PRIVATE HEALTHCARE CENTRAL
September 1, 2007
-- THE EDITOR'S PERSPECTIVE: CRAZINESS
The doldrums of summer are about to end but the debate over the future of U.S. healthcare is still gaining steam.
The craziness in California continues. As of this writing 14 state Senators are holding out against the Governator's extravagant budget. They are doing so because of his broken promises to contain spending.
One of the biggest budget problems is his healthcare plan which he apparently intends to use as a stepping stone to higher political office. He has proven to be just another politician ignorant of history and doomed to repeat it. His proposal boils down to more government intervention and history has shown us that this is a formula well known to make matters worse.
And the craziness in Congress continues. As editorialized below, the SCHIP Reauthorization Bill threatens to eliminate private healthcare from the bottom up. This bill is a dangerous Trojan Horse that the public needs to be made aware of.
I encourage everyone to read Greg Scandlen"s guest editorial about how republican politicians are foolishly pursuing state mandates as a solution to the "uninsured crisis." And please read David Gratzer M.D.'s article in the City Jounal. Follow the link to a definitive article on why the U.S. system, flawed as it may now be, is still so much better than our neighbors to the north.
---RLT
THE
SCHIP REAUTHORIZATION BILL: BEWARE THIS TROJAN HORSE
The future of U.S. healthcare may be debated in
the 2008 election year, but the final battle for complete government control
of our healthcare system is already at hand. It is cleverly disguised as a routine
extension of a popular 10-year program providing coverage for poor children.
Who could be against that? It's "for the children".
In fact it is a Trojan Horse used as a clever
weapon by those trying to achieve universal, single payer, socialized, nationalized
healthcare from cradle to grave. Those who believe that consumer driven, marketplace,
private healthcare is best for all are just waking up to see how SCHIP has already
been misused. State governors and legislatures have so greatly expanded this
program to cover our young people and their families that it now threatens to
take over healthcare from the bottom up.
Too few of our politicians and fewer physicians
understand the dangers in the SCHIP Re-authorization bill. If it is not defeated
in its present form, this Trojan Horse will disgorge enough new weapons in our
states to eliminate private health insurance for good.
WHAT IS SCHIP?
The State Children's Health Insurance Plan is
a government program started in l997 to supplement Medicaid to cover only uninsured
children living below the poverty level. Like Medicaid, states individually set
eligibility requirements and market the program within broad federal guidelines.
The Dept of HHS approves each state plan.
The kicker is that the U.S. taxpayer pays a bigger
chunk of the bill. The federal government matches 40% of each state's Medicaid
expenses but matches 72% of a state's SCHIP costs. Thus state governors and legislatures
get a lot more of our income tax dollars by expanding SCHIP over Medicaid.
As of 2005, 6.1 million children were enrolled
in SCHIP at a total federal cost of 40 billion dollars. Unless it is reauthorized,
the state block grants expire.
HOW THE UNIVERSAL COVERAGE CROWD TURNED SCHIP INTO A BOTTOMLESS FEDERAL AND
STATE MONEYPIT
Until 1996 the government monopoly on healthcare
only existed for those over 65 on Medicare and the poor on Medicaid. With the
failure of the Clinton Healthcare Plan, proponents of socialized government care
looked to the states to incrementally achieve their goals. They have been very
busy and very successful.
In 1998 only 1% of U.S. children were in SCHIP
and 27% were covered by Medicaid. In 2005 8% of our kids were in SCHIP and 37%
in Medicaid. That's right, 45% of our young people are now dependent on government
for their healthcare financing.
But that is not enough for those supporting SCHIP
expansion. With eligibility criteria now proposed in many states, 71% of U.S.
children could be in these programs by 2012, just 5 years from now.
Not only that, most states expanded eligibility
far beyond coverage for poor kids. At present 14 states enroll entire families
at 200-350% above poverty level. 14 states cover all the adults in a SCHIP family,
6 states cover pregnant women and 6 states cover childless adults. As of 2006,
670,000 adults were enrolled in SCHIP nationwide. The GAO reports that 87% of
Minnesota SCHIP enrollees are adults, 56% in Arizona.
With the U.S. taxpayer kicking in matching funds
at 72% of costs, one can easily see that the surreptitious SCHIP expansion represents
a bottomless money pit. Supporters claim that 9 million children need coverage.
The left leaning Urban Institute says this is bogus. There are only 689,000 uninsured
kids in families using the 200% poverty level. Rather than finding money for
them, states are looking at covering entire families up to 400% of poverty level.
That's an income of $83,000 for a family of four.
77% of families at 200% of poverty level already
have health insurance. 95% of families at 400% do as well. These families don't
need Medicaid or SCHIP.
As these programs expand there is "crowd
out" of private healthcare insurance. Some families drop it to get "free" coverage
from the government. Health insurance becomes more expensive for the rest of
us as a result of these folks giving into the temptation to have the rest of
us U.S. taxpayers foot the bill for their healthcare.
THE TRUTH: SCHIP IS ALREADY A FAILURE
Expanded eligibility or not, states can't get
poor families to enroll or stay in this program. As reported in the July 2007
journal Health Affairs, current eligibility requirements would allow millions
more children to enroll. But families don't sign up and 42% of children drop
coverage each year.
Reasons are multiple and complex. These families
are poor by our standards but not stupid. They know that Medicaid programs are
mediocre: poor access to providers, bureaucratic re-enrollment requirements,
and federal proof of citizenship requirements.
The failure of Medicaid and SCHIP to reach these
children is one reason some advocates want to enroll whole families by fiat.
In some states they advocate automatically covering all families below 400% of
poverty in Medicaid and SCHIP with no questions about citizenship, no re-enrollment
requirements, etc. The fact that those already dealing with this form of government
care find it difficult and inadequate does not deter them.
THE SCHIP REAUTHORIZATION BILLS
Democrat and republican governors alike all want
Congress and the President to provide additional funding to cover their SCHIP
shortfalls. This amounts to $745 million at present. The democrat congress wants
to greatly expand the program. They would have us throw in an additional $60
billion.
The House bill under Rep Pete Stark proposes to
do this by gutting the Medicare Advantage program. This is a very recent PPO
alternative to Medicare, which is just gaining steam. The Senate wants to pay
for this SCHIP expansion by adding a 61-cent a pack increase to the federal cigarette
tax. That would hit lower income people the hardest.
For his part, President Bush has said he will
veto such an expansionist plan. Look for him to be pilloried as "against
healthcare for our poor children." Such is the state of our politics today.
A FEW BETTER IDEAS
The question is not whether or not poor children
should have health insurance. The question is how to provide it for them. A few
familiar names have weighed in with some obvious solutions to help poor families
- Don't make things worse for
poor families. Grace- Marie Turner of the Galen Institute says, "Don't
punish poor children." She points out that expanding SCHIP to
the middle class will do nothing to help currently uninsured poor
kids.
- Spend less money and focus
on the 689,000 uninsured children not presently covered.
- Fix the Tax Code. Tom Coburn
and Jim DeMint in the Senate and Paul Ryan and Jim McCrery in the
House want to end the corporate subsidy and make healthcare expenses
tax deductible to all U.S. taxpayers. They want to put 300 million
people in charge of their healthcare finances and therefore their
own healthcare.
- Expand HSAs and HRAs. There
is still work to be done at the state level to help poor families
take advantage of these plans. Some farsighted states already are
experimenting with Medicaid HSA plans.
THE BOTTOM LINE
Michael Tanner of the Cato Institute probably
summarized the implications of the current SCHIP Reauthorization bills. He said, "Let's
be clear. SCHIP is a welfare program. How far up the middle class do we want
welfare to go?"
SCHIP is no longer just a program "for the
children." The reauthorization bills are a Trojan Horse designed to surreptitiously
unleash new government programs designed to take over U.S. healthcare from the
bottom up. Those of us who care about the future healthcare of our own children
have to fight for a better solution.
That is one man's opinion. I look forward to hearing
yours.
Richard L. Taw Jr. M.D.
Op-Ed by Greg Scandlen
Don't Mandate -- INNOVATE!
Hagerstown, MD, August 15, 2007 Mandating that every American be forced to purchase health insurance is the latest fad among Republican politicians. From Massachusetts to California they are embracing the idea as an expression of "personal responsibility" that will help alleviate the "hidden tax" of free care provided to the uninsured.
What the idea really expresses is the woeful ignorance and hubris of some Republican politicians. What they are saying is, "I will tell you what to do, and you have a 'personal responsibility' to do it."
In fact, people who refuse to purchase health insurance are sending an important signal to the insurance industry that their products are not worth purchasing. They are not wrong. Most health insurance products on the market today are bloated with inefficiency and waste. For instance, in the non-group market it is not unusual for 33% of the premium dollar to be used up by administrative costs (a "loss-ratio" of 67%). Then, another third or so of the dollars paid out may be wasted in physicians' administrative costs devoted to complying with insurance company rules and regulations. That means a dollar spent on premium may deliver a mere 45 cents worth of health care services. It is simply not a good use of scarce resources -- especially for routine, low-cost services.
Further, consumers are saying that insurance company benefits are not what they are looking for and the customer services are second- rate. A recent survey by J. D. Powers and associates found that only 12% of respondents trust their "health plan" (the current euphemism for "insurance company") to provide reliable information.
The regulators and politicians don't help, either. Over the years they have enacted around 2,000 "mandated benefits" that require people to buy coverage for in vitro fertilization and a host of other services they don't want and don't need. Other regulations, such as "community rating" laws require insurance companies to vastly over-charge low-paid young people who consume few services in order to subsidize middle-aged people with higher incomes who consume more services.
Instead of ignoring the signals consumers send and using the police powers of the State to force people to buy what they don't want, the insurance industry and the regulators should pay attention and develop innovative products that will deliver value to this market.
We have already seen that innovations such as Health Savings Accounts will appeal to market segments that did not find value before. Something like 40% of the people who have purchased HSAs in the non- group market were previously uninsured. But HSAs are only one of many possible innovations in health care financing. Mandatory coverage would short- circuit the vital process of innovation in a competitive market.
Further, mandatory coverage simply doesn't work. Politicians, for all their self-regard, do not have the power to wave a magic wand and force people to do what they want them to do. Virtually every state currently mandates auto insurance coverage and the number of uninsured motorists is very similar to the numbers of people without health insurance. In seventeen states the rate of non- insurance for auto (which is mandatory) is higher than for health insurance, which is not mandated.
Finally, people already have a "personal responsibility" to pay the bills they owe. Unfortunately, many health care providers so grossly overcharge people who pay their own bills that the customers give up on trying to pay. It is common for hospitals to charge an uninsured patient 400% more than an insured patient - for the exact same procedure. Yet the cost of performing the procedure is identical for both patients. The overcharging has become so bad that a growing number of uninsured Americans are going overseas for major surgery. Self-pay patients should be charged reasonable bills, and then the providers might discover there is no need to apply a "hidden tax" to people who are insured.
Republican politicians may pass many foolish laws, but they do not have the ability to repeal the laws of human behavior or of economics.
Greg Scandlen is the president of Consumers for Health Care Choices, a national membership organization based in Hagerstown, MD. About Consumers for Health Care Choices
Consumers for Health Care Choices is a national membership organization of citizens devoted to putting the consumer in the driver's seat of the health care system. It was organized two years ago and is growing quickly as more people realize the future of health care rests with empowered consumers. The Board Chair is Daniel (Stormy) Johnson, Jr., MD, a radiologist in Metairie, Louisiana, and former president of the American Medical Association. Website: http:// www.chcchoices.org
Consumers for Health Care Choices
Greg Scandlen President
email: greg@chcchoices.org
phone: 301-606-7364
Healthcare reform will be the hottest political topic in California this fall. If you care about the healthcare system your kids will face then save this date: Thurs Sept 27, 6:30-8:30 pm at the Pacific Design Center, 8687 Melrose Blvd, W. Hollywood. "SICKO AND ITS MALCONTENTS: HEALTHCARE ON FILM" wlll be presented by our old friends at the Pacific Research Institute. It will feature clips from the Moore film and clips from 2 alternative films painting the opposite picture of single payor healthcare. A debate between supporters and opponents will follow. Those of us who know the reality of government intervention in health care need to fight for our childrens' future, show up and voice our opinion. We hope to see you there.
More specifics on the agenda will be emailed when available.
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