Thursday, July 17, 2008

Finally helping the groupless...

One of the significant challenge facing many farmers (like other self-employed persons) is getting health insurance coverage. Often something as seemingly trivial as hay fever will cause an individual application to be declined.  Plus when you apply somewhere else, you then have to check the box "Have you ever been refused health insurance coverage by another company?" - a real red flag to underwriters.

Don't get me wrong.  I support the right of insurers to not buy a sure loss, but comparing that outcome to those who are automatically covered because of employment in a group at least demonstrates a major flaw in how we allocate health care in the US.

This presidential campaign may bring some relief, or at a minimum highlight this problem better.
Among recent developments:

• In the past few months, regulators in California, Connecticut and several other states have fined or taken other action against insurers who revoked individual coverage after policyholders fell ill, leaving them with thousands of dollars in unpaid medical bills.

• In Congress, Sens. Ron Wyden, D-Ore., and Bob Bennett, R-Utah, are pushing the first sweeping, bipartisan health care proposal in years, one that could shift many workers from getting coverage through employers to buying their own insurance. Breaking the link between employment and insurance, they say, would let people keep their coverage when they lose or switch jobs. The proposal requires everyone to have coverage and forces insurers to sell to all applicants.

• Both presidential candidates say they want to improve options for people who buy their own coverage. Democrat Barack Obama says he would create ways for individuals to buy insurance in groups and would require insurers to sell to everyone.

That would allow "individuals and small firms to get all the benefits of the purchasing power of big firms," Obama adviser David Cutler says.

Republican John McCain has made individuals the centerpiece of his health plan. He proposes $2,500 to $5,000 tax credits to all Americans to purchase their own coverage and would end the tax breaks workers get for job-based coverage.

McCain says that would even the playing field between those who get coverage at work and those who buy their own.  [More]
I cannot imagine a goverment action that could improve farm life more.  Thousands of women especially commute to jobs they may not particularly enjoy simply to provide a farm family with health coverage.  Many do without coverage.

I do not advocate first-dollar health coverage (for anyone).  But divorcing health insurance from employment would strengthen employee leverage by being compensated for what they can do on the job, rather that coerced to stay even with lower pay because of a sick child.


[Blogger note:  Today is why I love publishing on Blogger from Google.  Today I sat down to post as found they had added a way to change the background color for text (so I can more clearly differentiate direct quotes from my own words) and the beloved do-over arrows (undo and redo).  And I now have strikethrough capability - which I will use to amend my multiple errors without hiding the original blinder blunder.  All this was free!  I love this country!!]

1 comment:

Brian from Central IL said...

John,

My apologies for the length, but this issue is on my mind. I should draft an executive summary.

I think there is much to gain through health care changes. Reading the examples offered in your post, I must say there are some concerning points. The legislation you cite from the two western senators sounds like auto insurance. The possibility of forcing people into coverage like auto insurance is frightening. Auto insurance coverage is not meant to protect the person insured with the coverage, rather to protect those affected by the outcomes of the insured. Forced health care seems to be an item not comparable to auto coverage. If you are required to have auto insurance to drive and you cannot afford the coverage, either you get a cheaper vehicle or you do not drive. Forced health care is no comparison, if you have a health history resulting in high premiums you cannot afford; one simply cannot get a healthier body.

I am not certain of how practical Obama’s plan is, simply from the governance of a coop of health coverage. Enforcement of the individuals in a group health plan is difficult, I know this from experience. I applaud Obama’s plan and it is actually one of the first things he has produced that to me is practical, just a few bugs to work out. Could be interesting.

McCain has a good idea, but I do not think the tax law for employer provided coverage needs to change. Offer both. Why should an individual whose firm offers coverage be penalized versus an individual who buys a single policy. Both can co-exist, the playing field is level if both can live together, rather than favor one over another. One over another distorts the field.

Health coverage is getting tricky. The high deductible plans are looking better everyday as insurance companies refine them and educate the public. Not enough health care is bad, but too much can be just as problematic.

A close friend said the best solution is to abolish health insurance and make everything out of pocket, make it a completive market. If you see a great doctor that should cost a little more than an average doctor. His idea is of course a little radical, but I think the high deductible plans step more in this direction than anything else. Health care is not about insurance, it is really about cost. If the cost becomes competitive and accessable, the insurance coverage will be almost secondary. Right now, there is a clinic here in town that charges $5.00 less for a routine visit than what my Wife’s co-pay is. Hard not to go there over our doctor.