Health Care Reform Part 1

It's the elephant in the room: health care reform. Conservatives have been dreading this for years. Liberals think this has been long over due. But launching a universal health care system in a capitalist system is going to be a challenge.

Let me start by saying that I think health care reform is needed - the United States spends more on health care than any other developed nation in the world, and yet our health outcomes are not where they should be. Given the sheer size and diversity of the population, universal health care in the United State is not going to be an easy task.

There are also many contributing factors to health, and health care is just one of the many variables.

This topic is incredibly complex. Since it deserves more than one entry, I'm dividing this up into segments. This first segment will be about health insurance reform.

Currently, the US has an entrepreneurial system in place. Private insurance companies offer health services to those that can pay premiums, and Medicare and S-CHIP are government run programs that provide needed care to individuals that cannot afford the private insurance, or who are unable to obtain insurance through their companies. However, this model clearly has drawbacks: a large portion of Americans (roughly 40 million) are currently uninsured.

Legislation passed in the Senate today proposes to (1) expand Medicaid, (2) provide tax credits to help low and middle income people buy coverage, and (3) creating health insurance exchanges for small businesses and companies. Employers that don't offer coverage will be required to help pay for the government subsidized insurance. Consumers also cannot be charged more or denied coverage for pre-existing conditions, or become dropped when they are sick. The bill also caps annual out of pocket expenses, and places higher taxes on insurance policies and new fees the health industry.

I support the bill's attempt at providing health care for all citizens. However, as with any health care reform bill, there are several issues with the bill.

The projected cost of the bill is $829 billion over the next ten years. Since it establishes a cap on out of pocket expenses, federal spending technically should decrease because they can't spend more than the cap allows. The bill also places a tax on health insurers, pharmaceutical companies, and medical device companies.

Why is the government placing taxes on industries that are just going to shift the cost over to the consumer? In an ideal situation, the companies would just pay the taxes without any substantial increases in fees. But this is the real world. In the automotive industry, Japanese car companies build the import tax into the cost of the car. Who pays for it? The consumer. Taxing medical device companies, drug companies, and insurance companies may simply raise the prices of the goods they already deliver. And since hospitals, doctors, and yes, patients use all of those products, the average consumer is going to have to pay for those increased taxes and costs. And since there are going to be tax credits available for purchasing private insurance, the companies won't have to feel too bad about increasing costs.

And is expanding Medicaid without prior reform really a good idea? Medicaid is a state run insurance program that is projected to go bankrupt, some say as soon as 2019. Do we really want to expand a program that currently is not self sustaining?

Another issue with Medicaid is the reimbursement process. Medicaid pays doctors for a portion of their patient expenditures. That means that if a doctors spends $20 on one test for a patient, the doctor may only get $18 back for that particular patient. This means that facilities that take a large number of Medicaid patients must over charge on other items or services, otherwise they run the risk of falling into the red.

Keep in mind that health care is a 24/7 operation, often involving specialty equipment, sanitary conditions, and highly skilled personnel. If funding is low, operating costs usually come out of employee paychecks, meaning that these facilities may not be able to retain quality employees. Hasn't anyone noticed the current worldwide nursing shortage? Or the fact that there is a projected physician shortage? If Medicaid is going to be a primary funding source for hosptials and clinics, medical staff need to be reimbursed for their patients at cost, not below cost.

Formation of a universal health care program will not guarantee that all people who qualify will enroll. Current enrollment in Medicaid does not include all individuals that qualify for the service, and the qualifications for each state vary. Unless the default setting is automatic enrollment in Medicaid with an opt out option, there is no way to guarantee universal enrollment. If the default option is not Medicaid enrollment, then the enrollment process needs to be simplified. Medicaid paperwork needs to be redone so that individuals with low English proficiency or low literacy levels will be able to access and complete the paperwork. Medicaid qualifying standards should also be more easily located.

That's all for now. Stay tuned for part 2 of the health care series.