Let’s play a game. Who said “[w]e should have a government-run health program!”? Your choices are Bernie Sanders or Paul LePage.
No matter who you choose, you’re right.
After the American Health Care Act’s unceremonious death, political leaders of all stripes scrambled to offer their favored solutions to replace ObamaCare. Our socialist uncle from Vermont throws out “Medicare for All.” We’ll create a government monopoly and simply send the bill for every American’s health care to Washington. Sen. Sanders’ home state explored doing just that in their laboratory of democracy; unfortunately, it was found to be financially untenable.
Meanwhile, Gov. LePage suggested Maine repeat its own history. In 1994, workers’ compensation insurance premiums were skyrocketing and threatening to destroy countless Maine businesses. So Gov. Jock McKernan and the GOP Senate weathered a state shutdown to force real, systemic reform. A big part of that was the establishment of MEMIC, a mutual company that has grown into one of the premier workers’ comp insurance companies in the country.
Yet health care is different. The Affordable Care Act mandates everyone have insurance, but we do not treat it like insurance.
Workers’ compensation policies don’t pay for protective equipment on job sites. Businesses and employees are expected to be responsible.
We don’t expect our car insurance to pay for an annual inspection, or routine maintenance like tire rotation or oil changes. You pay for those things a la carte, or buy a service package to ensure it is all taken care of.
And our homeowners’ policies do not pay for rock salt, even if treating your well water is necessary to keep your water lines in good repair and prevent burst pipes. It’s your house; take care of it.
But when it comes to our health insurance plans, we require them to pay 100 percent for preventative care, help cover prescription drugs, and provide a “cap” on costs should we experience a health emergency. So it is insurance, but it is also something more — we expect it to be a service plan financing the costs of routine medical care.
That confusion is compounded by the tax code. One of the laudable goals of ObamaCare was a refocusing on individual markets. For many reasons, most Americans obtain their health coverage through their employers. And while every dollar spent by a business for health insurance is equally as deductible as a dollar spent on wages, benefit spending is not subject to the myriad payroll taxes levied by numerous levels of government.
Real health insurance reform could reset this dynamic. Americans could be less reliant on their employers for insurance programs, buying what they need in the market — or, in ACA parlance, on “the exchanges.” We could eliminate some of the perverse incentives created by the tax code and ObamaCare, through which hiring “independent contractors” alleviates the legal requirement of businesses to offer insurance.
And we could treat health insurance as real insurance — coverage for when something goes really bad and costs climb really high. For routine health care, individuals should be free to shop the market and find providers who deliver the level of service they expect at a price they can afford.
Outsourcing the financing of medical care via insurance agencies creates paperwork and cost with little value; in 2011, practices spent $83,000 per doctor to bill third parties — insurers, employers, or the government — for care. That $83,000 was baked into the costs charged by providers, and does not include increased administrative workloads for the organization paying the bill.
If we can expect insurers to do less, their costs go down. When their costs decrease, premiums decrease. And as premiums decrease, consumers can leverage those savings to buy their own health care directly. For example, if you live in South Portland, you can buy an annual membership to a family practice for $550 all-in.
So if Congress gets its act together, we can find a solution other than setting the behemoth of government against the leviathan of health care industry. We can put dollars back in the pocket of every American, and give them the ability to choose their own care. And if we treat insurance like insurance, then Gov. LePage’s suggestion of a MEMIC-like health program can take flight.
The vehicle already exists. The GOP-led effort to reform Maine’s health insurance market in 2011 created MGARA — the Maine Guaranteed Access Reinsurance Association. It serves as a stop-gap if insurers see large claims from individuals with major health problems or pre-existing conditions. It is a market-driven program facilitated by government to help control costs.
Think we can get Bernie Sanders on board?