Wednesday, October 15, 2008

Open Dialog, Part 2

[Welcome Kaiser Network readers!]

In Part 1, we discussed a recent post by health uber-wonk Joe Paduda. In it, Joe propounded what he described as "a solution that enables the Democrats to deliver on their commitment without breaking the bank." His solution consisted of a four-prong legislative approach, the first three of which we've discussed.
The fourth piece, a "basic benefits plan" would seem, in my opinion, to be a good thing if by "basic plan" one means the deletion of many, if not all, mandated benefits. That's the rub, really: the major problem with the "basic benefits" idea is that there's rarely agreement on the definition of "basic." For example, I was recently talking with a friend of mine about the credit crunch, and he mentioned "folks buying $300,000 houses." I reminded him that, in our world, that's a very fine home indeed, but in San Francisco, that's somebody's one car garage. Same thing holds true in defining what a "basic" level of coverage would entail. If a "basic plan" is so larded up with extraneous benefits (e.g. maternity, mental health, etc) that the resulting plan requires a budget-busting premium, then what's the point? If, on the other hand, one comes up with something that looks a lot like a High Deductible Health Plan (HDHP), covering catastrophic losses at one end, and preventive care at the other, then I think it deserves a closer look.
The main problem, though, with Joe's ideas is that none of them address the underlying issue, which is that we don't have a health insurance crisis in this country so much as we have a health care problem. To be fair, Joe disagrees with this assessment, which position I respect, if disagree with [ed: weren't you taught never to end sentences with prepositions?].
Simply insuring everyone doesn't do anything to address the underlying and increasing costs of health care (cf: Canada, England, et al). So one ends up with a system which rations care by government fiat, with little or no recourse. We think that there's a better way.
I've mentioned before that my better half believes that "there are no coincidences." Over the past few days, I've been corresponding with a regular reader (and commenter) about what kind of plan I think would help alleviate our current "situation." I felt his queries deserved a considered reply, and forwarded his email to my esteemed co-bloggers. Bob responded that "(a)ny proposal that promotes the HSA is on the right track. Everything else is rhetoric."
I think that's about right, with some caveats:
If you want to talk about an easy, relatively inexpensive partial solution (and I think Joe's correct that we're only going to get partial solutions - which isn't necessarily a bad thing), how about loosening up the HSA rules so that ANYONE can set one up, and use it, regardless of what kind of health insurance they have (or even if they're not insured, or under a government-sponsored plan). There's really no logical reason why one has to have a HDHP in order to qualify for a tax-advantaged HSA (Health Savings Account). In fact, as I replied to our correspondent, I think it'd be a fine idea to make them available to anyone who wants one, whether or not they have an HDHP, are covered by a government program, or have no insurance at all.
I tend to differ with many of my colleagues "in the biz" because I've never felt that the tax benefits of HSA's are all that big a deal: what's important is the empowerment and personal responsibility they engender. When one has "skin in the game," one is necessarily more aware of what various health care services cost. Were HSA's available to anyone who cared to own one, I believe that folks would become more aware of the underlying costs of health care (which is, in fact, the primary driving force behind the cost of health insurance); after one's had a year's (or so) contributions built up, one would become much more careful about depleting it.
Is this a "magic bullet?" Of course not; but it's important to understand that we didn't arrive where we are overnight, but incrementally. So any reasonably effective solution must be arrived at incrementally, as well.
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