Blue Dog Democrats, fiscal conservatives but socially liberal, accept the need for a national health insurance plane, but do not want any “public option” (a government-provided healthcare alternative choice for Americans who do not want to access a pool that is covered by a private insurer). Liberal Democrats think the “public option” is an essential ingredient of any plan, because the government can drive down the cost of healthcare costs better – particularly since there is no built-in “profit” for administering this alternative – hence putting pressure on private carriers to drive down costs as well. And virtually all Republicans oppose most of these healthcare proposals as expensive choices for a cash-strapped, deficit-laden government, and one that reduces individual choice and increases government interference in the system. They particularly hate the thought of a non-profit competitor taking business away “unfairly” from the huge insurance sector of our economy, and suggest that such a program would actually reduce existing Medicare coverage. Each body of political thought clearly has merit, but…
With U.S. healthcare costs consuming $2.5 trillion a year, 16% of our GDP (almost a third of which is the cost of administering the system), rising for well-over a decade at a multiple of the annual cost of living increases and with 46.3 million Americans without healthcare, something’s gotta give. American businesses that offer insurance are dropping that option as costs escalate. The union-negotiated level of healthcare benefits accorded to our nation’s largest automakers contributed significantly to the bankruptcies of both Chrysler and General Motors. Bottom line: at the current levels of cost increases built into our healthcare system, we are rapidly reaching that place where we can no longer afford what many believe is “the best healthcare system in the world.”
Everyone seems to favor stopping insurance companies from denying coverage for “pre-existing conditions” or terminating insurance for someone with significant claims. There is a focus on excessive amounts of “over-testing” of patients to eliminate potential medical malpractice claims, paying doctors to keep you healthy versus paying to heal or cure ailments, helping small businesses provide alternatives to expensive healthcare benefits, allowing pooling (even private, non-profit cooperatives that allow larger numbers of people to pool their aggregate economic power to secure healthcare), mandating that people carry healthcare coverage (with subsidies to cover those who cannot afford it), and wrestling with getting the essential components of the system (like the big pharmaceutical companies) to finding cost-reducing programs. The “abortion” issue is also controversial, and some suggest that this cannot be part of any “public option” but that it can be included, if a carrier so elects, in private plans.
Whatever the alternatives, if we are indeed going to cover 46.3 million people who currently do not have healthcare coverage, it is clear that these costs are currently not fully recognized in the existing healthcare system. For those who choose not to be covered, the young invincibles for example (younger Americans who really don’t think they need health insurance), they will be mandated to get covered. Assuming that there are a remaining 30 million individuals who really cannot afford the cost of such insurance, the money to cover them has to come from somewhere. Call it additional taxes, fees or “contributions,” the financial benefits to that huge add to our medical coverage will be anything but free. Maybe the payments from the “young invincibles” can add a revenue base that could help defray some of these costs.
Cost estimates (over ten years) – and these are estimates – of the various programs being considered range from $750 billion to well over $1 trillion. The President has suggested a budgetary safety “trigger” that would force automatic spending cuts on other programs if the actual costs exceed predetermined levels, which is nice… until you actually start making those “automatic cuts” and the screaming starts. Or if providing healthcare to the missing 30+ million results in premium increases to the rest.
The latest contribution to this litany of healthcare options has come from the Democratic Chairman of the Senate Finance Committee, Montana’s Max Baucus. This Senate program, which is estimated to cost $856 billion over ten years, eschews the “public option” (but allows for non-profit “cooperatives” to pool resources), mandates that all who can afford insurance would be required to have it (and would provide subsidies for the rest) or else pay a fine, prevents insurance companies from denying or terminating coverage (based on expensive medical conditions or pre-existing conditions), and would allow consumers to explore their choices online.
The September 18th Washington Post: “Some Senate Democrats, along with a key moderate Republican, Sen. Olympia J. Snowe (Maine), are now discussing ways to increase assistance for individuals and families who could face premium costs of up to $15,000 per year by 2016. Sen. Charles E. Grassley (Iowa), the ranking Republican on Baucus's committee, is suggesting government assistance to insurance companies to help them control premium costs. And lawmakers in both parties are questioning whether Baucus's main revenue source, an excise tax on insurance companies for their most generous insurance policies, would simply be passed on to consumers.” Battle lines are being drawn, and the outcome is anything but clear.