Healthcare Reform Needs Clearer End Goals

This week President Obama’s administration sent tweets and e-mails touting the benefits of healthcare reform. It’s clear that they haven’t worked out the details of what they’re calling for, perhaps because they do not know what’s politically palatable in Congress. As a result, the list of eight basic consumer protections is vague.

No discrimination for pre-existing conditions
This makes no sense to me. What’s to stop someone from carrying no insurance or little insurance, and then buying a high-end plan once they get sick? The idea behind insurance is that you pay on a regular basis and make a claim in the unlikely event a peril affects you. If there truly is no discrimination for people who are already sick, premiums will be significantly higher.

No exorbitant out-of-pocket expenses, deductibles or co-pays
My insurance policy has a $4800 deductible. I’m guessing they’d consider that exorbitant. So even though the insurance company and my family are happy with the contract we have had for the past four years, the agreement would be disallowed. We would have to buy a more expensive plan with a higher premium even though we don’t want to pay for insuring minor things.

No cost-sharing for preventive care
This means insurers have to pay for most or all of preventative care. My plan already covers a good deal of preventative care, probably because the insurer thinks this will decrease claims that exceed the deductible. I don’t see why the government has to mandate this. I’m either going to pay for regular checkups when I get them or as part of my premium. Why does the government want to mandate that I pay it as part of my premium?

No dropping of coverage if you become seriously ill
I think this is already how it works. My understanding of the agreement I have with my insurer is that I pay them a significant bit of money each month, and they will pay if I get sick. They can’t end the agreement just because I get stick.

No gender discrimination
I do not know what this means. I guess it means they can’t charge women of child-bearing age more because of the increased risk associate with a possible pregnancy. This spreads the cost of this risk to men. I don’t think this is a big deal either way.

No annual or lifetime caps on coverage
Whenever I buy insurance, they always offer me different lifetime caps. I can choose a lower one to save money. I have always chosen a high cap. Under Obama’s plan, I won’t have a choice. I will have to buy the more expensive plan with a higher cap. It won’t affect me, but why take away my options?

Extended coverage for young adults (on family plans)
I don’t see how this matters one way or the other. This lets parents pay one big premium instead of having the parents and kids pay separately. This makes no difference.

Guaranteed insurance renewal so long as premiums are paid
This is a good policy. Employer plans always make me nervous because if I change jobs I will have to change insurers within 18 months. What if I got sick before changing jobs? The peril would have already happened, so I couldn’t buy insurance against it. I ought to be able to maintain the insurance I have. The risk of a protracted illness should be something the insurer takes on when they accept you as a client.

So what’s going on with this e-mail the administration sent out? My gut feeling is the problem is modern healthcare is expensive, but people wish it weren’t. Politicians are moving the pieces around as sort of a shell game hoping that if they can rearrange the rules just right, paying for this expensive service will seem less onerous. Here’s my impression of the front-runner plan politicians are cooking up to help people avoid reality:

1. Make basic inexpensive plans illegal.
2. Tax very expensive plans that provide for “executive” medical care.
3. Borrow $100 billion a year to offset the cost of premiums, pushing the cost of paying our premiums to the next generation.
4. Increase taxes on the wealthy to offset the cost of premiums.
5. Pretend premiums are being reduced through increased efficiency due to technology and through better bargaining with providers.

This is disgraceful. I always dreamed if someone like Obama were elected president and we had a Democratic Congress we would do something like declaring “war” on poverty again. Instead they’re spending all their efforts trying to offer the middle class ways to weasel out of paying for something they want.

The healthcare plan is still being worked out. I am optimistic it could be a lot better than what I’m imaging. Politicians need to write up something analogous to an engineer’s “product requirements document” calling out exactly what they’re trying to accomplish with this reform. Then they need to draw up a spec of how they’ll measure success. Every engineer knows it disastrous to start a project based on vague marketing promises. The president and groups within Congress need to state clearly what their end goals are with healthcare reform.