Close Close
Popular Financial Topics Discover relevant content from across the suite of ALM legal publications From the Industry More content from ThinkAdvisor and select sponsors Investment Advisor Issue Gallery Read digital editions of Investment Advisor Magazine Tax Facts Get clear, current, and reliable answers to pressing tax questions
Luminaries Awards

Life Health > Health Insurance > Health Insurance

6 feverish notions for fixing health care reform

Your article was successfully shared with the contacts you provided.

National Underwriter has covered the healthcare transformation in this country intensively since before it was a glimmer in the Democrats’ eye, through a long and intense political battle, through the many legal and legislative challenges the Republicans threw at it afterward, and to the present, through an uneven implementation period. And during all of that time, we have tried to remain objective about how we cover an issue of such massive importance to the country, and to our readers, whom the new law affected directly (and for the most part, negatively). We often were excoriated by readers for failing to excoriate the legislation itself, as if to say that failing to attack the law is by default, supporting it. That is not the kind of binary logic journalists adhere to (unless you’re part of a cheerleading squad, like MSNBC or FOX News), but there you have it.

What was interesting about the angry letters we received – and most were addressed to me personally – was that the letters usually had little to say about our actual coverage or the tone of it, and instead went into what the reader found most distasteful about Obamacare. A lot of these letters just hated how the law overturned their business. Fair enough…one of the things I found most worrisome about the law was how it decided that if anybody could afford to take a kidney punch over this, it was the insurance industry. And not just any part of the insurance industry, but its agents and brokers, the ones who were contributing the least to the sincerely messed-up state of health care delivery in this country. But I digress.

Another common complaint was that Obamacare was socialist. This always got under my skin because the word socialism has been co-opted from what it originally meant, as a political term. In political science, I was told that socialism, as a form of government, is when the government owns the means of production. Venezuela is a good example of a bad socialist country, as the petroleum industry is owned by the government, and the regime there uses its petrodollars to suppress dissent. Costa Rica, on the other hand, is a good example of a good socialist country, as the petroleum and health care and education industries are all state-owned, the country maintains no standing army, and its primary export is for people to enjoy one of the world’s last remaining virgin tropical rainforests. Seriously, Costa Rica is a wonderful place. Please go visit it. But I digress again.

Socialism, in an Obamacare context, has been twisted into meaning “too liberal for my own tastes,” which I wouldn’t mind so much if the word wasn’t seemingly chosen to liken liberal politics with scary foreign ideologies. You know who else were socialists, don’t you? That’s right…the Nazis. It’s that sort of thing. Obamacare is a lot of things, but it’s not a stepping stone to totalitarian control. Even if the government really wanted to inflict that kind of tyranny, it would hold a once-and-done vote on it. Voter turnout is so low the thing would be carried by about a thousand votes, either way. But, I digress, yet a third time.

Normally, I’m more focused than this, but I have just come off of a four-day stint of one of the nastiest viruses I have ever encountered, and it has left me feeling like a husk of my former self. It started last Wednesday – a week ago from today – when I went to my mixed martial arts class and started doing push-ups, only to note that my shoulders felt like I have been doing bench presses all day, when I had not been. The following day, I was such a zombie in MMA class that when we put on our pads and sparred, I might as well have written the words “TRAINING DUMMY” across my headgear. The next day, the fever sweats came, as well as a full body ache. And then, the headaches. Imagine if a giant pressed thumb into your temple as hard as he could for about five seconds. And then he repeated it for a total of three or four times a minute. And then he did that for the next three days. It was like that. There was virtually no eating. There was no meaningful sleep. (And during what little sleep there was, where were disturbing fever dreams of such wild variety, I consider it a kindness that I really can’t remember any of them.) There was a constant quest for the maximum safe daily dosage of ibuprofen and any other home remedy that might relieve the pain. By Monday morning, if you told me that sucking on a frog’s leg would relieve the pain, I would have had one in my mouth faster and more enthusiastically than one of those old-timey rainbow lollipops.

When I finally saw the doctor on Monday, they couldn’t’ tell what was wrong with me. Might be a virus, they said, but no clue which one. All they could do was take some blood to make sure it wasn’t Lyme’s Disease, and give me some antibiotics in case it was some kind of ear infection. I was in so much pain at that point; I was unable to make many sound decisions. I took the script to get filled and my end came out to a paltry $10. But the medicine was $160. This is why having health coverage is fantastic, and why it is worth paying what I pay for it.

But what if I didn’t have it? Then I was out another $150. No biggie, really. I do not get sick often, and at this point in my life, I can afford the very occasional $150 unexpected medical fee. But as I took a hot shower that night, and as the pain momentarily subsided, I thought, what about people who couldn’t afford that medicine?

And that brings me back to another area of complaint we often got when it came to Obamacare. It was on the edges of the socialism complaint and the argument was, essentially, that it’s unfair that people who work hard and pull themselves up by their own bootstraps should have to pay so that people who haven’t worked as hard can enjoy something at the expense of others. In short, Obamacare isn’t fair.

I have friends who are small business owners. And they are beyond angry at what Obamacare imposes on them. They hate that the government is having any say at all in how they take care of their employees. And these are folks who very much like to think of themselves as people who built what they have with their own hands. In cases that is true. In some cases, that is not. But they too rail against how unfair it is that they should have to work hard for what they have – including access to decent healthcare – and that someone who has not worked as hard automatically gets a free pass.

The thing about health and sickness is that sometimes, you can manage your health and prevent sickness. Sometimes, you cannot. I am, all things considered, the healthiest I have ever been right now, but I was still unable to stay clear of a nasty virus that sidelined me for four days, solid. What if my employer fired me for that? What if I was unable to pay for the medicine needed to make me better? What if my efforts to pull myself up by the bootstraps were sidelined because of my illness? How fair is that?

It isn’t. Life isn’t fair. It never was. It never will be. Life is the most unfair contest of all. The best we can do is to find our way through it making the most out of the advantages in our deck and fighting our hardest against the problems that arise.

The goal of Obamacare was to make it so that anyone, regardless of means, could afford to get health care, and that is a faulty premise. It is nobly intended, but faulty all the same. Because when you have a fee-based service delivered by professionals who are bound by an oath to deliver that service whether their clients can afford it or not (i.e., the Hippocratic Oath), and when that service is ultimately financed by different professionals who are also seeking profit, but who are not bound to any kind of altruism motive, then you have a fundamental disconnect. You also have a system where – no matter how hard you monkey with it – it is a system where you get what you pay for. Obamacare has succeeded in creating plans that just about anybody can afford. But one look at these plans will tell you that those who are buying them are buying not much of anything, really. They are covered, but in the same way that a person with an umbrella is covered when that umbrella is missing seven of its eight cloth panels. You still end up getting soaked.

What Obamacare never addressed is the actual cost of health care, which is something for-profit insurance has actually been doing something to contain. But even here, were Obamacare to have never addresses health care funding and focused everything on health care cost, then the screams about socialism would have been even louder, and from a different industry. And still, there would be the same disconnect. Medical device companies have no Hippocratic Oath. Nor do pharmaceutical companies. You can’t square that circle unless you get the for-profit side to go not-for-profit or the not-for-profit to go for-profit, and then heavily regulate the whole lot, cost-wise. The third option, which is to nationalize the entire industry, is something nobody really wants.

So what, then? There are only two options, as I see it. And neither of them are either easy or universally desired.

The first is that we steel ourselves to the reality that if we really want to reform health care, if we really want to create a society in which one of the things it means to be an American is to have an irrevocable base level of access to health care that essentially costs nothing and is open to more than the utterly impoverished, then we need to implement a single-payer system and let Uncle Sam be the one that handles all the accounting. Our taxes will go up, but what we pay into our health insurance will go down, and maybe somewhere along the line, we’ll figure out how to live without spending the equivalent of Switzerland’s entire GDP on our military.

The second is that we steel ourselves to the fact that life is never fair, and as a result, never equal. This goes far beyond a common acceptance that some people will be more successful than others. We have to be okay with this at its farthest extremes – that it is just acceptable for us to have people living like broken animals in the darkened corners of our nation’s capital and in every major metropolitan area as it is for us to have a very small class of elites with such incredible concentrations of wealth that it actually skews the rest of our entire economy.

I suspect Obamacare was really an effort to deal with the uncomfortable truth of that second scenario. And, after all the wrangling, after all the lobbying, after all the Supreme Court arguments and talking heads and endless arguments in every corner of society…we’re still right back where we were at the beginning, except that insurance carriers have some 40 million government-mandated customers, and a whole bunch of hard-working agents and brokers are essentially out of jobs. That doesn’t seem like a whole lot of progress to me. But what do I know? I’m just coming out of an extended fever dream.

Here are some things we might consider, if we ever do want to give this healthcare reform thing another try:

  1. Medical liability reform. A small percentage of medical practitioners commit about half of all medical malpractice. Meanwhile malpractice insurance is driving specialty physicians out of practice. What about some kind of liability benchmarks for medical malpractice, where liability cannot exceed a certain ratio of actual damage inflicted? And what if the criteria for damages were reviewed and scaled downward?
  2. Instead of mandating health insurance, try incentivizing it, instead. There would not have been a peep from either side of the aisle, if in the name of personal responsibility, and in an effort to get more people to actually pay something for the health services they use, there was a big tax credit for those who had health insurance in force for the previous year. Lost your coverage 11 months in? Then only get 11/12 of the tax credit. Simple. Carrots work better than sticks in this case. Plus, everyone knows carrots are good for you. Lots of vitamin A.
  3. Stop demonizing insurance. Insurers are not the enemy here. You know what the enemy is, here? CANCER. Insurance gets in the way sometimes, because it’s a funding mechanism, and an imperfect one at that. But I am willing to bet that health insurance has saved and improved many, many more lives than it has harmed. It sure saved my own father’s life on three different occasions, and one of my brothers would never have made it out of the hospital after his premature birth without it, either. So some perspective is in order.
  4. Have insurers do some serious work on linking positive health behaviors to premium incentives. Not all health problems can be avoided. But when you’ve got policyholders who are clearly abusing their bodies through food, tobacco or alcohol, they should be paying more for their health coverage. Likewise, policyholders who hit certain fitness brackets should receive preferential pricing. Insurance is all about discriminating against risk. So find ways to discriminate that help the insurer and insured alike, already. We already see it in life pricing, so health pricing should be no different.
  5. Revisit pre-existing conditions and policy dropping. A big part of what drove health care reform as public outrage over how pre-existing conditions and dropped coverage were handled. In other words, the industry’s efforts to control its own costs, though not necessarily to the benefit of the policyholder, broke that fundamental trust that makes insurance work. The policyholders felt that when it came to health insurance, the insurer was not really interested in living up to its part of the bargain. It was looking for reasons to cite a pre-existing condition to deny a claim, or it was looking for reasons to drop you from coverage if your claims history got too expensive. What we got was a weird solution, which was no ability to cite pre-existing conditions whatsoever, which makes no underwriting sense. What might work better is if insurers were able to cite pre-existing conditions under very strict and clear circumstances, to be identified at the inception of the policy – anything determined afterward is an unfortunate reality for the insurer to live with, but anything discovered during pre-screening is actionable. On the flipside, if you’ve got a health plan you like, you get to keep it for as long as you keep paying for it. If the insurer feels it’s too rich for their blood and they want to discontinue, too bad. They should have done their homework on Round One. Now, it’s like a rent-controlled apartment, and it’s on the policyholder to not let the policy lapse. This kind of solution is at the heart of good negotiations, because neither side walks away entirely happy.
  6. Remove the political spectacle from it all. Health care got thirty million times more complicated than it needed to be when decided to legislate it. The system still works best as a private solution, so let’s have the private players craft a solution that actually works best for the most amount of people. Another driver of the reform effort was the feeling in the public that for the most part, the system did not work very well, but those who profited most from it seemed awfully content to let the system run as it had. There was a feeling that nobody was working within the system to improve it, when it was clearly in need of improving. I think it’s safe to say that the private side of things has been spurred and shown that the government can and will get involved when given enough provocation. So quit provoking it, already. For as much as we like to note how capitalism is the greatest system there is for product development, the way to exemplify that is not take something as bloated and inefficient as pre-reform health care and pretend that it is as good as it gets. When a country like Canada can provide the level of free healthcare it provides to its people, there is clearly a better mousetrap to be made. So let’s make it, people. And in so doing, let’s give the folks in Washington some other industry to mess up. They’ve done enough with this one to last a lifetime.


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.