult children? Cancer -- Diabetes (such diseases) can hit anyone at any age.
7.What would you advise if an uninsurable adult wanted to go into business for herself?
On the way home I heard a news report about President Bush's concern that people feel pressured to by "gold-plated" or "cadillac" plans – what do you think he means by this? Should those of us who aren't Federal Employees make due with a "ford" plan? And what would be covered by that?
I told you I was looking for a hero. You asked me what I would want?
Just Cover Everyone.
You could expand the Medicare system to include everyone and everything covered by Health Insurance (like you and I currently have.) I believe there are proposals for this very idea right now in both the House (H.R. 676) and Senator Kennedy's similar proposal in the Senate.
Let's keep it simple. Medicare works. We're already paying a Medicare tax. Let's just raise the rate enough to Cover Everyone. And then we can all stop trying to figure out whether we want a raise or glasses (well most of us can stop worrying about that).
I want to thank you again for taking the time to listen and answer these questions. I'm looking forward to hearing what you think.
Sincerely,
me.
January 21, 2007 10:32 AM | Reply | Permalink
Re: The average health insurance policy today is $11,000 per year
No frigging way. My coverage, through my employer (a major corporation and yes, this is an excellent plan) costs $440/month. Add in the dental coverage and it's maybe $525/month. Multiply that by 12 and you are no where near $11,000 a year. And again, this is a top-dollar, corporate health plan with excellent benefits, not some stripped-down good-for-nothing coverage. I don't know where that number came from, but it's way, way over-inflated.
On the larger question, Bush's idea is a good one, and i have never undersstood the rartuonale of not making individual policies tax-faviored just like employer plans. (If you are self-employed, there is some deductibility for health insurance, which has increased in recent years, though I don't know if it's at 100% yet). But no one should pretend that it's going to solve the problem or increase coverage more than martginally. And it will mainly benefit younger, healthier people for whom health premiums are affordable.
Re: As more jobs become contract (without significant benefits) and COBRA runs out, people with preexisting coverage, especially of older age, can't find coverage at any price.
Per the 1996 HIPAA law, an insurer cannot refuse coverage to people with pre-existing conditions as long as the person has not been without coverage for more than 62 days. (Exceptions exist when the person is liable for COBRA coverage or coverage under a spouse's plan)
As for contract jobs, in my own experience with this sort of work (I was contract most of last year until I was hired on permanently) most well-paying contract work does offer group health plans, but requires the contractor to pay for it 100%.
January 21, 2007 10:43 AM | Reply | Permalink
No plan, including Medicare/Medicaid, is perfect. Every plan will have to ration resources.
That being said, I'd also suggest looking at the Federal Employees Health Plan, a multipayor system where there is negotiation with benefits providers for the benefit of users, not employers. Both Bush and Kerry endorsed the idea of limited small-business buy-in, although nothing seems to have come of it.
This plan has many similarities to Hillary's, but there are important differences. Obviously, the Federal plan covers a large number of people and gains market leverage, but that is still quite different from the entire population.
The Clinton plan also criminalized certain forms of self-pay care outside the system. Many healthcare economists believe that those "boutique" offerings can be useful as tests of things that may be quite economical for the system as a whole. A good deal of the groundwork for free-standing surgical centers, for appropriate procedures, came from the self-pay cosmetic surgery sector, as well as dental care requiring more than local anesthesia.
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Howard
*equal opportunity offense to both extremes*
January 21, 2007 10:44 AM | Reply | Permalink
Re: A good reason for insurers to have been happy with employer insurance is the automatically selected healthy population--if you're sick you're not working.
This is hardly true. I have worked with people who were being treated for everything from HIV to breast cancer to paralyctic injuries. People who are too disabled to work are not going to be covered under Medicare or Medicaid anyway and are not in the insurance pool. (Yes, I know there's a year's wait for Medicare under disability)
January 21, 2007 10:47 AM | Reply | Permalink
Oops, Amend the above post.
I meant "people not working due to disability WILL be covered by Medicare or Medicaid..."
January 21, 2007 10:47 AM | Reply | Permalink
Re: It is the first issue, DNA analysis, that will be the huge problem.
In all liklihood insurers will be forbidden from using this sort of data, in fact they will probably upport such a ban themselves, knowing full well that they would put themselves out of business if they started requiring this fromn suscribers.
January 21, 2007 10:51 AM | Reply | Permalink
Wait a minute... right now, the premiums I pay through my employer are from pretax dollars. Why on Earth would I ever support a plan that would have me paying with after-tax dollars? The only scenario I could see would be one where, with everyone covered, the pool would become so large that rates would drop to the point that I'd save mroe paying with after tax dollars.
But, as a matter of principle, I shouldn't be taxed on money I spend for a necessity like health care. I'm a little radical on that point, I admit... I also believe that I shouldn't be taxed on rent, food and utility bills...
thosethingswesay.blogspot.com
January 21, 2007 10:54 AM | Reply | Permalink
I didn't mean to imply that it's perfect -- just that implementation might be relatively simple because it wouldn't be either a new tax or a new agency.
All that would be necessary would be expansion of the benefits and beneficiaries.
I know that there are 'better' ideas floating around. But, I'm tired of waiting for the perfect.
It's time to Cover Everyone.
January 21, 2007 10:59 AM | Reply | Permalink
As long as we have no political party that sees this issue as one of bringing health CARE to Americans as a human right but only sees it as a way to bring health INSURANCE subsidies to corporations we can count on any plan only achieving the goal for which it is designed: healthy corporations and healthy campaign contributions.
January 21, 2007 11:00 AM | Reply | Permalink
"Add in the dental coverage and it's maybe $525/month." Maybe it depends on where you live. Mine was more than that under COBRA, so I can only imagine what it would have cost me on my own for comparable coverage to my former employer's. (I did research alternatives, which led me to join an editorial freelancer's association, in case I needed an affordable plan.) I ended up taking another full-time job, remaining uncovered for about a month before that and, of course, a little over a month after.
John
http://www.haberarts.com/
January 21, 2007 11:05 AM | Reply | Permalink
And that's the point of the questions I sent to my Congressman. I just don't understand -- Are those people so special, so isolated that they don't know anyone who's uninsured or worried about insurability?
They act as if affordability is the issue -- what about access? If you're unisurable, can you afford MD Anderson for cancer treatment? If you can't afford it -- it's not even accessible.
January 21, 2007 11:36 AM | Reply | Permalink
I don't think that DNA testing necessarily requires any changes in law because everyone is equally at risk of being put on the "shit list."
Folks like Michael J. Fox get their drive from being victims who believe they can help make the system a better place for everyone...
DNA testing might actually change the priorities of the way we look at health care. For example, the American Red Cross has been criticized by many for being opportunists who make money off your sympathy and by selling your blood to someone else.
The "bigger conspiracy," if there is one, is the sitaution where people have insurance but can't afford to exercise their rights because the co-pays and deductibles stop them. Thus, their premiums go to subsidizing someone else who is able to pay those costs...
January 21, 2007 11:58 AM | Reply | Permalink
Unless their priorities have changed fairly recently, the largest part of the Red Cross budget goes to morale and welfare services for the US military, not blood services or domestic disaster relief. I personally don't object to my contributions going there, but I find the Red Cross misleading in its appeals.
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Howard
*equal opportunity offense to both extremes*
January 21, 2007 12:11 PM | Reply | Permalink
The $ll k number seems extraordinarily unlikely. Perhaps in New York or Mass. I haven't done these numbers for over a decade, but even so, this would reflect much more inflation than I can imagine. There were a number of years with relatively flat inflation. The average cost to Medicaid could reflect this because of the inclusion of the disabled and aged. The average cost to Medicare could reflect this because of the same; however, with the exclusion of of most long term care costs, it is unlikely. If private health insurance companies are taking in this amount of premium per person, they should be closed down today, this is worse than USURY.
Private health insurance tied to employment will never deliver the sort of care that people in the US want. Private health insurance tied to employment makes job switching very risky. Private health insurance tied to employment has the same effect as a regressive payroll tax. Private health insurance tied to employment fails to provide coverage for those who most need it. I could go on and on.
Public funded health care would be less expensive, less risky, and provide coverage to more people. The solution is to cut the insurance companies out. Insurance companies do well when they aggregate small sums of money and invest them to reduce risk. Most health care costs do NOT involve risk. They are very close to a certainty. In this circumstance, health insurance is an unnecessary transaction cost that distorts the situation. Government involvement would also involve a transaction cost and possible distortion. However, governance would be public and subject to public objectives, rather than performed for purely private objectives (profit for the insurance companies).
January 21, 2007 12:16 PM | Reply | Permalink
Given the high limits being discussed here it's unlikely your employer's health plan would fail to qualify for full deductibility. Bush is actually proposing something fairly progressive since only gold-plated, diamond-studded employer health plans (the kind that CEOs and other bigwigs have) would run afoul of the limits (assuming the limits are to be adjusted annually for inflation).
January 21, 2007 12:19 PM | Reply | Permalink
Well, I've lived in MI, OH and FL, and until a year ago I worked for a benefits admin company. I don't ever recall seeing premiums so high they would hit these limitations.
Earlier this year I shopped for individual coverage and found something for 215$/mo (I'm 39, with mild asthma; minus the asthma issue, that coverage would have been $165/mo)
January 21, 2007 12:22 PM | Reply | Permalink
Re: Private health insurance tied to employment makes job switching very risky.
Job switching is no longer a problem after the HIPAA law made it illegal to deny coverage when a person switches from one job to another (assuming comparable coverage at both jobs). Big problem is that people with health issues, and older people, are forced to remain employed at some kind of good benefits employer rather than taking early retiremnt or seeking self-employment.
January 21, 2007 12:25 PM | Reply | Permalink
Your view is short sighted. When you know that your current employer's benefits meet your need and you can only get the "official description" of your potential employer's benefits, you are taking a risk that you will encounter such problems as denial of benefit due to formulary restrictions, denial of benefit due to utilization review considerations, or denial of coverage because of unexposed extensive contract language between your employer and the insurer. You may also find yourself having to go through extensive and annoying screening processes to qualify for benefits you already have with your current insurer with no guarantee of the outcome. You may find benefit limitations that narrow your options or limit the quantity or quality of care you receive.
Coverage is not enough. HIPAA is feel good legislation, but it does not solve the problem
January 21, 2007 12:35 PM | Reply | Permalink
Let me clarify the contract aspect. When the work is through a large contract broker, especially on a W-2, there may be insurance availability. Do note, however, that the brokers mark up your billable time quite highly, to cover their cost of money (paying their employees promptly when they get paid in 30-90 days), profit, recruiting expense, etc.
From a pure productivity standpoint, I prefer to be an individual consultant, and I can get such engagements. Without the broker, however, only private insurance would be a possibility.
If the profit for health insurers where outlay is a near certainty (excellent point) simply adds to health cost, so can artificial broker overhead that may simply be an alternative to affinity-group insurance (which generally isn't available). One of my professional associations did offer coverage, but with huge preexisting condition exclusions, and still nearly $600 per month.
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Howard
*equal opportunity offense to both extremes*
January 21, 2007 12:37 PM | Reply | Permalink
The "affordability" stuff is a scam too. If you are the father of 4 kids and you lose your job, the choice may be between making the mortgage payment and covering yourself with insurance. You may delay the surgery you need to remain employable for the same reason. It forces people to sacrifice their long term health and life expectancy due to short term financial problems. It's based on the premise that only people who "deserve" health care should get it.
The Democrats are almost as bad as the Republicans. In fact, I blame the Democrats even more than the Republicans because their cowardice on the issue denies Americans even the option of voting for a party that will work for what people of the rest of the 1st world already has: the right to health care.
January 21, 2007 1:10 PM | Reply | Permalink
If you are going to work for a much smaller employer with questionable benefits then you may face some of these problems. However if your new employer has any sort of standard benefits plan with a recognized insurer then you aren't going to have a problem. Not only have I changed jobs a lot recently (six employers just last year; long story!) but I spent several years working in health insurance. I do not ever recall seeing any difficulty with job changes; as long as the new hire had the proper paperwork showing coverage dates within the 62 day limitation they were covered, period. At most, there might be a request to document any pre-existing conditions along with diagnostics performed and treatment received. (Additionally. I have an HIV+ friend who also changed jobs last year; again, no problem. He transitioned from old to new coverage without a hitch).
For job changes with comparble group benefit plans, HIPAA works as advertised.
Where it falls down is when people need to purchase individual policies under its provisions; here the hoops come out to be jumped through, and the premiums sky-rocket as a disincetive for those with pre-existing condition.
January 21, 2007 2:14 PM | Reply | Permalink
It always bothered me a bit (It is probably selfish envy) that I, a single person, was compensated at the same rate as a person with a family who got full coverage for the family at a rate of 3 times what it cost for me. At the time, 15 years ago, it was costing about $150/month for the company to insure me, while the family was costing $450/month. This was at a time when there was no employee contribution to the company health plan. I administered the plan, so I know the figures.
January 21, 2007 2:56 PM | Reply | Permalink
Oh! Ye of little experience!
January 21, 2007 3:25 PM | Reply | Permalink
The insurers use "experience based rating" rather than "population based rating", so the underwriting criteria have made it impossible, in my experience, for small businesses to get any coverage after renewal time.
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Howard
*equal opportunity offense to both extremes*
January 21, 2007 3:31 PM | Reply | Permalink
Howard,
In this case he is just wrong. I changed jobs from one state government to another state government and carefully checked a benefit for one of my children in the process. The second state government assured me the benefit was covered. It wasn't covered very well.
January 21, 2007 3:34 PM | Reply | Permalink
I think, like Social Security, Medicare taxes are capped to end at around $120,000. It would be better to raise the cap or eliminate it altogether. It might even be possible to lower the rate in that case.
Satellite Sky Blog
Find the Truth. Do Justice.
January 21, 2007 3:59 PM | Reply | Permalink
Sorry about the bad link re: the $11,000 insurance figure and it rising at twice the rate of inflation. It is now fixed, and here it is again: http://www.nchc.org/facts/cost.shtml
The original research is at the Kaiser Family Fdn: http://www.kff.org/insurance/7031/print-sec3.cfm
It's worth noting that the $11k figure is for a family (actually, $10,88). It's $4,000 for an individual.
January 21, 2007 4:18 PM | Reply | Permalink
Presumably those being treated were not hired in that condition.
January 21, 2007 4:42 PM | Reply | Permalink
On medical error, a New Yorker article sometime in the last couple of years looked at a hospital that specialized in hernia repair. It seems their complication rate is much lower then even the top teaching hospitals, leading to the conclusion that the staff had become an expert system, essentially. In other words, broad experience and stellar credentials were not a guarantee of an uncomplicated procedure, but simple practice and in-depth understanding of one area was such a guarantee.
January 21, 2007 4:50 PM | Reply | Permalink
Oh, practice applies everywhere. The single best predictor of good outcomes from cardiothoracic surgery is the number of procedures done by the team.
That being said, there still is a role for the teaching hospital in diagnosis, and often treatment, of the rare conditions for which no one will have much chance to practice. I can grab the typical 2000-page or so internal medicine textbooks, and I'd guess that at least a third of the conditions are never seen in an individual physician's career.
In emergency medicine, there are extensive tradeoffs between immediacy and skill. Perhaps one of the most important is reflected by a movement to start calling "strokes" "brain attacks", in that the general public realizes there is a window in which treatment of a "heart attack" can limit or reverse damage. For a substantial number of strokes, there is a significant chance of meaningful intervention within 3 hours of onset of symptoms, with 6 being about the point of diminishing returns.
The more common "stroke" is caused by a clot, and dissolving that clot is feasible and effective. A small percentage, however, are due to bleeding rather than clotting, and giving clot dissolvers would kill the patient. So, to make the call, you need a hospital with invasive neuroradiology capability -- threading a catheter to the problem area of the brain and doing what is necessary. Usually, that's dissolving the clot, but a surprising number of bleeds can be fixed through a catheter.
Some bleeds are going to need immediate surgery. In other cases, it may be possible to do something such as putting magnetic powder on the hole, and then applying glue through the catheter.
None of these advanced techniques, although they can be cost-effective, are going to be available to people too far away from the facilities with the skills and equipment.
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Howard
*equal opportunity offense to both extremes*
January 21, 2007 5:43 PM | Reply | Permalink
So consider that for fifty bucks you can print any rastered file at incredible resolution, and for a few hundred bucks you can factor pi to a few million decimal places, if you want.
When a common home or business device is a multi-use medical scanner the cost of intervention will drop and survival rates will go up. A large cost in scanning is the art of interpreting the images. When this is no longer an art, that cost will drop, too.
A good example of art becoming mere technology is art. that is, flat art. Even a good photographic print was somewhat artful until the last few years. I've retired my darkroom in favor of Photoshop and Epson printers. Another example is in music, where the delivery of pleasing sound is not a learned skill but a CD player. Original content is another story, but not the one I'm relating.
However, for now, if the needed fix for a personal condition is custom-grown tissue or viral-vectored genetic alteration, any a priori knowledge of genetic predisposition will be an incredibly valuable piece of information for insurers or other health providers. And when something is valuable enough it will lead to acquisition. Laws excluding the use of such information (wothout permission) will be needed.
January 21, 2007 5:58 PM | Reply | Permalink
There is, indeed, some experimental work with telepresence neuroradiology. I don't see those scanners ever getting into the home, due to radiation or magnetic field hazards. Making the interventions available at remote emergency rooms definitely is a possibility.
Art is indeed a challenge. I'm still hanging onto my enlargers even though I don't have a darkroom, as I prefer black & white, and often large format, photography. With Kodak stopping production of black and white enlarging paper, I still see it as a viable niche market. Digital backs for view cameras are just not affordable other than for heavy commercial use.
Still, I've been getting back to drawing, with charcoal, pencil, pastels, and colored pencils. It's been many years, and I don't know if my eye or coordination has gotten better, or what is happening -- I'm producing things that have much room for improvement, but that I can see are much better than in my high school art minor 40 years or so ago.
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Howard
*equal opportunity offense to both extremes*
January 21, 2007 6:17 PM | Reply | Permalink
Granted that a good scan of a sharp 4x5 shot with 20 line pairs/mm lens res (e.g. Rodenstock) is about a 400 Mb file, it is not quite replaceable by affordable chips.
But persuading the enlarger to get the whole piece of film in focus is a bitch. With the art papers available and dedicated B&W inks for inkjet really fine printing is being done by art photographers.
On scanning, the MRI behemoths will yield to lower-energy approaches eventually. It's a signal-to-noise issue, which may yield to data processing tricks, like stochastic amplification. Or, perhaps more likely, systems will emulate our brain's processing and not look for the obvious, but be designed to notice anomalies. A big help will be a reference scan, perhaps done overnight while you sleep, hais kept up-to-date. This can be done at higheres and lowerower given the long scan time. If a felt symptom argued for a fast scan, a low-res image subtracted from the reference image should show changes.
Right now scanners are like traditional cameras---they don't know what you want to frame, so they image everything equally. New cameras are getting smarter (long way to go). Scanners ditto.
January 21, 2007 6:45 PM | Reply | Permalink
Agreed that focusing is a challenge, but I have to look at the incremental cost of that 4x5 high-res scanner and printer compared to rebuilding the wet darkroom. *sigh* someone else can do my negative processing, but I've always felt magic when the image first pops out in the developer tray.
You may be amused, with respect to today's medical imagers, with an acronym popular among quite a few physicians: VOMIT:
I hear this most often from distinguished trauma surgeons railing at people that want more and more scans, as opposed to going to the OR and taking a look -- and then taking needed action. On my mailing lists, there's a case of a confusing imaging artifact (or blood test) every few days.
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Howard
*equal opportunity offense to both extremes*
January 21, 2007 6:47 PM | Reply | Permalink
Well, the newer digital cameras take great snapshots, but did not at first. In the begining they were harder to use, with confusing options, etc. Some of that is happening with medical technology. It's a design issue, with experience leading design, eventually. Our brains know what is wrong with a normal picture--exposed tissue:bad. The scanner doesn't show a picture that we can instinctively interpret.
The best way to fix that would be to have false-color presentation that triggered instant recognition. An example would be the system showing blood leaking out of smooth roughly parallel boundaries (i.e. venous) as red, but ignore the venous blood as superfluous data. Alternately, when searching for flow blockage the view would show venous blood as red, and higher densities surrounded by red (i.e., clot) as a contrasting color, or black. This should be available as a settings change, not a new scan. CAT's are colored, but I know that most x-ray evaluation is simply looking at film, or digital projection, in B&W. Spectral data is essential. Scan interpretation is too much art. Think about Photoshop's Magic Wand, a selection tool that instantly draws boundaries, depending on sensitivity.
Developing film is the easy part. Much easier than a decent omelette. A 4x5 scanner costs less than a decent enlarger used to. I develop color film in hotel rooms, to evaluate the night's work, when on astrophoto expeditions. Unfortunately, we are reduced to one supplier for small-quantity chemistry kits.
B&W chemistry is still widely available and cheap (and easy). Especially with digital editing, being off on temperature really doesn't matter anymore. Haul that box out and get thee to the mountains (or desert, or whatever). I have a design for a small developing tank suitable for traveling with 4x5 film--handles four sheets, and only needs a pint of liquid. I made mine out of 1/8" PVC. Just a jigsaw and file job.
January 21, 2007 7:41 PM | Reply | Permalink
Re: Presumably those being treated were not hired in that condition.
Yes, they were. My HIV+ friend has been HIV+ since the late 90s. He has had four different jobs, and no issues with changing coverage.
As long as you go from comparable coverage to com,parable coverage there are, simply, no problems, beyond some possible paperwork issues. The HIPAA law works.
January 22, 2007 3:03 AM | Reply | Permalink
Re:It's $4,000 for an individual.
???
Where are getting $4000 from? The info I've sen on this gives $7000 as the individual limit
January 22, 2007 3:06 AM | Reply | Permalink
Look, children are cheap, I mean dirt cheap. Under almost all circumstances you can find a way to transfer disabled children to the government. Remember that SCHIP programs cover children up to 300% of poverty in many states. Once you figure in the generous income counting rules, this is more like 400% of poverty or more, way more than half the population.
Younger men who don't drive recklessly and don't play with guns are also cheap. Younger women are expensive because they are fertile. It is not until you get to the mid-40s or later that this changes for a substantial portion of the population.
Rough it out at $1k per child and $1k for the man and $5k for the woman + another $2k for risk (the real insurance part of insurance). OK, if that is the deal, it comes to $10k (close enough to the $11k to be on target). As the family ages, the man will cost more, the woman will cost less and the female child will become fertile.
But this is private insurance costs. Medicaid could deliver for at least $2-4k cheaper (remember, Medicaid is going to get the real risk, that is the disabled child, anyway). Private insurance overhead is 15-25%, while public insurance overhead is 5%.
Also, keeping in mind that insurance is about RISK. Medicaid is already covering the OTHER RISKS. GUN tragedy and AUTOMOTIVE tragedy. Sure, insurance covers some of it and when the risk is relatively small, insurance covers it. But when the risk turns into lifelong dependency, Medicaid pays for the long term care.
Insurance is not really INSURANCE. It is an accounting process with a huge management premium.
January 22, 2007 7:21 AM | Reply | Permalink
I just looked at my last paycheck, which helpfully lists the employer contribution as well as my own for all my benefits. The total cost for family medical coverage is $519.90 every two weeks, plus another $102.29 for dental (I pay only $151.46 of those premiums). That comes out to $16,176/year (of which I pay $3,937.96). If they only covered me, not my family, it would be $8,301.54/year (and I would pay nothing).
January 22, 2007 11:55 AM | Reply | Permalink
What if there is a break in employment and COBRA runs out?
January 22, 2007 12:50 PM | Reply | Permalink
I've had to pay more than that under COBRA. I had been working for a small company that was not able to get good rates because one of the employees had a severe heart problem.
The insurance companies are simply transferring their risks to individuals. In this case, the way the risk was allocated to me makes no sense.
Meanwhile, I was not in a good position to afford that kind of expense. My mother-in-law had high costs for long-term care, my wife was unable to work, and I was trying to make a transition to a new field of employment after the company I had long worked for went out of business, leaving me with a worthless ESOP.
Job switching is a big problem if you are forced to change fields to keep up with technological changes.
January 22, 2007 1:33 PM | Reply | Permalink
Much as an experience of mine. I've had a long consulting relationship with a small firm that offered to take me on as an employee so I could get health coverage. As soon as my records were sent to their underwriter, they were informed that if they hired me, their premiums would immediately be doubled, but they would not be renewed at anniversary time.
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Howard
*equal opportunity offense to both extremes*
January 22, 2007 1:34 PM | Reply | Permalink
Now we are talking about areas where HIPAA is fairly useless. All I claimed was that when changing jobs with comparable coverage under reputable insurers people with pre-existing conditions were unlikely to have any trouble greater than a bit of paperwork.
I always admittred that individuals seeking individual policies under HIPAA were at a disadvantage because, while the insurer must generally insure them, nothing prevents the premiums from being jacked up so high that no not named Trump or Gates can afford them.
January 22, 2007 5:18 PM | Reply | Permalink
Re: Are you sure your employer isn't picking up part of the cost?
My employer is picking up most of the cost. I'm paying $62.5/mo for medical plus $24/mo dental to insure both myself and a domestic partner. Because there is no tax break for insuring domestic partners, my pay stub shows the premium paid for my partner under both coverages as "imputed income" on which I pay both income and FICA taxes. It is from this number (which does in fact include both medical and dental; I was wrong about that above) that I derive the monthly cost of 440$ a piece. That's actually higher than what I've seen in the past (I worked for a benefits admin company until about a year ago so I do know real numbers, albeit getting a bit dated now) and that is probably due to the rather generous nature of the coverage. My COBRA after leaving the benefits admin company last year would have been $280/mo (I found another job in days and so did not need it) and four years ago I was paying 190$/mo for COBRA.
Either some people here are in very cost insurance locations, or there is a lot of disinformation about the cost of group rate policies. Note that I say "group rates"; an individual policy can cost anywhere from $120/mo (for a young and healthy individual) to well over $1000/mo for someone who is past middle age or burdened with serious health problems.
January 22, 2007 5:27 PM | Reply | Permalink
Re: Oh! Ye of little experience!
I worked for a benefits admin company until last year. I know a good deal more about the ins and outs of health insurance than a great many people here. Sorry if that sounds like boasting, but I think I do have some credentials in this area and am not just blowing smoke.
January 22, 2007 5:31 PM | Reply | Permalink
That doesn't mean you know everything you think you know. I have been well connected to health finance for 25 years myself. Look at my comments and think about it. Still, with CAREFUL attention to matters of benefit transfer, I managed to get burned. You assert you know more than you do.
January 22, 2007 6:22 PM | Reply | Permalink
In a nation of 300,000,000 people some people will fall through cracks no matter what. You were unlucky, and probably there is some factor involved you have not mentioned. In the majority of cases of job changes involving comparable coverages under reputable insurers people do not get burned.
January 23, 2007 12:16 PM | Reply | Permalink
I keep hearing your defense of an employer based system. There is a distinct trend to self-employment and individual contracting.
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Howard
*equal opportunity offense to both extremes*
January 23, 2007 12:30 PM | Reply | Permalink
Since there are plenty of people at this site more knowledgable than me on this subject, I would appreciate some more insight on why we have employer-based health insurance.
I heard an interview on Public Radio not long ago in which it was said the Social Security was originally set up in a way to surreptitiously exclude black people, because it excluded farm laborers and domestics, who were mostly black. I wonder if employer-based health insurance has this effect and whether or not it was historically intended that way, or perhaps there were other considerations. I think I have heard that organized labor favored employer-based health insurance, but it is not clear to me why that would be the case.
January 23, 2007 1:29 PM | Reply | Permalink
My understanding is that it's an artifact of wage and price controls during WWII. Benefits were not covered by wage controls, so employers could offer what, at the time, was a relatively inexpensive benefit to be more competitive.
In fairness, Henry Kaiser did want to focus on a healthy workforce for productivity, and created a very prevention-oriented HMO. His vision was a not-for-profit service.
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Howard
*equal opportunity offense to both extremes*
January 23, 2007 1:32 PM | Reply | Permalink
That is very interesting. I wonder if the effect of collective bargaining might have been a factor - that is, organized labor got benefits where organized labor happened to be versus people who were not organized did not get the benefits.
January 23, 2007 2:33 PM | Reply | Permalink
red herring alert!
January 23, 2007 3:44 PM | Reply | Permalink
I have rated you 1 because I am not convinced you are a troll, although I am also not convinced you are not a troll.
Faith-based reasoning starts with a conclusion and then modifies either the facts or the logic as necessary to retain the conclusion. Post-1300 "modern" or "scientific" reasoning allows the consequences of facts and logic to lead to the conclusion however uncomfortable it may be.
Your previous posts were indeterminate although inching towards faith-based reasoning. This last post makes the leap.
January 23, 2007 3:52 PM | Reply | Permalink
What does it take to get herring in sour cream or in white wine sauce into the mix? Tomato herring just isn't at the same level.
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Howard
*equal opportunity offense to both extremes*
January 23, 2007 3:54 PM | Reply | Permalink
I don't know the common logical colloquialism for obstrufication, but if I did, Howard, this would not be the first time I would have to issue an alert for it after your post.
January 23, 2007 4:01 PM | Reply | Permalink
Excuse me. Apparently, my white and silver herrings were off topic, where your herring in tomato sauce, with no further elaboration on why you thought the prior post fishy, was not.
Personally, I found the question of the role, if any, of collective bargaining in getting the insurance benefit a very interesting one, to which I don't know the answer. Kaiser was an exception.
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Howard
*equal opportunity offense to both extremes*
January 23, 2007 4:08 PM | Reply | Permalink
During parts of WWII wage controls prevented raises, so employers provided indirect raises through benefits (to prevent employees from getting "raises" by moving on to a different employer). In 1943 the IRS ruled this health insurance premiums are not counted as income for the employee. It was the "pretax" nature of the game that led to the growth of employer paid health insurance.
Because the premiums are roughly equal (by class) for all employees and because the premiums are effectively deducted from wages (in economics speak, the incidence of the premium falls on the employee), the EFFECT of employer sponsored health insurance is identical with a REGRESSIVE tax, because lower income employees pay a higher proportion of their income to premiums. This is a SECOND regressive effect beyond the REGRESSIVE effect of sheltering the cost from taxable income which also benefits high income employees more than it benefits low income employees.
Employer sponsored health care is a bad deal for poor people. It is also a bad deal for the state, who still shoulders the burden of the large risks in society (gun violence, permanent disability from injury, extended illness, developmental disability). Health insurance is a scheme that keeps all risk at bey, but claims to be insuring against risk. It would be better labeled as health intermediaries with outrageous power to (1) charge management fees and (2) interfere with health care decisions.
January 23, 2007 4:16 PM | Reply | Permalink
Pardon if I have offended. My comment was intended to be friendly. the issue of unions in rise of employer paid health care seemed (to me) likely to be leading to an anti-union message. I was probably wrong.
January 23, 2007 4:24 PM | Reply | Permalink
In point of fact, I have hoped to get more information here about unions and their possible relevance to me. My limited exposure to organizers seemed to suggest that they were looking just for one more shop to have one more job action; they came across as looking for power rather than offering something to potential members. I've also had problems when certain technical areas (e.g., network cabling) were perceived to infringe on the rights of the electrical workers.
In contrast, I've always had pretty good relations with people in the Communications Workers, who don't seem nearly to be as hostile to engineers as IBEW. I know that I don't have a clear picture. While I am concerned with corporate excesses, I simply don't know if unions are a useful counterbalance for people such as myself.
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Howard
*equal opportunity offense to both extremes*
January 23, 2007 5:37 PM | Reply | Permalink
I have mostly anecdotal experience and opinions to offer. It is my experience (I am at the moment a union member, across my career I have spent substantial time both as and not as a union member) that unions tend to improve some aspects of employment while worsening others.
For example, my employer was many years delayed in using EFT to deposit paychecks because my employer wanted to make it a negotiable matter. The fact that EFT benefited the employer as much or more than the employee finally led to an end of the delay, but you can see the nonsense. Union employment can create a lot of this crap.
On the other hand, unions tend to provide better job security and, under some circumstances, better benefits.
Unionization must be viewed in counter-distinction to union "leadership." I have seen very little in union leadership to recommend these people. They combine the worst aspects of corrupt politicians with the worst aspects of low performing employees. I am afraid my justification for these comments would violate my anonymity rule and/or would run into intense ranting.
January 23, 2007 8:49 PM | Reply | Permalink
I ghave no where defended the employement based system. In fact I believe we need to move away from it.
January 24, 2007 9:25 AM | Reply | Permalink
Are you replying to my post? Are you even on the right thread? I don't recall introducing or referencing religion in this discuission in any way, nor relying upon faith (I cited real world experience in fact, which is an appeal to empirical and inductive thinking; do you call that "faith-based"?).
I will have to assume that you replied to the wrong person, or are on the wrong topic entirely.
January 24, 2007 9:28 AM | Reply | Permalink
Correct me if I am wrong, but it seems that all the examples where people had no trouble continuing coverage involved from going from one employee situation to another.
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Howard
*equal opportunity offense to both extremes*
January 24, 2007 9:30 AM | Reply | Permalink
Yes, and that is a defense of the efficacy of the HIPAA law only, not of the system in general.
January 24, 2007 10:23 AM | Reply | Permalink
This post does not deserve a 1 rating.
January 25, 2007 2:42 PM | Reply | Permalink
I'll be the first to admit that, unlike some on this thread, I DON'T have any experience with the insurance industry and am not a tax analyst. I am concerned about this plan on a personal level based on my reasearch, which admittedly has been limited thus far to CNN Money and NPR.
Here is my issue: I think it's pretty clear that a mere tax deduction is only going to help a fraction of the millions of Americans without health insurance get any sort of insurance, and is no guarantee that this insurance is going to be worth a d*mn. At the same time, it's probably not going to really affect the very rich. Who seems to get squeezed out here is the middle-middle to upper-middle class- people who, for example (and okay, yes, I'm being selfish here) are government employees or still manage to hang on to decent unionzed jobs. So the only way it seems to be making taxes progressive is by lowering the common denominator of the middle class.
I'm posting a blog entry about this. If I'm wrong, will somebody please tell me how? Thank you!
January 25, 2007 2:56 PM | Reply | Permalink
It's an insult, I'd say. Any gold plating is on the expensive test systems (some owned by doctors) that charge prices like $30,000 for a scan.
If someone can't afford insurance a deduction is at best a modest discount, and at worst no help at all. And those at the bottom get zero help from this, as usual for this admin.
Obama said it--it's time for universal health care. It will inevitably start a discussion over what is necessary care and treatment, but that is needed, and insurance companies already make those decisions without the input of voters.
There is no worry that a universal system would eliminate private medicine. It is not credible that that would ever be prohibited. But the savings of eliminating layers of profit-taking and management clutter would make for an overall decrease in the total spent. And easy-access free clinics would free up emergency rooms, while easy available preventive care would decrease costs overall and help suppress epidemics.
January 25, 2007 3:28 PM | Reply | Permalink
Just out of curiosity, what kind of scan costs $30K? Something highly invasive like cerebral angiography? That sounds awfully high.
The point of easy access to clinics cannot be overemphasized. Some of the reasons that emergency rooms are overused, by the poor, for primary care, is that they are 24/7 for people with no sick leave, typically are fairly accessible by public transportation, and do not go into complete shock if an entire family is in the waiting area (thus eliminating the need for child care).
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Howard
*equal opportunity offense to both extremes*
January 25, 2007 3:38 PM | Reply | Permalink
"faith based" refers to your unwillingness to consider evidence.
January 25, 2007 7:09 PM | Reply | Permalink