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Health care alternatives

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Now that people are no longer waiting on the supreme court for a ruling, the debate on health care is heating up again. Most people in the U.S. seem to feel that their health care system needs improvement, but most also think that Obamacare goes in the wrong direction. Perhaps it's worthwhile to look at the most obvious alternative: Romney's plan for what the federal governemnt should be doing on health care. Unlike Obamacare, Romney's plan leaves comprehensive health care regulation to the states, instead addressing a limited number of specific issues: federal treatment of individual health insurance, medicaid coverage for the poor, coverage retention for those with preexisting conditions, interstate competition, and malpractice litigation.

One of the issues with our current health care system is that, since it is paid for mostly by employers, it is designed with the employers' interests in mind. That means that health care in the U.S. is largely geared towards minimizing the symptoms resulting from health issues until the patient changes jobs and becomes some other employer's problem, rather than towards preventing the health issues in the first place. This employer focused health insurance system stems from the fact that employer paid health insurance is paid from pretax income and is thus tax free, while individuals who purchase health insurance directly must buy the insurance from money left over after paying taxes.

The first plank of Romney's health care plan would fix that, by allowing individually purchased health insurance to receive the same tax advantage as employer paid health insurance. Employers can now give the money to us and let us decide how best to spend out health care dollars - and we can spend those dollars on health care that focuses on keeping us, the patients, healthy for our entire lives, and not just for our current jobs.

A second issue Romney addresses is the medicaid system that covers individuals who are too poor to pay for a doctor. Based on his experience implementing Romneycare in Massachusetts, Romney believes that the states can do a better job than can the federal government of managing medicaid funds to most effectively serve local needs. He also recognizes that different states have different issues in this area, so that what works in Massachusetts may not be what works in Florida or Oregon. Romney's solution is to disburse medicaid funding as block grants to the states, allowing each state government to devise the best solution for that state. This should permit adequate coverage of the poor while limiting growth in federal medicaid expenditures to the rate of inflation.

The third issue Romney addresses is preexisting conditions. At present, in some states, insurance companies can refuse coverage or renewal of coverage based on preexisting conditions. In essence, the insurers accept your premiums until you develop an expensive problem, then drop you once the problem develops - basically a "take the money and run" approach. Romney would prohibit these practices as long as one maintained continuous health insurance converage. Romney's approach would ensure the insurers fulfill their half of the deal after accepting health insurance premiums, while also addressing the "free rider" problem of people who don't bother to buy health insurance until after they develop a problem.

With regard to competition, the current health insurance market is often limited to a small number of providers in each state - an oligopoly - which results in higher prices and poorer service. Romney would allow health providers to offer insurance and services across state lines, resulting in more providers, more competition, lower prices, and better service.

Finally, the cost of the present health care system in the U.S. is inflated by the direct and indirect effects of excessive malpractice litigation awards. The direct effects of malpractice insurance premiums drive up costs to a limited extent, but a much bigger effect appears to be that many expensive and unnecessary tests are done more for the purpose of protecting against litigation than for the protection of the patient's health. Romney would cap federal malpractice awards and encourage state law reforms to address this problem.

None of these solutions are revolutionary; all are incremental or evolutionary changes based on approaches that have worked in various states. Together, though, these incremental initiatives, focused on individual control and state input, may do a better job of facilitating improvements to our health care system than a monolithic federal approach. At a minimum, they deserve attention as a serious alternative to the current federal approach.

Romney's health care outline:
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On August 23rd, 2012 01:46 am (UTC), psychohist commented:
I'm closing comments on this post because of excessive spam. If you want to make a comment, please leave a comment on one of my other posts and I'll reopen this one.
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