Re: [Winona] Medical-loss ratios of largest for-profit insurers

[Craig Brooks]

[Winona Online Democracy]

I asked Kip Sullivan for help on this topic.  Here's his response to Paul's thoughtful comments. 

If interested - Kip is with the Minnesota Universal Health Care Coalition

http://www.muhcc.org/

He has a book out - "The Health Care Mess"

http://www.authorhouse.com/

 

Craig Brooks

Kip Sullivan <[EMAIL PROTECTED]> wrote:

Craig,

 

    You're welcome to publish this answer below.

 

    I don't understand item 4 in Paul's summary of his proposal, which says Medicare currently "contracts payment processing to providers," nor item 8, which says "cost control" will be achieved with "electronic hard data," so perhaps I'm missing something. It appears to me Paul is not talking about a single-payer system, but is focused exclusively on how to pay for universal coverage under any system, including the current multiple-payer system.

 

    Medicare does not "contract payment processing to providers." It contracts with insurance companies to process claims. Providers (doctors and hospitals) absorb the cost of filing claims with Medicare, as they do with all insurers. Neither Medicare nor any other insurer in America that I know of pays providers, with or without contracts, to prepare and submit their own claims.

 

    Single-payers, as you know, achieve control over providers with hospitals budgets and fee and price limits (and it reduces administrative costs by replacing mult iple insurers with one payer). I don't know what Paul means by control with "electronic hard data."

 

    So it appears to me Paul's proposed financing method could apply to universal coverage under any system, including the current multiple-payer system.  

 

    I don't like this method of financing. It's more unfair than it needs to be, and its more expensive than it needs to be.

 

    It's more unfair than it needs to be because the 7.5%-of-income deductible amounts to a flat tax. I prefer a progressive tax. (A flat tax takes the same proportion of income regardless of income; a progressive tax takes a rising proportion of income as income rises). Moreover, a health system that requires low-income, and even middle-income, people to hand over 7.5% of their income is going to deter a huge minority of the cou ntry -- possibly a majority -- from seeking necessary health care. That's the fundamental problem with catastrophic insurance of any form -- everything you want people to buy, especially preventive services and goods (e.g., drugs) that prevent illness, people buy a lot less of.

 

    Paul's proposed tax is more expensive than it needs to be. We already have a tax collection system in place. It's the personal income tax at the state and federal level. Why piggy-back another tax collection system on top of the existing system? Why not just add an earmarked surtax to the state or federal income taxes? I understand the political difficulties of doing that (Wellstone's single-payer bill got around this by relying on a melange of taxes, including an ammo tax, payroll tax, and income taxes), but if fairness and effectiveness in terms of delivering care to people who need it are our primary criterion, then my proposal seems to be th e best option. Moreover, any financing system that requires someone somewhere to monitor all expenditures below 7.5% of income is going to add to expense. I understand that a monitoring system that relies smart cards is probably more efficient one that relies on patients to stick receipts in shoe boxes and file lots of paper with the IRS once a year, but such a monitoring system is still an added layer of expense to an already expensive system.

 

    Whether we achieve cost control with a single-payer or not, let's not advocate catastrophic coverage. If we don't advocate catastrophic coverage, then we don't have to worry about how to monitor whether people have met their catastrophic deductible, and we also won't have to worry about whether people are refusing to seek the services the really need.

 

Kip

----- Original Message -----

From: Paul Double

To: Online Democracy

Sent: Wednesday, March 22, 2006 9:09 AM

Subject: [Winona] Medical-loss ratios of largest for-profit insurers

[Winona Online Democracy]

---

A single payer can be simple

 

1)  Every tax payer would be required to spend 7.5% (Current IRS Disallowance) of the reported taxable income in the prior year which becomes their deductible for the current year.  Medical expenses include Chiropractic, Dental, Medical, Medical Supplies, Non Traditional, Prescriptions, Psychological and Vision

 

2)  Everything over the 7.5% is paid by the government as catastrophic coverage.

 

3)  All purchases are tracked with a smart card to insure the deductible is paid which is charged at the time of first use in the then current year based on the prior tax year filing.  The current cycle year is July 1- June 30 based on calendar years for establishing the tax year base for the deductible.  This allows the period January to June for taxes to be processed for the prior year and the data to roll into the data base establishing the base line for the deductible.

 

4)  The Federal government contracts the payment processing to providers, the same as they currently do for Medicare, for 3% or less.

 

5)  Coverage is afforded at birth to age 65.  Medicare remains the same except Part D is added using the Medicare 3% payment system eliminating insurance.

 

6)  The cost less than $1.50 per month times each person’s age, adult or child paid for by either an employee or employer tax.

 

7) All federal employees and Congress would become a part of the plan with no exceptions.

 

8) Cost control of providers is achieved with electronic hard data based on actual payment processed.

 

 

The solution is logical, affordable and easy to put in place.  The political will to do it is not yet there! 

 

Paul Double

 

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