The health reform plan Sen. Harris unveiled this week tries to appear more moderate but it is just a bit slower path to “Medicare for All.” She would get there over 10 years—after she would be out of office, should she be elected and reelected. Grace-Marie Turner of the Galen Institute breaks down the consequences: “Sen. Harris’ plan is a clear pathway to a single-payer, government-run health system that would eliminate choices, more than double personal and corporate incomes taxes, and drive hospitals and physicians into bankruptcy.” Like other candidates, she seems to believe that private insurance could survive alongside a ‘public option’ or ‘Medicare buy in.’ Both have unlimited calls on taxpayer resources, the ability to dictate prices, and no costs of capital. Private insurance would quickly wither.
Sen. Kamala Harris raised her hand in the June Democratic presidential debate when the moderators asked who would eliminate private health insurance. Then she backtracked. Harris says she’ll provide a “commonsense path” for folding everything from Medicaid to employer insurance into the federal system. Her website says employers could offer either private Medicare Advantage plans or dump workers into Medicare for All. She wants her plan to appear less disruptive than the Sanders bill, yet the obvious conclusion is that it would still blow up traditional employer-sponsored insurance and eventually put everyone on a single federal health program.
Last week, Reps. Ami Bera, MD (D-CA) and Jason Smith (R-MO) introduced an HSA correction and expansion bill, HR 3796, that eliminates some of the discriminatory practices against working seniors and allows more Americans to own HSAs and enjoy the benefits of HSA ownership longer than they can under current law. Retirees who already own an HSA would be able to continue to contribute to their accounts, and those who have never had an opportunity to open an HSA could do so. This means that 58 million retirees would feel less pressure from the financial vise and leave them with more funds to receive the high-value care that they need.
The 2019 Milliman Medical Index, which measures healthcare costs for individuals and families receiving coverage from an employer-sponsored preferred provider plan, found that health care costs have reached $28,386 for a family, an increase of 3.8% from the year prior. Health care costs for the average American adult are at $6,348. Milliman looks at five components of health care costs, including inpatient and outpatient care, pharmacy, professional, and other services.
The 2019 Milliman Medical Index, which measures healthcare costs for individuals and families receiving coverage from an employer-sponsored preferred provider plan, found that health care costs have reached $28,386 for a family, an increase of 3.8% from the year prior. Health care costs for the average American adult are at $6,348. Milliman looks at five components of health care costs, including inpatient and outpatient care, pharmacy, professional, and other services.
| A public option is not a moderate, compromise proposal. Its inevitable consequence is the death of affordable private insurance. Government insurance options mainly erode, or “crowd out,” private insurance rather than provide coverage to the uninsured. Jonathan Gruber, the Massachusetts Institute of Technology economist credited with designing ObamaCare, showed in 2007 that when government insurance expands, six people go off private insurance for every 10 people who go on public insurance. And the public option would cause premiums for private insurance to skyrocket because of underpayment by government insurance compared with costs for services. |
Acting on the principle “Why put it off until tomorrow when you can do the wrong thing today?” the House of Representatives last week voted to repeal the Cadillac Tax, the tax of 40% on a portion of the most lavish employer-provided health care plans. The Cadillac tax was proposed not just to help fund Obamacare but also as an incentive for restraining the rapid growth of health care costs. Because the tax break—treating important compensation as untaxable—is unlimited, Alan D. Viard of the American Enterprise Institute says, it encourages employers to provide high-cost plans “that cover routine care and feature low deductibles and copayments. Those plans increase the demand for medical services and drive up costs for other patients.”
Joe Biden’s new health-care plan is supposed to show his moderation, but there was strong pushback from Sen. Bernie Sanders who wants a full single payer system. If you cut through the spin, the only debate Democrats are having is whether to eliminate private health insurance in one blow or on the installment plan. Biden supports a new government insurance plan that would “compete” with private insurance. We use quotation marks since a government insurer with zero cost of capital and political backing starts with an unbeatable advantage. The public option would undercut competitors on price, stiff providers with low reimbursement rates, and crowd out private insurance over time. Voila, single payer!
Millions of Americans in high-deductible health plans associated with HSAs may find it easier to access insulin, inhalers and other treatments for chronic health problems under guidance released last week by the Trump administration. Currently, people in high-deductible plans with pretax health-savings accounts have to pay down their deductible before their insurance covers treatment for chronic diseases such as diabetes or high blood pressure. The rule change will allow insurers to begin providing coverage for those treatments, such as glucose or blood-pressure monitors, before the deductible is paid.
As the administrator of the two largest public health-care programs in the country, Medicare and Medicaid, I can say these programs face major fiscal challenges. Those who seek to expand them do so because of their expected lower price tag on premiums. But there’s a simple explanation that makes the low cost considerably less alluring: Public programs pay health-care providers less than private payers. Low prices imposed on doctors and hospitals can’t stop health-care costs from rising. Someone has to pay the bill—namely, Americans who purchase their coverage directly or through their jobs. In turn, this causes doctors and hospitals to attempt to make up the lost revenue by charging higher prices to private insurers, resulting in higher health insurance premiums for everybody else.