- The Washington Times - Friday, July 24, 2009

ANALYSIS/OPINION:

Misunderstanding the important health care and insurance issues makes it far likelier our Congress will make the wrong programmatic choices. Nevertheless, and as with too many other complex problems, Congress still seems to favor sweeping, comprehensive solutions. But it simply won’t work for health care.

A much better approach is to address one insurance/health-related problem at a time: Here’s a list of basic issues we need to understand much better — and think much harder about — before we require people to participate in, and pay for, a new health insurance system.

c We know millions of people don’t have health insurance, but we really don’t know why. Our assumption is that they can’t afford it or can’t get it because of “insurability” issues, or both. We need to have an accurate breakdown before we impose a legislative solution — this because it impacts dramatically on the range of choices that are required, or desirable, in any solution, let alone the costs. For example: Do we bring people “in” who can afford it but choose not to — do we make everybody pay? Asking a question like “would you like to have health insurance” isn’t helpful, any more than “would you like to have free health insurance.”

c If we are truly concerned about our “public health” — and we have to because of its national and homeland security aspects — we should design a limited but effective public health system that will allow, if not require, everyone to have a certain level of protection from a consensus list of diseases, beginning at infancy. This won’t cost a lot of money, whether done by the federal, state or local governments. What must be at the core of such a program is the universal requirement that it be done. We should begin with this very basic, but very important step.

c The private health insurance industry is regulated by the states and has been since the 1940s. What fundamental legal changes are going to be required to adjust — or even affect indirectly — this relationship and how are they best accomplished?

c Why not study objectively and ascertain the incremental costs and public/private financing options associated with a gradual, phased-in approach of bringing Medicare eligibility down to age 60 or even 55?

c The lowest cost per person for large health insurance pools is for very young people, and it is large enough that comprehensive “student insurance” type coverage could be available (even required) for everyone in that age group (say, ages 5 to 25) at very affordable rates, regardless of “insurability” issues. Again, an important interim step.

c “Major medical”-type health coverage — because of its larger deductibles and higher cost sharing — is also very low cost compared with more routine care coverage. Again, and keeping with the basic insurance principle of insuring the largest loss exposure first, shouldn’t we explore the costs of requiring working people to buy this type of coverage — if we decide that new contributory and mandatory requirements are necessary at all?

c Why not explore the applicability of “assigned risks” in the health insurance field, similar to the concept for motor vehicles liability insurance? This spreads the costs and makes it far easier to insure people who are otherwise uninsurable by private companies.

c Health insurance is not the same as health care, and we don’t know whether our health care system will be able to provide the care necessary for vastly expanded heath insurance coverage. Unless we are able to get our arms around this issue, we really won’t know whether any solution we decide on will, or can, “work.” The data we need for this equation will also allow us to determine the longer-term requirements for heath care research, education and training.

c Perhaps the easiest and most equitable “fix” that our health care system could make is to require providers to adjust their billing practices in accordance to those used and approved by Medicare and the largest private health insurance providers. Why should someone with no insurance get stuck with the largest bills? In other words, give everyone the benefit of the “adjustments” made by Medicare. This could affect the health insurance equation in a number of ways, including allowing more people to responsibly “self insure” more of their medical care — and perhaps buy major medical coverage for the rest.

c When we had the option — just a few years ago — to study the various ways to insure people for drugs and medications, we ended up choosing a very high cost and inefficient way to address the problem, at least for those covered by Medicare. Meanwhile, the drug companies are working another closed-door “deal” with the Congress.

Instead, shouldn’t we be studying very carefully how to improve and lower the cost of this kind of coverage so that it could be a truly affordable part of health insurance coverage for other categories of Americans? Of relevance to this study would be how the Veterans Affairs and the Defense departments provide low-cost prescription services to their eligible beneficiaries.

c So-called “long-term care insurance,” while popular politically, is not near as important as the other issues listed above, and we should address those first. While certainly not unimportant, long-term care insurance is not where we should spend our precious “first dollars” toward the health insurance needs of the American people.

In sum, we should address our health care and insurance issues incrementally — doing the research needed to make cost-responsible decisions as we go, perhaps with test programs. And we have to be flexible enough to adjust our system when we need to. We simply can’t afford not to do so.

Daniel Gallington is a senior fellow at the Potomac Institute for Policy Studies in Arlington.

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