Monday, April 28, 2008

Universal Health Care

The debate on universal health care usually breaks down along partisan lines when it requires everyone to participate and the government to pay for all without regard to needs or means. On its face, some sort of universal health care is an idea with great merit. The argument extends well beyond your basic low income, "I can't afford health care" entitlement recipient. Take for example those otherwise middle class and reasonably paid persons that wish to change jobs (i.e., employers), but have an existing condition that will not be covered by the new employer's health insurance carrier - because it is an existing condition. So that person is stuck, no movement possible. Or a more futuristic scenario in this world of genetic engineering. Suppose genetic testing required as a condition of your prospective employment discovers that you have some probability to develop XYZ-disease in the future, so you become untouchable. No new job - or potentially dismissed from a current job or insurance coverage denied for that condition while at the current job . Notwithstanding the discrimination argument that is obvious, such a scenario is entirely plausible.

So let's postulate what reforms and what reasonable criteria a universal health care program must meet to provide for the basic needs of the citizenry, provide for personal responsibility, be compassionate to those that cannot do for themselves, and not become a draining behemoth that siphons unsustainable amounts of funding from the federal treasury:

1. Portability - must be in place always when moving from one job or place to another.
2. Must provide at least for basic health maintenance services and catastrophic event (i.e., over say a cost of $2000) health care coverage.
3. Must be market based to control costs.
4. Must be open and available to all US citizens, but enrollment cannot be mandatory.
5. It must discourage frivolous litigation.

The system I envision would be essentially a HMO type of system with the only required federal government administration being contract administration and means determination. The contract would be competitively bid to all interested health care providers (i.e., Blue Cross, etc.) to provide a basic level of coverage to include annual physicals, routine out patient office visits and procedures, and catastrophic event coverage. The contract duration could be 5 years, or longer. Providers are required to provide coverage to anyone who applies for the bid unit price (an annual per person or per family cost). Additional "menu" style coverages can be purchased by anyone as desired, but additional menu coverages will not be subsidized. . All coverage is portable from job to job. For the basic coverage, anyone without the means to purchase (as determined by a means test) will receive a subsidy from the federal government that varies from 0% to 100% depending on household income and number in the household. The means test will set some upper income level, above which the subscriber would receive no federal government subsidy - say $40,000 for a family of four and $20,000 for a single subscriber. Employers can purchase from this program for their employees if desired (this would encourage low wage jobs to provide as a benefit). No one is required to subscribe, but anyone is able to subscribe. In other words if you can find a better deal in the open market, including if your employer can find a better deal, then you are not requried to subscribe to the government program.

Lastly, there will have to be a simultaneous reform of tort litigation as pertains to health care damage claims. The basic reform would be to limit damage awards to compensatory damages for income lost and/or suffering, and forbid punitive damages entirely. Additionally, the reform should place a burden on the plaintiffs that discourages frivilous litigation. Mandating that the loosing party in litigation pay all legal expenses incurred by both parties would achieve that effect.

I think that the program described above would provide a means for universal health care that meets the criteria outlined above, and is reasonably possible to develop.

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