Ron Amundson’s Political Blog

After reading the media reports on this, it seems pretty lame, and yet another gift to the insurance industry at a cost to taxpayers and consumers. However, upon reading the actual proposals, if implemented correctly, some of these concepts might actually work to the benefit of the consumer and the taxpayer. The devil is in the details.

State line Insurance Purchasing

Purchasing insurance across state lines sounds good in practice, but rather than fostering real competition, its more a matter of giving up individual states the right to regulate insurance. It also opens the door to massive increases in provider administration costs. Yes, we would have more plans available in MN. Yes, on an individual basis, getting a plan with bottom of the barrel coverage such as available in some states, it will be cheaper. However bottom of the barrel far too often ends up with folks massively underinsured. As such, if an underinsured person gets ill and goes bankrupt, the taxpayer and/or medical profession ends up picking up the tab. After all, someone does have to pay. Its a good deal for the insurance company, but a bad one for the taxpayer, and the consumer.

Fortunately Pawlenty’s plan does address this to some extent. By only looking at the top 20 states, the potential for the bottom of the barrel type situation hopefully would be minimized.

Even better, he does suggest an interstate health compact for states to share regulatory standards such as done in the life insurance business. This does make a ton of sense… but I don’t know how happy his party will be at giving up major states rights to make it happen, or how hard it would be to get other states on board. Its a great concept, but the devil is in the details.

Require MinnesotaCare & Medical Assistance to Price Health Care Services Based on Quality and Cost

Again, this makes a lot of sense, provided their is solid data on quality and cost… In the ideal world, this would require the insurance and medical profession to give up significant competitive data. Just as a contractor provides estimates and referrals of past work, or a retailer publishes prices, it just makes good business sense… except in the medical world, where such must be buried as they are deathly afraid of competition (driven for the most part by insurance company practices). Again, I dont see how his party would be happy with increased regulation and transparency to provide for such data, even more so to make it readily available to consumers to assist in their decision making. Alas, rather than real data, costs and quality data are tiered by provider… so who knows if the tiers are real, much less if they are applicable across specialties. This one gets a minus for a very lame implementation, even though the basic idea is a good one.

Develop a Modern MinnesotaCare Product

He is proposing what appears some type of hybrid copay/deductible/hsa type thing for those earning between 133% and 275% of the federal poverty line, and a state funded EBT card to cover out of pocket expenses. This could be a huge cost saver, and a massive benefit to the consumer depending upon implementation. It could provide for much greater patient autonomy, and in doing so, not only keep costs lower, but also provide for higher quality care outside the scope of insurance. Ie, Minnesota care typically only provides for the minimum, and many services and supplies which could be a real help in the preventive care arena are off the table. On the other hand, I dont see his party being too happy with the fact that providers would have to deal with competition, or horrors, competition from alternative medicine. Granted, both parties grant privileged status as well as monopolies to key companies… Its an incredibly bold move to provide for some level of patient autonomy. Sadly, I bet the out of pocket EBT coverage is going to be limited to whats available via current Minnesota care insurance companies, suppliers, and services. Competition is anathema.

Overall, Pawlenty’s ideas could have amazing potential… but its likely the implementation of such will totally gut their potential, and instead further reward the status quo, at a major cost to consumers and taxpayers.

For reference, the press release from Pawlenty’s office, it has much more detail than most news sites.

Its interesting to note that so many folks on both sides of the issue of healthcare reform think its free. Democrats think that preventative care will save money, and reductions of waste will fund healthcare for all. Republicans don’t want higher taxes, don’t want illegal immigrants covered, and think insurance companies should be deregulated. Everyone, Democrats, Republicans, employees, employers, and retired folks think they spend too much money on healthcare. Guess what… healthcare is not free, and if you find it is, thats because someone is paying for it behind the scenes.

It may be that you don’t want higher taxes, but you fuss every time your insurance goes up. Well, the solution to that, is hidden. Bash on the insurance companies enough, and they will reduce benefits and deny claims, not for the nickel and dime stuff, but for serious illness, such that folks can still perceive they have great coverage.

Follow this up, by annual caps, lifetime caps, recision practices, denial of coverage for those with prior c-sections, infertility drugs, family coverage termination, or even ill employee termination, such that folks with illness are no longer covered. Then encourage such folks to get on medicaid, such that their expenses get hidden away in state budgets.

Then to top it off, don’t let states raise taxes to cover medicaid, so they too have to cut expenses and reduce benefits for the seriously chronically ill, such that only acute care is covered.

Of course, even that might be too much, so the solution is to limit acute care… and then the patients only source of acute care is the ER, which of course they wont be able to afford. Its the same deal with illegal immigrants, they get care per EMTALA, but it does have to be paid for. The end result, doctors end up having to fund the ER at huge costs… but of course thats problematic, as they need to make money, or at least stay above water.

So… the doctor’s solution is to raise every ones rates in order to keep doctors from loosing their shirt. Of course the problem with that is, insurance companies and Medicare dictate what they will pay to the doctor. If the doctor is shafted enough, he will say screw it, and leave the system, or perhaps leave medicine entirely. Such will create a supply side shortage, and put a serious dent into the pool of folks considering medicine for a profession.

This in turn affects the loan industry, being ex-docs wont be able to cover $300,000 in student loans, medical facilities wont be able to cover their loans, the pool of folks wanting loans for med school, and facilities will shrink and investors might actually feel some push back for a change.

The question then becomes…

Do we let the market run its course until investors get pinched? It might be the only way folks wake up to the fact that healthcare is not free, and that yes, someone does have to pay.

Do we let lobbyists write healthcare reform to reward their investors? It would bring massive gains in some sectors, with massive costs to others… most likely the doctor or hospital will pay financially and the patient will pay with their life, or at a minimum, a reduced quality of life.

or

Do we realize that healthcare is not free, and that all, everyone from the student loan firms, to the patient has to take some responsibility, and some of the pain of change?