From our perspective, the new health care reform bill has the greatest impact on our business and our employees which is the main reason we decided to address this issue first. Like so many laws proposed by Government, this one fails to address the true concerns of most Americans – the inability to afford good Health Insurance and the costs that drive up the price of coverage. In their own words, the cost of health insurance is not going to go down but will go up at a slower rate – Senator Dick Durbin, March 10, 2010, how does this help Americans who cannot afford insurance now to get it?
As time passes, we are learning more and more about what is in the bill and how it is designed to destroy private health insurance options. Once the private companies are forced out of business, Americans will no longer have any other option but to get on a government plan. There are several provisions in the law that will tax employers who offer “Cadillac” plans, who don’t offer insurance at all, or offer plans that cost more than 10% of the employee’s salary. Here is an example of how the middle class will be affected by this law:
John Smith is married to Susan Smith, a stay at home mom who takes care of their two kids who are both under 4 years old. John makes $40,000 per year plus benefits - family health coverage plus dental. This package costs his employer $12,000 per year (23% of John’s total employment package). John’s employer will now be forced to pay a tax on these benefits of approximately 6% of the total compensation or $3,120. It will be less expensive (and less hassle) for the employer to eliminate the benefits package, pay the fine for not offering insurance ($1,000/employee), give the employee a raise and send them off in to the market to get insurance on their own. The raise will not be enough to offset the cost of getting private insurance on their own so they will be forced in to a government subsidized plan.
The President said nothing will change with this law and that we would be able to keep our plans if we liked them. This law has been designed to make employers the “bad guy” by allowing the President to blame the corporations for getting rid of the insurance coverage. The law has been interpreted by many that the intention of the law from the beginning was to give the government more control over our lives and not to help the middle class as has been purported.
In order to have true health care reform and bring down costs so that it is more affordable for all Americans who want to have health insurance, there are several steps that must be taken. First and foremost the current bill must be repealed and begun again. The new bill must address the following points or it will do nothing to reduce costs and increase affordability.
1. Require states to allow insurance companies to offer catastrophic coverage along with their other minimum plans. Catastrophic coverage will allow people to buy plans at a very affordable rate that will cover issues such as heart attack, cancer, traffic accidents and such while paying for normal care (doctor visits, prescriptions, etc.) out of pocket.
2. Allow people to purchase insurance across state lines (so long as each states mandates are met). There are over 1,300 insurance companies in the United States so competition should not be an issue. Government interference is overly inflating costs of insurance, not helping to reduce it. A public option that increases the debt of the nation, or taxes one group for the benefit of another is not necessary at this time.
3. Tort reform is an absolute must. While the cost of lawsuits in and of themselves may not have a significant impact of the cost of health care, the reduction in malpractice insurance will increase the number of doctors who either return to practice or get into the medical profession due to their reduced costs. This was the result in Texas after they implemented tort reform, the number of doctors and the access to care significantly increased. Significant reductions in cost will be achieved by reducing the number of doctors practicing “defensive” medicine by running unnecessary (and expensive) tests.
4. Create standardized forms that all insurance companies and hospitals use. This will significantly reduce the administrative costs of providing care to all parties. It should also increase the timeliness in which care is given.
5. Increase the portability of insurance coverage. By creating standardized forms, this should make it easier for employees to carry their same plans with them when they switch companies.
6. Allow everyone access to Health Savings Accounts which will give them greater control over how they allocate their own health care dollars.
7. Require all insurance companies to create a pool of money to cover pre-existing conditions at affordable rates, similar to high risk insurance pools for automobile coverage. One of the requirements for patients with pre-existing conditions must be requiring continuous coverage once the condition is discovered.
8. Immigration reform is an absolute must. Illegal immigrants cost the country over $200 billion per year in health care costs. There are several steps that need to be taken in order to address this issue and we will cover them in another post.
9. Without addressing the basic laws of economics, specifically supply and demand, any law passed will not be successful in reducing costs or improving access and care. A joint venture between public and private enterprises can address this key issue without costing the tax payers any more money. By utilizing the remaining stimulus money, approximately $400 billion dollars, the government can build (and fund operating expenses for the first 5 years) approximately 100 new medical universities and research centers with hospitals attached to them. They can also build and fund another 100 general hospitals that provide care throughout the country. The key to the long term success of such a program is dependent upon partnering with private entities to run the hospital like a business with tight control on expenses, costs and reducing waste. The medical universities will increase the number of doctors, nurses and administrators. Without increasing the number of people providing care, the addition of 30 million people to the health care system will overload a system already on the verge of collapse under its own weight.
By implementing these ideas, overall care will be improved, costs will decrease and the employment rate will decrease by putting tens of thousands of construction workers back to work. The unemployment rate will be reduced again by all of the new businesses that will be created to service the needs of the new hospitals and universities as well.