Thursday, July 19, 2007

Fed Up

Is what I am with this notion that we need MORE government involvement health insurance and medical care. Here are a few examples of existing laws:

ERISA covers pension plans and welfare benefit plans (e.g., employment based medical and hospitalization benefits, apprenticeship plans, and other plans described in section 3(1) of Title I). Plan sponsors must design and administer their plans in accordance with ERISA. Title II of ERISA contains standards that must be met by employee pension benefit plans in order to qualify for favorable tax treatment. Noncompliance with these tax qualification requirements of ERISA may result in disqualification of a plan and/or other penalties.

Important legislation has amended ERISA and increased the responsibilities of EBSA. For example, the Retirement Equity Act of 1984 reduced the maximum age that an employer may require for participation in a pension plan; lengthened the period of time a participant could be absent from work without losing pension credits; and created spousal rights to pension benefits through qualified domestic relations orders (QDROs) in the event of divorce, and through pre-retirement survivor annuities. The Omnibus Budget Reconciliation Act of 1986 eliminated the ability of employers to limit participation in their retirement plans for new employees who are close to retirement and the ability to freeze benefits for participants over age 65. The Omnibus Budget Reconciliation Act of 1989 requires the Secretary of Labor to assess a civil penalty equal to 20% of any amount recovered for violations of fiduciary responsibility.

How can anybody say that MORE government is needed? Government at all levels is almost inextricably intertwined with health insurance coverage and medical care. Don't even get me started on the government-required hoops necessary for physicians, allied health providers, and hospitals to jump through. I'm really amazed that anyone even wants to become a physician nowadays.

Anybody thinking that the health care mess is all a result of Big Bad Insurance Companies obviously has no clue that the federal and state governments are chaining them with regulations and adding more chains all the time. (Unfortunately, as we have found out to our fury, some insurance companies have lost the ability to see those regulations for what they are--chains--and consequently have NO idea how to operate as an actual business, but more on that another time.) Actually, now that I think about it, some of the Big Bad Insurance Companies were in fact created by an act of government: the Health Maintenance Organization Act of 1973. Free market, my butt. (I'm in kind of a mood today, can't you tell?)

All of the above-named Acts sound just fine and dandy to the vast majority of Americans, many of whom haven't even bothered to question the morality or even practicality of sustaining such a heavily-regulated system. I bet most people have no idea of their existence, unless they get laid off and need COBRA.

Sometimes, I let that thought get me down, but then I try to turn my brain cells toward dreaming up more creative solutions to the problem (and believe me, I've got TONS of answers, because, well, I'm Jenn and a big Know-It-All and I can pretty much solve any problem in the best possible manner, just ask my husband).

When the government interferes with the market, costs necessarily increase. How do insurance companies recover those costs associated with being required to provide extra coverage? By raising premiums (employer AND employee), cutting patient benefits, and lowering reimbursement to doctors and hospitals. All in the name of government compliance.

Requiring ALL health insurance plans to fund, for example, reconstructive surgery for women who have had mastectomies increases premiums for EVERYBODY covered by that plan.

Oh, but how would such women be covered if there weren't laws requiring it? I can think of a few ways just off the top of my head. Some insurance companies would cover that kind of surgery in a traditional-type of plan and account for those costs in the premiums. I can also imagine that insurance companies specializing in women's health would spring up, limiting their coverage options to certain women's health issues. Or surgical insurance. There are such things as cancer policies, vision policies, dental policies. And the costs would be lower, too.

For a great illustration of the difference between the costs of government-subsidized medical services and the costs of mostly private medical services (in this case, plastic surgery), check out Update 2006: Why Are Health Costs Rising? by the National Center for Policy Analysis.

I can foresee true "cafeteria" type coverage in a truly free market. For my family, I'd purchase catastrophic and surgical coverage, diabetes and allergy coverage for the children to have (since they have these afflictions or a terribly high risk for them), maybe a general cancer policy for my husband and myself for when we're older (we fortunately don't have too much cancer in the family), and we'd pay for our well-baby checkups out of our own pockets--don't need insurance for that. Add some vision and dental coverage, maybe something to round out our pharmaceutical needs. That's just me--somebody else would buy a completely different set of insurance, or none at all. It wouldn't be required of employers (and what a positive effect on the economy would that have, because you know, they build all of their costs of doing business into their product prices).

I can dream, anyway! Hopefully, the more Americans are educated about the dangers of more government intervention in medical care and health insurance (two separate things), the quicker we can fix things. So consider this little post (really, I've got other things I should be doing right now!) just Doing My Part To Help The Team. And myself (of course).


MamaJen said...

Hmmm...ok - this is such a complex subject! I definitely agree with you about gov't involvement - the thought of universal healthcare scares me shitless. But - I'm not so sure about cafeteria coverage. You just can't foresee so many health circumstances. I mean - we would never in a million years have bought "stroke" coverage for my 33 year old hubby. My mother would never have bought "cancer" coverage at age 35. So, would it have been covered under a "catastrophic" policy? Perhaps - but if we had consciously chosen at some point to NOT buy the stroke or cancer coverage, why would the catastrophic policy cover it? How would *they* make their money if they just covered everything people couldn't foresee? Probably wouldn't. And how would these insurance companies stay afloat since only the people at risk of these diseases would probably buy their coverage? Since the risk to the insurance company would be so high, it would make it prohibitively expensive, don't you think? I mean - why would an insurance company cover your diabetic husband in a diabetes policy? What would be the benefit to them since they know they're going to have to shell out big bucks for your husband's care? So what then? Going back to my past experiences - would the docs have diagnosed Rick, looked at our health insurance coverages, saw we didn't have a stroke policy, then asked if we could pay? When we said no, would they have chosen not to treat him? Do we want our doctors looking at insurance policies before they treat a trauma patient? I don't! So, assume - we're not covered, and with all that we went through, we couldn't have paid it. We would have declared bankruptcy - or if you assume no bankruptcy laws, perhaps, debtor's prison? Either way - the money needed to pay for my dh's treatment wouldn't be there. Who would pay that? Who would absorb those costs?

I'm not saying it isn't an intriguing idea, just playing devil's advocate! :-) My thoughts run more along the lines of getting rid of gov't involvement and all insurance. Go back to a "you use it, you pay for it" system. And if you can't afford it, there would be a place for a bartering system. (Rick remember his dad, a "country" doc, taking barter for services he rendered.) And, maybe we could go back to the days where churches and other organizations ran "charity hospitals" for those without the means to pay for their care (like my family). If we weren't all so burdened by our onerous taxes, perhaps there would be more people willing to donate their time and money to fund things like charity hospitals. At least you would have a choice to do that, or not, unlike our tax system. And I'll bet a charity hospital would be a whole lot more efficient than a gov't hospital!

Hmm...lots to think about! There are certainly no simple answers. But definitely, as a nation, we simply MUST think about all this in a different way than just throwing more gov't in the mix!

Ok - put off folding laundry long enough, thanks for the mental stretch break! :-)

Rational Jenn said...

Hello, my friend! You raise some interesting questions!

My idea of cafeteria coverage is just an example--basically, what I mean is that in a rational society where the health providers are unshackled by government regs--and I agree with you, ALL government regs--there would be tons of different options. Some people might take partial coverages. Some might opt for the whole kit and caboodle. Some people would choose absolutely no coverage. The point is that every person must assess their own personal risk for certain diseases and accidents and purchase insurance coverage (if they want it) based on those assessments. Of course, there are always going to be unforeseen events, such as your mom's cancer, Rick's brain injury, and Brendan's "juvenile" diabetes diagnosis at the age of 29. But that's the purpose of catastrophic and traditional indemnity coverage, isn't it? I think it's reasonable to assume some companies will specialize in that kind of "unforeseen circumstance" coverage, especially because it's just the kind of thing that existed prior to all the HMO/Medicare stuff.

How would the insurance companies stay afloat? Smart ones with good actuaries will. And let's face it, most people would probably buy some kind of insurance. Also, health insurance plans could offer products similar to life insurance, in that they are a financial investment of sorts. Life insurance companies make a lot of their money through financial investments, not premiums.

Let's just say I know enough about this matter to be dangerous, but I will leave it to other experts to figure this out if and when we've done away with government-regulated health insurance. Okay, so I really don't know it all! :o)

You have a point about "pay for what you use" which I believe was much more common back in The Day when our medical costs weren't so saturated with government-agency-costs. Removing government regs from medical care and health insurance will drive costs down and many more people could afford that. I think hospitals and other medical care providers will of course have to change their business models (and we can't know what that will truly look like until government is out of the problem--remember the old AT&T phones--no way most of us could have envisioned compact cell phones). I personally know of several doctors who took barter agreements with their cancer patients, and were willing to let people pay off their debt over a very long term. It is already the case that hospitals and doctors already do want to look at your insurance before they admit you. Especially in the ER.

Thanks for your remarks! Maybe we should develop the "Jenn" plan for health insurance revolution!

MamaJen said...

LOL! Yeah, with all that spare time we both have we'll just come up with an awesome, innovative solution to health care issues.

Hey - we *could* do it, I'll bet! :-)

Anonymous said...

I'm not understanding your take on ERISA. We should be grateful it exists. Employers absconding their employee's funds and 'creative' plan design is what prompted ERISA in the first place. Without it, employers could manage your plan any way they wanted. With ERISA, pension plans have required minimum funding requirements. Without it, your employer could randomly decide to take away your pension for missing too many days of work, increase the amount of time you need to work to qualify for your pension, "Ah, we know you've worked very hard for us for 20 years, but we just changed the vesting schedule to 30 need to hang on a little longer - sorry!" Your spouse wouldn't be entitled to diddly upon your death, etc etc. ERISA is there to protect our retirement benefits. You would trust your employer to look out for you? Bad idea.

Rational Jenn said...

ERISA covers pension and "welfare benefit" plans (of which health insurance is a part). I completely disagree with the government's involvement in any employer-employee contract, in the form of minimum wage, health plans, pension plans, etc. The parts of the ERISA summary that I highlighted signify some of the ways in which the government interferes, and which of course apply to the pension side of things, too. I heartily disagree with the idea that employers should be required to provide pension plans or health plans--if they want to, great. If they then don't abide by their own agreements, then the employees have a case in court.

I don't trust an employer OR the government to look out for my best interests. I trust ME, and I'd love to be able to look out for the best interests of myself and my family unimpeded by unnecessary government interference.

I think there is already more than enough, and therefore, too much government regulation in the affairs of employers and employees.



Anonymous said...

I hear what you are saying, but while college-educated people are capable of defending their own interests, the less-educated among society quite frankly need a consistent framework to help them understand the employer-employee contract and provide a vehicle for health insurance and retirement savings. Savings rates of Americans are pitiful as it is - if we took away government 'interference', what incentive do employers have for offering anything at all? Not much. They receive a tax benefit for the contributions they make to pension and 401(k) plans. Competition for talented employees does not a kind-hearted, generous corporation make. What say you on the laws regulating a safe workplace, child labor, maternity leave, employees in the armed forces and the rights they maintain, the protection afforded disabled employees, gay employees? Without Federal and/or state/local labor laws, they could be terminated on a whim. You are not calling for MORE lawyers and lawsuits are you? I think we have enough already, thanks.

Rational Jenn said...

Hello Anon--I do apologize for the vast delay in replying. I hadn't forgotten, honest!

You say that the uneducated need these laws in order to help them understand their own contracts and to get health insurance and other benefits. I will agree that as a country, we are dumber than we used to be, back before all these laws were put in place for our own good.

Still, it's every individual's own responsibility to comprehend contracts and it should be (as it used to be, even in my lifetime) each individual's own responsibility to obtain health insurance or put money in a savings account or invest or whatever. There are lots of options open to people who need help: I can't begin to comprehend the tax code, so I use an accountant.

To a certain degree here, we are talking about how to manage in the world given the state of how things actually are versus how things should work. But I still don't buy that it's my duty to help out those less educated than myself. Particularly when in many instances, it is our federal government itself that has overcomplicated and obfuscated these issues to the point that even very very well-educated individuals need assistance. Less government is the first step to encouraging individuals to learn about this and handle their affairs themselves. Scary, yes, but we've been bred on the welfare state. It will be scary for many to give that up--look at the struggles they've had in the old East Germany and Soviet Union. Better scared and free than blissful and ignorant.

To address some of your other questions: companies do fire employees on whims (at least in a no-fault state like GA) and I support their right to do so, just as I support an employee's right to choose which company to work for, as I support a consumer's right to choose which companies to support financially. Some jerk at a company doesn't like gay people or pregnant women or people without a bachelor's degree? Fine--they should be allowed not to hire them. But I can choose not to shop there if I think their hiring practices are stupid. In a truly free society, companies that shoot themselves in the foot by being stupid will probably not survive.

There is much much more I'd like to 'splain, but I think it may be difficult for you to fully appreciate where I'm coming from if you are not familiar with the precepts of Objectivism, the philosophy I have studied and tried to live by for 18 years. If you are interested in learning about what Ayn Rand has to say on this subject, I'd suggest some of her nonfiction, including Philosophy: Who Needs It? and Capitalism: The Unknown Ideal. I think it would help you to gain further understanding of where I'm coming from, and of course, she says it much better than I could ever hope to.

Thanks for your thoughtful comments!