[Epaphras]

I know conservatives (either as an organized group or isolated outspoken citizens) are creating a lot of bru-ha-ha at these town hall meetings.

The most legitimate criticism made by liberals/Democrats/pro-reformers against conservative opponents is that the GOP has offered no coherent, comprehensive counter-proposal. Is that true?

I "came up" with this idea the other day, and would like to submit it to all of you for scrutiny. I say "came up" because I'm sure I'm not the first one to suggest this.

My idea involves re-thinking the entire employer-based health insurance system. Why ought we depend on employers to provide health insurance? Why do we depend on them for health insurance, yet purchase other insurance - auto, home, life - privately? Why not jettison employer-based insurance and make all health insurance "private" in the sense that it is offered to individuals, not companies/employers.

The initial problem with this is that there are different rules for insurance companies in regards to individual versus group coverage. Insurers can reject individuals for preexisting conditions shopping for private insurance, but not individuals joining group plans offered through their employer. This is a precarious situation for people, because they will likely stay at a bad job just for the health coverage, or worse, if they lose their job in layoffs they not only lose their income but now lost group coverage, and can't qualify for individual insurance. In principle, it sets the employer-employee dynamic up in such a way as to perpetuate the lord/serf system. Employees should not work out of a place of fear, but rather confidence. Fearful employees are not good employees.

Anyway, what if instead of employer-based insurance, you had a different type of group-based insurance as the norm? I'm thinking like Facebook, which is organized by geographic networks. So you could have one network of Orlando, FL-based insurers who coordinate coverage for everyone in and around Orlando. Congress could rewrite the rules to make sure everyone is covered, no exceptions. Basically a privately-owned and operated, regional Medicaid model - everyone covered, everyone pays.

The challenges with a system like this is that certain regions of the country are objectively more expensive for medical care than others, thus the group premium would be higher for the same individual in one location versus another. So for instance a 25 year-old living in Clearwater, FL might pay a higher premium than if he were in a "younger" area. But then again, this is true of other types of insurance, namely auto. Where I grew up in metro Detroit, all the insurance rates were tied to Detroit crime statistics including break-ins, auto theft, vandalism, etc., so even 10 miles out of the city premiums were through the roof. Where I live now on the west side of the state, the rate is much lower because it's not tied to Detroit.

So just like when you move across the country and shop for auto insurance, you'd shop for a health plan in your region that fits you and your family's needs (with no worry of exclusion for a pre-existing condition) at a premium you choose from among several options.

The other challenge within each region is preventing a monopoly of one insurance company from dominating the market. The goal is to encourage competition to offer the consumer the greatest range and number of choices in health plans. That would be the government's role; that and subsidizing one or two plans for those who cannot afford the premiums. The government would not run those plans but rather just pay the insurance company the individual's premium on a sliding scale.

I hope that was coherent enough. What does everyone think of this? Has it been suggested before? Can it happen in this country? Should it? What are the pros and cons?

I found this article that is much more coherent than I.

[JerryLove]

Originally Posted by Epaphras

My idea involves re-thinking the entire employer-based health insurance system. Why ought we depend on employers to provide health insurance? Why do we depend on them for health insurance, yet purchase other insurance - auto, home, life - privately? Why not jettison employer-based insurance and make all health insurance "private" in the sense that it is offered to individuals, not companies/employers.

While I agree that a system where we do not need to depend on them is better than the existing system, to answer your question: because employers have the ability to get group rates and offer insurance that individuals could not have afforded on their own (because, for example, they got sick). Also, because of various laws.

The initial problem with this is that there are different rules for insurance companies in regards to individual versus group coverage. Insurers can reject individuals for preexisting conditions shopping for private insurance, but not individuals joining group plans offered through their employer.

That's simply a side-effect of the contract. Insurance companies can and do raise group rates and drop entire groups because someone was sick.

Anyway, what if instead of employer-based insurance, you had a different type of group-based insurance as the norm? I'm thinking like Facebook, which is organized by geographic networks. So you could have one network of Orlando, FL-based insurers who coordinate coverage for everyone in and around Orlando. Congress could rewrite the rules to make sure everyone is covered, no exceptions. Basically a privately-owned and operated, regional Medicaid model - everyone covered, everyone pays.

No one signs up until they get sick. Since all of the insured are sick, premiums are extremely high.

If you are going to do that, why bother with regions at all?

I hope that was coherent enough. What does everyone think of this? Has it been suggested before? Can it happen in this country? Should it? What are the pros and cons?

Why is this better regionally than nationally? Are you mandating coverage?

[tlj009]

The initial problem with this is that there are different rules for insurance companies in regards to individual versus group coverage. Insurers can reject individuals for preexisting conditions shopping for private insurance, but not individuals joining group plans offered through their employer. This is a precarious situation for people, because they will likely stay at a bad job just for the health coverage, or worse, if they lose their job in layoffs they not only lose their income but now lost group coverage, and can't qualify for individual insurance. In principle, it sets the employer-employee dynamic up in such a way as to perpetuate the lord/serf system. Employees should not work out of a place of fear, but rather confidence. Fearful employees are not good employees.

I have stayed with a crappy job because it payed the bills. What is the difference in doing that and staying in it for the health insurance? Sometimes a job is just a job. It pays the bills even if it isn't what you enjoy doing. And I would argue that the vast majority don't enjoy their job. You also have the option of keeping your health insurance after you leave a job. The catch is that you have to pay 100% of the cost yourself.

[Bryan]

Originally Posted by Epaphras

I know conservatives (either as an organized group or isolated outspoken citizens) are creating a lot of bru-ha-ha at these town hall meetings.

The most legitimate criticism made by liberals/Democrats/pro-reformers against conservative opponents is that the GOP has offered no coherent, comprehensive counter-proposal. Is that true?

I "came up" with this idea the other day, and would like to submit it to all of you for scrutiny. I say "came up" because I'm sure I'm not the first one to suggest this.

My idea involves re-thinking the entire employer-based health insurance system. Why ought we depend on employers to provide health insurance? Why do we depend on them for health insurance, yet purchase other insurance - auto, home, life - privately? Why not jettison employer-based insurance and make all health insurance "private" in the sense that it is offered to individuals, not companies/employers.

The initial problem with this is that there are different rules for insurance companies in regards to individual versus group coverage. Insurers can reject individuals for preexisting conditions shopping for private insurance, but not individuals joining group plans offered through their employer. This is a precarious situation for people, because they will likely stay at a bad job just for the health coverage, or worse, if they lose their job in layoffs they not only lose their income but now lost group coverage, and can't qualify for individual insurance. In principle, it sets the employer-employee dynamic up in such a way as to perpetuate the lord/serf system. Employees should not work out of a place of fear, but rather confidence. Fearful employees are not good employees.

Anyway, what if instead of employer-based insurance, you had a different type of group-based insurance as the norm? I'm thinking like Facebook, which is organized by geographic networks. So you could have one network of Orlando, FL-based insurers who coordinate coverage for everyone in and around Orlando. Congress could rewrite the rules to make sure everyone is covered, no exceptions. Basically a privately-owned and operated, regional Medicaid model - everyone covered, everyone pays.

The challenges with a system like this is that certain regions of the country are objectively more expensive for medical care than others, thus the group premium would be higher for the same individual in one location versus another. So for instance a 25 year-old living in Clearwater, FL might pay a higher premium than if he were in a "younger" area. But then again, this is true of other types of insurance, namely auto. Where I grew up in metro Detroit, all the insurance rates were tied to Detroit crime statistics including break-ins, auto theft, vandalism, etc., so even 10 miles out of the city premiums were through the roof. Where I live now on the west side of the state, the rate is much lower because it's not tied to Detroit.

So just like when you move across the country and shop for auto insurance, you'd shop for a health plan in your region that fits you and your family's needs (with no worry of exclusion for a pre-existing condition) at a premium you choose from among several options.

The other challenge within each region is preventing a monopoly of one insurance company from dominating the market. The goal is to encourage competition to offer the consumer the greatest range and number of choices in health plans. That would be the government's role; that and subsidizing one or two plans for those who cannot afford the premiums. The government would not run those plans but rather just pay the insurance company the individual's premium on a sliding scale.

I hope that was coherent enough. What does everyone think of this? Has it been suggested before? Can it happen in this country? Should it? What are the pros and cons?

I found this article that is much more coherent than I.

this would be nice, but what you advocate is not allowed by law in Texas.

[nolidad]

epaphras writes:
Anyway, what if instead of employer-based insurance, you had a different type of group-based insurance as the norm? I'm thinking like Facebook, which is organized by geographic networks. So you could have one network of Orlando, FL-based insurers who coordinate coverage for everyone in and around Orlando. Congress could rewrite the rules to make sure everyone is covered, no exceptions. Basically a privately-owned and operated, regional Medicaid model - everyone covered, everyone pays.

The idea has merit but there are several drawbacks. Historically it is a fact that when competition drops, cost to consumer rises and quality drops. Thatr is the nature of monopolies.

Second with home and car and life inis. these are individuals shopping the market where competition is. Companies have to compete for your business and the best survive and the marginals die off. It keeps the product more robust than if only one insurer reigned. We had a similar concept herwe in Mass. for auto coverage (companies all charged one price set by the state.) Premiums went up drastically (controlled by the state) and no improvement in coverages. Once the state last year went to limited competition prices dropped, more companies came in to the state and service has increased wonderfully. It is hard because we are dealing with peoples health, but I would prefer that if we want ot go to a universal type coverage- let the govt. issue vouchers to the uninisured and let them pick their own comapny to insure them. The cost would be much lower and the competition between insurers would benefit all.

[JerryLove]

Originally Posted by nolidad

The idea has merit but there are several drawbacks. Historically it is a fact that when competition drops, cost to consumer rises and quality drops. Thatr is the nature of monopolies.

Could you give an example?

Second with home and car and life inis. these are individuals shopping the market where competition is. Companies have to compete for your business and the best survive and the marginals die off. It keeps the product more robust than if only one insurer reigned.

Actually: when a disaster comes, the private companies demand that the government bail them out or they will declare bankruptcy and not pay out on claims. Katrina comes to mind.

Car insurance usually pays out, but then drops coverage. It's not unreasonable to hold that someone is too bad a driver to afford insurance: but someone is too sick to deserve healthcare?!?

We had a similar concept herwe in Mass. for auto coverage (companies all charged one price set by the state.) Premiums went up drastically (controlled by the state) and no improvement in coverages.

California tried deregulating power. Costs went up tenfold.

The fed deregulated credit cards. Interest rates went from topping out at 24% to well over 35%, fees went up drastically, and policies like universal default came into existance.

We also deregulated the banks. How is Bears-Stern doing these days.

It seems, perhaps, you are cherry-picking the bad examples.

Once the state last year went to limited competition prices dropped, more companies came in to the state and service has increased wonderfully. It is hard because we are dealing with peoples health, but I would prefer that if we want ot go to a universal type coverage- let the govt. issue vouchers to the uninisured and let them pick their own comapny to insure them. The cost would be much lower and the competition between insurers would benefit all.

I recommend that, but it's not enough. Without regulation, the vouchers wouldn't be worth anything. If you have a disease (ALS or AIDS) which costs tens-of-thousands to treat: what company is going to accept you because of a voucher?

[Epaphras]

Originally Posted by nolidad

The idea has merit but there are several drawbacks. Historically it is a fact that when competition drops, cost to consumer rises and quality drops. Thatr is the nature of monopolies.

Second with home and car and life inis. these are individuals shopping the market where competition is. Companies have to compete for your business and the best survive and the marginals die off. It keeps the product more robust than if only one insurer reigned. We had a similar concept herwe in Mass. for auto coverage (companies all charged one price set by the state.) Premiums went up drastically (controlled by the state) and no improvement in coverages. Once the state last year went to limited competition prices dropped, more companies came in to the state and service has increased wonderfully. It is hard because we are dealing with peoples health, but I would prefer that if we want ot go to a universal type coverage- let the govt. issue vouchers to the uninisured and let them pick their own comapny to insure them. The cost would be much lower and the competition between insurers would benefit all.

I probably wasn't clear enough, but the system would be designed to be trust-busting in that it would prevent one network/provider from being the sole provider. So, whatever is done to encourage/force auto insurance companies to compete, could be the same mechanism used for this. I agree, competition is the key to this. That is the main reason I oppose the current plan -- although it pays lip-service to competition, it's not a fair fight: the chips are stacked in the government's favor. That's why people are concerned about losing their private/group coverage, because the company won't be able to compete with the public option. Quality is nice, but if you can't afford a high-quality private plan, it doesn't matter how good they are. I used to think, "The reason they complain about not being able to compete, is because their abusive, excessive-profit practices are finally going to be exposed -- they've over-extended themselves and now realize their number is finally being call." But I realized it's less about that (might be true for some insurers) and more about simple economics.

I realize the "nobody would think of using their auto insurance to cover routine maintenance" analogy breaks down at some point, because unlike a car that you sink a lot of money too and end up trading in and getting something more reliable, we cannot trade in our body if it has a chronic, hereditary, etc. illness or ailment. Some people's "routine care" is just going to cost more than others. BUT, at the same time the auto insurance market already covers this -- at least some of the premium of a driver with no record and a well-maintained car goes to cover those who don't have enough coverage, or no coverage and the company has to eat some costs. It's not technically fair but it makes it so more people than otherwise, can get coverage.

[Epaphras]

Originally Posted by JerryLove

Car insurance usually pays out, but then drops coverage. It's not unreasonable to hold that someone is too bad a driver to afford insurance: but someone is too sick to deserve healthcare?!?

That is the true paradox of the health insurance industry. They exist (or should exist) to provide health coverage in the event of an illness or injury. Yet when it comes time to pay, they resist as much as possible. Yes, there are fraudulent claims. Yes, some people's lifestyle choice could exacerbate the risk for certain conditions or diseases. But, when insurance companies automatically resist reimbursement, it makes me think they are no longer in the business of providing health care, but in the business of making money. Somewhere along the way, all these originally-nonprofit, mission-focused ("providing health coverage") shifted to profit-making enterprises.

[Epaphras]

Originally Posted by JerryLove

I recommend that, but it's not enough. Without regulation, the vouchers wouldn't be worth anything. If you have a disease (ALS or AIDS) which costs tens-of-thousands to treat: what company is going to accept you because of a voucher?

The fine for refusing compliance would have to be significantly higher than the projected cost of treatment. Otherwise insurers would just pay the fine, it's cheaper than coverage.