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Sunday, December 20, 2009

LEAHY HEALTH CARE REFORM VISION - ALTERNATIVE TO DEMOCRATIC HEALTH CARE REFORM PLAN


by JC Leahy

Current Democratic health care "reform" proposals, including both the Senate and House health care bills, assume that (1) everyone needs health insurance, (2) competition occurs when consumers have choices among health care insurance plans (3) health care spending in America is at PROBLEM levels and needs to be reduced (beginning with a $500 billion medicare hit on our parents) (4) an amazingly huge Federal bureaucracy is needed to manage distribution of health care resources, and (5) the Federal Government is capable of safeguarding our funds to pay for health care.

By contrast, the Leahy Health Care Reform Vision assumes that (1) everyone needs access to health CARE, (2) health care spending is a GOOD thing as long as the consumer is getting a good value for his/her money, (3) individual people and their families are the best judges of good value, (4) competition occurs when patients select specific health care services and products DIRECTLY FROM PROVIDERS based on benefits and PRICES (5) paying a huge, expensive Federal and insurance bureaucracy to spend our very own health care money would be fundamentally stupid, and (6) money for helath care is best safeguarded by private ownership.

Here are some advantages of the Leahy Vision:


** Complete portabality when you change jobs.
** No exclusion of pre-existing conditions
** Patients, not bureaucrats, decide what is covered.
** No new Federal bureaucrats are required.
** Medicare is strengthened and preserved, not raided.
** Our childrens' future is not mortgaged to the Chinese .
** Employers become freed to create jobs.
** Health care prices are controlled by supply and demand.
** Wealth is safeguarded by private ownership.
** Without regard for private-pay status, everyone pays fair prices.

12-Point, 2-Page, Leahy Health Care Reform Vision:


1. Reform Health Care Cafeteria Plans – Step one is to remove the use-it-or-lose-it provisions of health care cafeteria plans! (See earlier Journal article for an explanation of health care cafeteria plans.) All you have to do is allow unused balances at the end of every year to carry forward, and allow them be managed exactly like 401k’s.

2. Create Corresponding Plans for the Self Employed

3. Mandate Health Care Savings - Collectively, the plans contemplated in #1 and #2 we will call, Neighbor Bill Accounts. Every man, woman, and child in America who is legally employed will be highly incentivized to contribute not less that 9% and not more than 15% of gross earnings to a Neighbor Bill Account. Every self-employed person will be likewise incentivized to deposit the same percentages to Neighbor Bill Account based on Schedule C gross margin, but only to the extent that there is a business net profit.

4. Provide for Management and Expenditure of Health Care Savings - We will employ a special VISA-like debit card to spend from our Neighbor Bill Accounts. This debit card will be spendable exclusively at places that exclusively sell health care services or products. For example, your VISA debit card could be used at a hospital, a doctor’s office, a healthcare-only website, or a healthcare-only counter at a local pharmacy. Using a simple VISA card will free doctors and hospitals of their claims-processing nightmare. Insurance administration costs will fall to near zero.

5. Provide for Control by the Little People - At their owners’ discretion, Neighbor Bill Accounts may be used to pay for one’s own health care expenses – or one’s spouse, or child, or brother, or niece, or mother-in-law, or lover, or significant other, or even for the health care expenses of a neighbor. The only restrictions will be that (1) funds may only be used for health care, (2) with an important exception I’ll detail below, funds may not be used to pay health insurance premiums, and (3) the owner of the funds may not receive any sort of goods, services, tax deductions, or other kickbacks for paying others’ health care expenses. The reward for such payments is simply not to be in this world.

6. Tax Employer-Provided Health Insurance - Currently, if an employer provides health insurance to employees, the employer is allowed a tax write off for 100% of the insurance cost; and, the employee does not have to include the corresponding amount in his taxable income. This asymmetry is unusual in the tax code and amounts to a special subsidy of employer provided third-party-reimbursement-type health care. This subsidy has created the current, insane societal reliance on employer-provided health insurance. Remove the subsidy. This will gradually free employers of their nightmarish burden of health care costs In the meantime, it will also generate tax revenues.

7 Mandatory Catastrophic Health Care Insurance - Every man, woman, and child in America who has a Neighbor Bill Account must pay for private catastrophic health care insurance. This is the only type of insurance premium that may be paid out of Neighbor Bill Account funds. People with families must have policies that cover their children and non-working spouses. Health care expenses in excess of a high deductible amount will be covered in full by these insurance policies. The annual deductible amount will be $2,000 per person or 5% of the beginning-of-year balance of their Neighbor Bill Account, whichever is higher. The $2,000 amount will be indexed for inflation each year. This universal, mandatory private catastrophic health care insurance will protect the little people from financial wipe-out. The cost to Government will be around zero.

8. Simple Tort Reform - A shockingly large percent of health care services are performed not for clinical expediency but to shelter providers from malpractice trial lawyers. Congress will reform this paradigm by legislating that if you sue anyone in Federal court for malpractice or negligence, and you fail to win on at least one, single point, you will pay half of the defendant’s legal fees and other associated costs. In this way, litigants with slam-dunk-valid claims will be free to pursue them in court, but others will think twice before filing frivolous lawsuits. We, the Clark Kents of America, must force our individual state governments enact that identical rule for state courts.

9. Restrict Employer Write off of Health Insurance Expenses - Currently, certain business expenses are not fully deductible for income taxes. For example, business meals generally are only 50% deductible. In like way, make the employer’s expense for employee health insurance only 50% deductible. This will produce tax revenues and gradually encourage the shift away from employer-provided third-party-payment plans to individually-controlled-and-safeguarded Neighbor Bill Accounts.

10 Abolish the Self Employed Health Insurance Deduction - The Neighbor Bill Account deduction replaces the Self Employed Health Insurance Deduction. The former encourages third-party-payment plans, while the latter is individually controlled.

11. Maintain and Strengthen Medicare-Medicaid - Medicare and Medicaid are in danger of eventual collapse because (1) the population is aging, and (2) they are third-party-payment plans. We can save Medicare and Medicaid with the following just and simple rule: Anyone who has a balance in a Neighbor Bill Account must use those funds before tapping Medicare or Medicaid. This will relieve pressure on Medicare-Medicaid resources, and save the safety nets for those who need them.

12. Establish a commsssion to evaluate existing barriers to the education of physician specialists, and to propose solutions to free medical students to enter the spcialty of their choice.

The Leahy Vision will gently transform our failed health-care financing system dominated by institutional players and third party payers, to a system of individuals and families in control of their own destinies and  empowered by their own resources. The royalty of the health care financing bureaucracy will be de-throned. The future will be free to blossom. Vast sums of money will be set aside for health care and safeguarded by vigilant owners. These sums of health care money with stay with its owners no matter how often they change jobs -- providing complete portability.  It will always be available to cover preexisting conditions.  Catastrophic health insurance will protect us from financial wipe-out. Medicare and Medicaid will protect the poor and the elderly. Most payment processing will be as simple as swiping a VISA card. The little people will spend and save health care resources as they think wise. They will never again be told, like my late neighbor Bill, that treatment they desperately need is not covered by the plan, or can only be obtained by lengthy waiting for complicated appeals. Employers will no longer stagger under the burden of health care costs. Job-creating small employers will get their second wind from a reduction of their income and self-employment taxes. Large employers, over time, will have the crushing burden of employee health care expenses lifted from their shoulders. Medicare and Medicaid will be secured. Doctors and hospitals will be cured of the expensive headache of filing and collecting insurance claims. They will, however, need to produce price estimates and bills that patients can understand and accept.

The future is exciting. It only requires is that you – personally – somehow, in your own way, with your own talents, stop masquerading Clark Kent, get off your haunches and make it happen – starting now, starting today. To Nancy Pelosi, Barack Obama and Hillary Clinton, we must say: YES WE CAN!!!! 

ACTION NEEDED:

Contact your senator and congressional representatives. Tell them to scrap the current bills. Demand they study the Leahy Health Care Reform Vision.

Raise awareness: Email a link to this article to everyone you know.

Today, please.

JC Leahy

2 comments:

Alden said...

Sounds Good! Sounds Very good!

JC Leahy said...

from the e-mail box:

Thank you for stopping by with the homemade pie, it was delicious and very much appreciated. I'm sorry I wasn't here when you came by.

Regarding the Leahy Plan: I see several problems. First, I am not convinced that anyone in power will listen to conservative ideas.

Second, the choice of names does not help (thousands of people would read a “Palin Plan”... it has been said that there is no limit to what you can get done if you don't care who gets the credit).

Third, I cannot imagine anything less productive than writing Congressman and Senators.

Maybe there are ways we can make a difference, and probably we can do more working together than working by ourselves. I commend you for trying to make a difference, but I'm afraid I do not see much hope in your approach.

For example, an approach which could possibly get some traction would be to insist that campaign promises be included in the final plan. Another approach which might work would be to interview people who would not be covered under the plan, and to record their perspectives and disenchantment. Another approach which could work could be to express the $500 billion Medicare cuts in terms which are possible to understand.

If you would like to discuss this further, I would like to invite you to come by on Tuesday evening. Each Tuesday evening, my brother Greg sits with me so that my wife can get a break. We frequently discuss politics (although neither of us feel we can make much of a difference).

Thanks again, and take care,

Dave, Maryland