Monday, October 15, 2012

A Medicare compromise

While listening to the first presidential debate, I got to thinking that a compromise on Medicare shouldn't be difficult,... assuming that both sides actually believe what they say.

Republicans want vouchers, because they claim that the government can't do anything right (except for the military - hmm, maybe we could just turn Medicare over to the Defense Department?), that corporations are always better and more efficient, that the competition of private enterprise will give us more for less.

So, OK, why not give them vouchers, then, as a Medicare option? Medicare has all the figures necessary to calculate what each age group is costing them - that's not difficult, since every insurance company in the world does the exact same calculation - so seniors could get a health care voucher check for that amount, if they preferred.

To make it a level playing field, there would have to be a few minor requirements - just basic common sense regulations, really. (But note that these would be absolutely essential requirements. Without all of these, this compromise would make no sense.)

1) Every Medicare alternative plan from private insurance companies would have to cover everything that Medicare covers. Obviously, we wouldn't want seniors missing something in the fine print. But that would just be a minimum. Health insurance companies would compete on providing better coverage and/or a lower co-pay for the same cost.

2) Every Medicare alternative plan would have to be open to everyone who's eligible for Medicare, with no restrictions on pre-existing conditions (just like Medicare). Obviously, it wouldn't be fair to let insurance companies pick only young, healthy people, while leaving the very old and very sick for the government. That would quickly bankrupt Medicare.

Since it's much more expensive to provide health care to the very old, there would have to be different age groups, with different voucher amounts. But those amounts would be set by what it's costing Medicare for each age group, and - obviously - Medicare has to cover everyone who's eligible. So competing insurance companies would have to do the same.

3) Finally, we'd have to remove any artificial restrictions on Medicare, such as letting them negotiate directly with drug companies, just like private health insurance companies do. Remember, we're setting up a level playing field here. If it's legal for corporations, it should be legal for Medicare. Otherwise, you'd be stacking the deck.

But that's all corporations need, right? It's been a right-wing talking point for years that the government can't do anything right (except, as I say, for the Department of Defense - Republicans love to throw money at the military). Republicans claim that private companies can always do better, so this would give them the chance to prove that.

Vouchers are what Republicans have been demanding, so let's give them vouchers. But what would Democrats get out of this compromise? Remember, we want both sides to get what they want.

Well, progressive Democrats want a single-payer plan, and that's not going to happen. I'm afraid that this compromise can't give them what they want. But Democrats also want universal health care coverage, so we could do that.

In exchange for agreeing to vouchers, why not open Medicare up to everyone, not just seniors? Of course, younger people would have to pay premiums (senior citizens have already paid for their care in payroll taxes their entire working life).

The premiums would be based on the cost of Medicare for their age group (just like all insurance everywhere, basically), so it would be a lot cheaper for younger people. And since our compromise is all about letting private industry compete, everyone would also have the option of getting private health insurance, instead (either through work or directly).

The only way this would work - as even Mitt Romney realized in 'Romneycare' - would be to require health insurance (and - duh! - that's the whole point of universal coverage, too). Otherwise, people would wait until they got sick before getting health insurance. No one could afford to pay for that. If you didn't have to get fire insurance before your house burned down, can you imagine how expensive that would be?

The whole point is that not everyone's house will burn down. Some people will pay for fire insurance and never need it. But we never know who will need it, and with everyone paying, that keeps insurance affordable enough for all of us. It's the same basic idea with health insurance (with all insurance, in fact).

But other than premiums vs vouchers, this would work the same way as Medicare for seniors. Again, health insurance companies would offer Medicare alternative plans, covering everything Medicare covers (at a minimum), open to everyone, with premiums no more than what Medicare costs to cover their age group. (Note that, for younger people who aren't getting vouchers, health insurance companies could compete on price.)

In this compromise, both sides get what they want, though not everything they want (as I say, progressives don't get a single-payer plan - there's just no way to do that). If Republicans really believe what they say, this lets private companies compete directly with the U.S. government. Hey, that's a slam-dunk, isn't it? After all, the government can't do anything right.

And Democrats get universal health care. That's worth a little compromise, isn't it?

Of course, there will be a few minor issues, I'm sure. The indigent won't be able to afford health insurance, no matter what it costs. We can't demand that the homeless all buy health insurance. It just isn't going to happen.

But we're already covering health care for those people now. Currently, they end up in hospital emergency rooms, and we all pay for that. No matter what, we're going to be paying for the desperately poor, there's just no getting around it. But with universal coverage, we'll be paying directly for their Medicare insurance.

Hospitals will no longer have to absorb this expense. On the other hand, our government will. So that will be shifting the cost burden a little. But only at that level, since we all pay for it in either case.

Likewise, we may need a backup plan for any health insurance companies which go bankrupt. After all, we don't want to create a profit model where corporate CEOs give themselves huge salaries, then close down the company and leave the expenses to the rest of us.

But that shouldn't be a big deal. Insurance companies themselves could insure against such an event. If it's going to cost all of them, they'll probably set up effective safeguards against a few bad apples.

That's only if it's just a few bad apples, though. We'd still need regulations to prevent all of them from doing stupid things - like our banking industry did just a few years ago - because we might have to bail them out if the whole industry was in danger of collapse.

Also, I'm not a tax expert, so I don't know if health insurance companies are getting tax breaks which would affect that "level playing field." We certainly don't want the government subsidizing insurance company costs other than that voucher they'd be getting. Corporate welfare on top of that would change the whole equation. We must have a level playing field here.

But doesn't this seem like a reasonable compromise? Republicans get their vouchers, requiring only that private corporations compete on a level playing field. But as I say, they're always claiming that government can't do anything right. If they actually believe that, this should be a slam-dunk for capitalism, right?

Here's their chance to put up or shut up. Private health care companies get to compete on equal terms with Medicare, just what they've been wanting (or just what Republicans claim they want, at least). They can compete for a lot of new customers, too, not only traditional Medicare recipients but a whole bunch of young people.

And Democrats get true universal health care. True, it's not a single-payer plan. And it would require a mechanism - I'm not qualified to be more specific than that - to subsidize health care premiums for the poor (recognizing that there'd be a big cost savings at hospitals).

But Medicare would potentially get a huge number of new members. After all, private corporations will get to compete with Medicare, but Medicare will also get to compete with private corporations. And if Democrats are right about how efficient Medicare is, well, this is their chance to demonstrate that, too.

Both sides get what they want - or, at least, what they say they want. If both sides are telling the truth, why wouldn't they agree to this compromise?

But I don't know. The big problem is the possibility that both sides aren't telling the truth. But maybe there are other problems I haven't thought about. If so, please comment and let me know what I've missed here.

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