An Alternative Remedy to America’s Health Care Woes
2008 Presidential Campaign, Cory Truax, Health Care
I believe that the three issues that will decide the 2008 presidential elections are the War in Iraq, immigration and health care. I also believe that we (we being conservatives in the Republican Party) are losing the Iraq War debate, and have only a slight advantage on immigration. But the key is that we’re at least competing in the first two. That is not the case on healthcare. We are being decimated on the issue of healthcare and the only reason that is true is that we’re not even participating.
The Democrats have talked about health care at ALL of their presidential debates. Republicans have talked about it at one. Democrats devote entire 20-minute segments of their debates to it. Republicans have had one round of questions on it. ALL of the Democrats have released a healthcare position paper, and are pushing a specific plan. To my knowledge, no Republican has released a plan. All of our candidates give abstract philosophical lines like, “market principles”, or tell jokes about how bad government is at everything. Jokes and buzzwords are not competing, and because of that, we’re losing.
Thus, I’m going to provide and package a practical solution to America’s healthcare woes in the following text. If Republicans will take these conservative principles to the American people, conservative Republicans can start to contend in—maybe even win—the Great Debate over healthcare.
Principle #1: Policies should be attached to people.
As it stands, only 10% of those with health insurance buy their policy directly from a health insurance firm. Middlemen pervade the system making it inefficient and impersonal. What is most tragic is that the firm that is most often the middleman is an employer. Meaning, Americans have to consider their healthcare policies before pursuing entrepreneurial opportunities or better jobs. People don’t stop being sick when they stop working for Ford and initiate the process of starting their own business, but they do stop having healthcare because it came through their employer.
Americans deserve better than that. Americans’ health care policies should be portable. They should be attached to people, not corporations. The following steps will take us in the right directions on this particular problem.
Congress should adjust the tax-deductible status for insurance policies. Right now, the money that firms spend on health insurance is tax-free. Congress should be make that tax-deductible status dependent on the employer/insurer pledging that the insurance policy belongs to the employee and can be applied in all 50 states—even if the employee stops working there. One of two things will happen: firms will stop offering insurance and lose that tax deduction, or employers will comply and employees will be given the freedom they need with their health insurance policies.
Principle #2: The market for health insurance should be nationwide.
An assortment of state and federal restrictions keep Americans trapped in their state concerning where they can get health insurance. Once again, Americans are better than that. We have nationwide markets on just about everything. Why not health care? The first principle of awarding portability is the first step in creating a nationwide market, but much work remains to be accomplished.
A 2004 Ehealthinsurance.com study investigated 62,000 health insurance policies across the country. The researchers found that the personal policy costs in America ranged from $4,044 in New Jersey to a low of $1,188 in Wyoming and Iowa. Why shouldn’t every American be able to buy a policy out of Iowa? Why are the citizens of New Jersey forced to keep their overpriced policies? We deserve better than that.
The walls need to be torn down. Imagine what a nationwide health insurance market would look like. We would see health insurance companies advertising to PEOPLE instead of corporations. Seventy-five percent of all health-insurance purchasers are business firms. Thus, health-insurance companies don’t have to market or advertise to regular Americans. But if policies were attached to people and not to corporations, and the market wasn’t so restricted, health-insurance companies would have to start competing with one another.
Americans would start seeing commercials for health-insurance policies featuring discounts for healthy lifestyles and even some companies building a reputation on their ability to assemble packages for any situation.
We need these market principles to have a health care system worthy of Americans, and we need Congress to remove the restrictions prohibiting these principles.
Principle #3: Trial lawyers are evil.
This is the most litigious society in history. Everybody has to be worried about being sued. Consequently, folks like doctors have to spend a substantial amount of money on malpractice insurance. I spoke to one general surgeon at a dinner in Columbia last year who told me she spent tens of thousands of dollars in insurance, protecting herself from lawsuits, in 2005. That’s what I call overhead.
Right now, the average cost of having all of your wisdom teeth removed is $1,600. The question: why would something that simple cost so much? The answer: that oral surgeon is worried he’s going to cut your mouth, and you’ll bankrupt him with a lawsuit. As long as personal injury trial lawyers are seeking out victims and stalking doctors, malpractice insurance premiums will remain high, and concurrently, so will medical prices. Obviously, there are other factors, but this one may be the main culprit.
So, how do we fix it? State legislatures, or even Congress, need to start placing caps on punitive damages, and pain and suffering amounts a jury can award. I’ll make this point in a hypothetical scenario for ease of understanding. Joe, 54 years old, goes in for a by-pass surgery and dies on the table. Joe’s wife, Jane, sues the doctor or the hospital for malpractice. Her attorneys estimate the worth of Joe’s economic life for the next twenty years would have been about 1.5 million. HOWEVER, they also ask the jury to consider Jane’s pain and suffering. They also try the case attempting to prove negligence on the part of the doctor or hospital, whomever is being sued. Then they ask the jury to punish the doctor or hospital by awarding the plaintiff, Jane, a ridiculous amount of money in punitive damages (maybe even half of the estimated worth of the hospital or doctor). It wouldn’t be surprising for that jury to come back in favor of the plaintiff with an amount like 80 million dollars. Short of appeals, there’s nothing the doctor and hospital can do. This scenario has already happened across the country. These trial lawyers are the single largest factor in our astronomical medical costs.
Two steps should be taken to curve the influence lawsuits have on medical prices. (1) Congress should pass a law stating that if you file a negligence or pain and suffering lawsuit against someone else and lose, YOU have to pay EVERYONE’s legal fees. This would make everyone a bit more wary before filing frivolous lawsuits. (2) State legislatures or Congress should place a cap on punitive damages, say 5% of the company or individual’s net worth. If these two measures were put in place, malpractice insurance prices would go down, and so would the cost of getting your wisdom teeth pulled. It’s as easy as that.
Principle #4: Give you control of your healthcare funds.
The next time you get a pay stub, look at your taxes. You’ll see a cavalcade of confiscations. Pay close attention, however, at how much of YOUR money is being funneled into Medicare and Medicaid. I believe that once people see how much they’re being taxed, they’ll be as upset about it as I am. The logical question is, where does that money go? It goes into a pool of money used to help pay medical care costs for those people who cannot do so.
Here’s what I propose we do with it. Instead of pooling the money together, I want to see each American given his or her own Health Savings Account. It has your name on it. Every dime you put in it belongs to you with only one stipulation: it can only be used for medical costs. You worked for that money; you should be able to keep it. You should have it on hand when you get sick. It’s your money. Very simply, the same departments that are allocating money from Medicare and Medicade can keep track of who has paid what, and how much each person has saved.
Espousing these principles can help conservative Republicans win elections. Instituting these principles will help Americans get the health care system they deserve. The socialized medical system the Democrats are pushing has one major flaw: It isn’t good enough for us. We’re better than socialism. We’re better than Europe. We are a people of innovation. We CAN repair this issue. But it will take a mandate from the American populace.
If you have any other steps, please post them on this page. I would enjoy being a catalyst for exploring solutions on this important issue.
Cory Truax @ September 30, 2007
Something we also need to do is counter the claims about the millions of people without health insurance. While the fugures may be true, they are misleading. Even though a person does not have health insurance does not mean he doesn’t have health care. To my knowledge, patient are not turned away for lack of money. Instead they are treated and the cost is usually passed on to the rest of us in higher doctor’s fees. This is a symptom of high health insurance prices, which themseves are high because of government involvement. Mandadtes on insurance companies force consumers to purchase more than they want or need. Harry Browne explains this better than I can in his book “Why Government Doesn’t Work” He also explains how Medicare and Medicaid actually hurt the people they are trying to help. In the end I believe that the firs response should not be more government mandates regarding the health care industry, but repealing all of the government involvement we currently have.
I’m with you up until the boldface words; after that, I’m in over my head.
Zach,
You state that patients are not turned away for lack of money; technically, that is true, but it also depends somewhat on what kind of medical care you are referencing.
For example, I have four wisdom teeth that need to be taken out. It will be $1000, maybe more, according to the dentist. There is no option to pay in installments. I am expected to have the cash or it simply can’t be done.
My wife is six months along. She is benefiting (thankfully) from Medicaid. It’s paying for everything. If she didn’t have that “insurance,” we would almost certainly be paying thousands of dollars out of pocket for regular check ups, the delivery, etc…
I do agree with what you’re saying somewhat, however. For the average person (assuming those I know, including me, are indicative of the average), no insurance = no health care. Prior to my wife’s having Medicaid, one checkup would have run close to $300 (the “new patient fee” alone is about $200), excluding any extra tests or prescriptions. Most people will just skip going to the doctor. But there ARE those who use the emergency room as their private doctor’s office. And I believe there is legislation in place that requires the treatment of the uninsured, which obviously falls back on taxpayers and, considering emergency room costs, that is a HEFTY burden.
Basically, what I’m trying to say: technically, the uninsured can abuse the system by using emergency rooms as their family doctor (and that abuse is extremely expensive), but I don’t think most people are doing that. Thus, for those who aren’t inclined to engage in such behavior, a lack of insurance does actually pose a problem.
Now, anybody want to loan me (read: give me) $1000?
This is only mildly on topic, but you guys (perhaps Ben, in particular) may be interested in going here: http://www.samaritanministries.org/
Actually, I think it is on topic. It shows individuals handling the health care problem more efficiently than the government. The plan sounds kind of like Medicaid, minus the government. And, based on my limited experience, the $248.00 listed on the homepage (which is the maximum reached, I believe) is cheaper than insurance by a long shot, no doubt due, in large part, to the lack of restrictions.
It’s an interesting concept. I’ll have to do more reading on it, as I’m interested to see how they avoid having the system abused. Thanks for the link.
Cory, As a small business owner I really appreciate this blog. I’ve spent several months trying to find something that will work well for me, but its ridiculous the costs out there. For a decent coverage policy I’d have to pay $500 a month to have a fairly low deductible. For a high deductible its still $250 a month. Thats insane to spend on something you may not use for many years. I do have one question though concerning your last principle. So would that mean you are for abolishing medicaid and medicare completely?
First let me say that after soldiers, I think entreprenuers/small business owners are single best part of America. They symbolize the spirit in which America was founded. One of the reasons I want healthcare fixed is for entrepreneurs and small business owners.
To answer question, I don’t want to either program abolished. I believe in a safety net. I do, however, want a percentage, say 25% of my Medicare/Medicade tax dollars going specifically to me.
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