CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Friday, July 24, 2009
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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7 Comments:
If the republicans had fully funded the high risk pools in states part of the gap that is not listed would be covered. That is people with pre-existing conditions that can not be covered by a voluntary insurance product. (Adverse selection makes the insurance not work). Such pools exist in some states but due to admin funding not all exist. Alternativly make it the case that if you are denied coverage by some number of companies you can buy into medicaid
"If the republicans had fully funded the high risk pools in states part of the gap that is not listed would be covered"...
Who was going to pay for that funding? YOU?
It always seemed to me that one of the largest contributors to the high cost of health insurance was catastrophic illnesses, such as cancers, heart disease, MS and others. At the same time these type of illnesses can leave a person totally on the medicaid plan if they were between jobs. Accordingly, one idea is to allow government floors for these problems and at the same time require private plans to not to deny on the basis of pre existing conditions. The party may have a higher rate than an otherwise healthy person but it would not be so high due to the taxpayer participation that they could not afford it.
Obviously, the illnesses would have to be defined and it could get tricky due to lifestyle choices that bring on the illnesses. It would be interesting to have a breakdown of the costs for insuring a pool of people whereby you could define the main contributors to the rates.
On the one hand I detest the government taking it over but at the same time would not object to a floor for those unfortunate to incur these life threatening medical issues. Many of these treatments can cost hundreds of thousands and millions and therefore potentially erase a lifetime savings.
Unfortunately, the current plans are not interested in this type of approach they are only interested in a total takeover and control which will result in rationing.
The best way to fix it is to get insurance companies out of routine care. If people carried only major medical and paid for their kids' vaccines themselves, the cost of a doctor visit wouldn't be $200.
Every layer of overhead that's added is an extra cost.
The second best solution is the 50 state solution. 50 experiments are far superior to one mandate.
Angela,
Try google searching "lawsuit" crossreferenced with the word "health". # of hits: 7,120,000
In addition to high liability insurance costs and outlandish settlements, millions of dollars is spent in defensive medicine with doctors ordering tests which to protect themselves from potential lawsuits.
Minnisota Dept. of Health Report gives some idea of how much litigiousness is costing.
QT, there is no doubt in my mind tort reform is also an added cost due to a) high insurance rates and b) tests that would not have been done if the physician was not cya'ing it.
Note, none of this is in any of the plans nor is it being broadcast anywhere.
For what it's worth, Rush Limbaugh reported the number 12M people in this country legally or illegally who truly cannot afford health insurance for themselves; that is as good as any number I have heard, and the govt could provide insurance for all of them for $29B per year (again, per Rush). My recommendation, similar to some of what is stated above and which Rush basically also recommended,is the govt fix the litigation/tort problem (juries reward ridiculous sums for malpractice, hospitals and I assume doctors simply settle most suits because most suits can be settled for less than the cost to defend them, malpractice insurance for specialist ran $300K-$400K per year a few years back, doctors and hospitals take every test possibly related to the patient's condition to provide CYA defense, and these additional CYA costs are passed along to paying customers and/or insurance companies), the govt or insurance could catastrophic coverage (the thing people fear) with a high deductible of say $5K-10K per person per year for a cost of say $100 per person per month, and the govt could provide total insurance coverage for the 12M truly poor for $29B per year total as already stated (the so-called stimulus bill just enacted is $780-something B, added to the country credit card to be paid off by our children and grandchildren (taxes, who knows how high, maybe 70% of lifetime income) or be paid for by everybody over time with inflated dollars of say 2-3 times the current inflated dollars value (that are about 95% reduced over the last century), and finally everyone would shop around for the best deal for routine stuff which would be say $200-$300 per year. If you have dietaries or something like that, you pay the cost which is maybe $400 per year (many diabetics pay those costs already).
Of course, the democrats and Obama will never enact true tort reform, because trial lawyers contribute too much to democrats and tort is their bread-and-butter, and the republicans never will either because trial lawyers will start contributing too much to republicans if they ever get a filibusterer-proof senate. Also and of course, the true free-market health care would also not truly provide the total control the govt wants, such as taxing sugary foods, taxing petroleum products, punishing for obesity or lack of exercise, etc.
JCarr
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