Over the past several months I have taken you on a journey of education by which we have explored the root causes of the problems we are facing, philosophical arguments for freedom in health care, possible free market reforms, the financial costs involved with passing and not passing reform, the powers at work in health care reform, and the compromises shaping up in Washington.

The perspective I have offered to you is one not based on self interest, party, or politician – which always leads to perpetual blindness. The perspective I have offered is based on free thinking, information, and independent principles.

However, I have not pretended to be without an opinion. I only hope I supported it with fact, sound theory, and convincing argument. If I was a bit zealous at times, I hope it was never in bad taste. The powerful forces at work are certainly zealous in their causes. Those who believe that Mankind was endowed by their Creator with certain unalienable rights should be even more so; for we are not fighting to take anything – not money, life, or liberty – from anyone or any institution. On the contrary, those who espouse True Reform are those who fight for Equality for all, Justice for those who have been the recipients of Injustice and Life for all Americans – at the expense of none and for the benefit all. This is the kind of reform that has the greatest chance of delivering better health care for Americans, delivering on the American dream, and of getting us closer to a better society.

We now finally reach the end and conclusion of this exhaustive inquiry. Thank you for reading along. Now write to Your Representatives and stand up for what you believe to be the right path forward.

Please Click Here to Write Your Representatives

Now that you have seen some of the possible reforms that should be taken to bring about true change in health care and foreseen the likely benefits derived there from, and seen the powers that are at work in Washington, it is good to give a quick examination to the President's plan and what it actually proposes. The following is the exact text of the President’s plan taken from the White House website (footnote 1) as posted on September 9th. I have taken each point and given a brief opinion for the benefit of the reader in italics.

While you read along, see if you can see what lobbyist each point appeases or makes a compromise with.

Here is the President's Plan:

If You Have Health Insurance
More Stability and Security

· Ends discrimination against people with pre-existing conditions. Over the last three years, 12 million people were denied coverage directly or indirectly through high premiums due to a pre-existing condition. Under the President’s plan, it will be against the law for insurance companies to deny coverage for health reasons or risks.

Translation: Everyone is going to have to pay a lot more for their health care. Rather than make a blanket regulation that all plans must have this waived, products need to be developed based on cost and underwriting, as well as plans where there are no pre-existing conditions, to ensure that each American can receive the kind of health care that best fits their needs.

· Limits premium discrimination based on gender and age. The President’s plan will end insurers’ practice of charging different premiums or denying coverage based on gender, and will limit premium variation based on age.

Translation: Although I agree that premiums should not change based on gender, I disagree that premiums should not be adjusted based on age. The affect of this is that it would push up prices for every other insured individual. Although there should be products in the marketplace that offer this type of coverage, it should not be the only product. This kind of mandate severely limits the marketplace's ability to provide individual coverage for the low income and unemployed as the prices would be unbearable.

· Prevents insurance companies from dropping coverage when people are sick and need it most. The President’s plan prohibits insurance companies from rescinding coverage that has already been purchased except in cases of fraud. In most states, insurance companies can cancel a policy if any medical condition was not listed on the application – even one not related to a current illness or one the patient didn’t even know about. A recent Congressional investigation found that over five years, three large insurance companies cancelled coverage for 20,000 people, saving them from paying $300 million in medical claims - $300 million that became either an obligation for the patient’s family or bad debt for doctors and hospitals.

Translation: This is a very good change that should be implemented.

· Caps out-of pocket expenses so people don’t go broke when they get sick. The President’s plan will cap out-of-pocket expenses and will prohibit insurance companies from imposing annual or lifetime caps on benefit payments. A middle-class family purchasing health insurance directly from the individual insurance market today could spend up to 50 percent of household income on health care costs because there is no limit on out-of-pocket expenses.

Translation: This provision places an ever larger cost on the insured and does nothing to lower costs. This kind of provision will actually increase costs across the board. Insurance is meant to minimize risk. A person should be able to purchase a plan based on the amount of risk they are willing and able to assume. Some product innovations that carry the spirit of this provision could be plans that state that out-of-pocket maximums will not exceed a percentage of a person's annual income. However, mandating that there will be no lifetime maximums and set out-of-pocket maximums for all insurance products will reduce choice in the marketplace and increase costs for all Americans.

· Eliminates extra charges for preventive care like mammograms, flu shots and diabetes tests to improve health and save money. The President’s plan ensures that all Americans have access to free preventive services under their health insurance plans. Too many Americans forgo needed preventive care, in part because of the cost of check-ups and screenings that can identify health problems early when they can be most effectively treated. For example, 24 percent of women age 40 and over have not received a mammogram in the past two years, and 38 percent of adults age 50 and over have never had a colon cancer screening.

Translation: It is important to remember that nothing is free – especially not in health care. It must be paid for – either in a low co-pay or in an increased monthly premium. It has to be paid for. With that said, I do believe that there should be some basic standards to qualified health plans – preventative care being one of them.

· Protects Medicare for seniors. The President’s plan will extend new protections for Medicare beneficiaries that improve quality, coordinate care and reduce beneficiary and program costs. These protections will extend the life of the Medicare Trust Fund to pay for care for future generations.

Translation: The true reason the government is heading to a financial mess is because of Medicare and the likely costs the taxpayer must assume. Although it is impossible to truly forecast what those unfunded liabilities are, it is safe to assume that it will be expensive. One should no more wish to extend Medicare than they should wish for a beating. Medicare must be secured for those who have it and other options must be given to those who would otherwise qualify for it. This, and the other free market reforms, is the best course for solving our looming financial crisis and for providing care to our seniors.

· Eliminates the "donut-hole" gap in coverage for prescription drugs. The President’s plan begins immediately to close the Medicare "donut hole" - a current gap in its drug benefit - by providing a 50 percent discount on brand-name prescription drugs for seniors who fall into it. In 2007, over 8 million seniors hit this coverage gap in the standard Medicare drug benefit. By 2019, the President’s plan will completely close the "donut hole". The average out-of-pocket spending for such beneficiaries who lack another source of insurance is $4,080.

Translation: Because the People of the United States are insuring the elderly we should provide them with the care they deserve. However, with America's aging population, Medicare in all its parts is an unsustainable program that does nothing for the free market. It may provide a service to the elderly, but certainly not the best one nor the one they deserve. No amount of government improvements in this program will ever change that. The people and their creative forces through the marketplace is the best and surest way to provide quality, value and Justice in health care. This is also an obvious win for the pharmaceutical companies.

If You Don't Have Insurance

Quality, Affordable Choices for All Americans

· Creates a new insurance marketplace – the Exchange – that allows people without insurance and small businesses to compare plans and buy insurance at competitive prices. The President’s plan allows Americans who have health insurance and like it to keep it. But for those who lose their jobs, change jobs or move, new high quality, affordable options will be available in the exchange. Beginning in 2013, the Exchange will give Americans without access to affordable insurance on the job, and small businesses one-stop shopping for insurance where they can easily compare options based on price, benefits, and quality.

Translation: The health insurance exchange is an excellent idea that must be included in reform. However, the President’s version of the exchange excludes everyone that has or is eligible for group or government insurance. It protects insurance companies, does nothing to improve competition and solidifies the employer and government sponsored health plans. It keeps the status quo for those with insurance.

· Provides new tax credits to help people buy insurance. The President’s plan will provide new tax credits on a sliding scale to individuals and families that will limit how much of their income can be spent on premiums. There will also be greater protection for cost-sharing for out-of-pocket expenses.

Translation: Rather than encourage health insurance which furthers the monopoly of the insurance industry over health care, the government should ensure equal tax treatment for all health care costs – be it insurance, co-ops, health shares or out-of-pocket expenses.

· Provides small businesses tax credits and affordable options for covering employees. The President’s plan will also provide small businesses with tax credits to offset costs of providing coverage for their workers. Small businesses who for too long have faced higher prices than larger businesses, will now be eligible to enter the exchange so that they have lower costs and more choices for covering their workers.

Translation: Rather than deepen the hold of employer sponsored health plans, the President and Congress should seek to open up the health care marketplace and end the complete hegemony of employer sponsored health plans over American health care.

· Offers a public health insurance option to provide the uninsured and those who can’t find affordable coverage with a real choice. The President believes this option will promote competition, hold insurance companies accountable and assure affordable choices. It is completely voluntary. The President believes the public option must operate like any private insurance company – it must be self-sufficient and rely on the premiums it collects.

Translation: Reasons enough have already been given that demonstrate this proposal to be unjust, costly, destructive to the marketplace, inefficient and unsustainable. Rather than seek to reduce the marketplace, the president should seek to build the marketplace.

· Immediately offers new, low-cost coverage through a national "high risk" pool to protect people with preexisting conditions from financial ruin until the new Exchange is created. For those Americans who cannot get insurance coverage today because of a pre-existing condition, the President’s plan will immediately make available coverage without a mark-up due to their health condition. This policy will offer protection against financial ruin until a wider array of choices become available in the new exchange in 2013.

Translation: The high risk pool is an excellent recommendation and should be included in the health care reform plan. However, this should not be part of a National Health Plan and should be state specific.

For All Americans
Reins In the Cost of Health Care for Our Families, Our Businesses, and Our Government

· Won’t add a dime to the deficit and is paid for upfront. The President’s plan will not add one dime to the deficit today or in the future and is paid for in a fiscally responsible way. It begins the process of reforming the health care system so that we can further curb health care cost growth over the long term, and invests in quality improvements, consumer protections, prevention, and premium assistance. The plan fully pays for this investment through health system savings and new revenue including a fee on insurance companies that sell very expensive plans.

Translation: I agree with the principle whole heartedly. Today's generation should be responsible for today's expenses. However, setting a fee on “very expensive plans” ultimately means setting a new tax on plans that employ elderly and unhealthy individuals. Plan design is only one factor in health care costs. The largest factor is the utilization of the plan. The more people use it the more it will cost them. Accordingly, the most expensive plans are the ones that are the most used. And presumably they are the most used because of the unhealthy or older workforce. Furthermore, the real translation is: your taxes are guaranteed to go up. If it’s not going to add to the deficit it is because it will be paid for which means that the taxes will have to be increased. I have already shown that based on the House version of the bill, the wealthy alone will not be able to pay for this legislation – despite what they may say. The numbers don’t add up.

· Requires additional cuts if savings are not realized. Under the plan, if the savings promised at the time of enactment don’t materialize, the President will be required to put forth additional savings to ensure that the plan does not add to the deficit.

Translation: Although this language is nebulous, it is impossible to disagree with the concept. However, what will be cut? Will the government actually cut spending on health care? Will it be politically feasible to begin cutting a certain kind of cancer drug, therapy or technique because it costs too much? It is unlikely. The concept is noble. Putting it into practice however will be very difficult. The government has only increased spending over time. History shows that cutting spending won’t happen.

· Implements a number of delivery system reforms that begin to rein in health care costs and align incentives for hospitals, physicians, and others to improve quality. The President’s plan includes proposals that will improve the way care is delivered to emphasize quality over quantity, including: incentives for hospitals to prevent avoidable readmissions, pilots for new "bundled" payments in Medicare, and support for new models of delivering care through medical homes and accountable care organizations that focus on a coordinated approach to care and outcomes.

Translation: Quality over quantity is a concept that must be included in the reform.

· Creates an independent commission of doctors and medical experts to identify waste, fraud and abuse in the health care system. The President’s plan will create an independent Commission, made up of doctors and medical experts, to make recommendations to Congress each year on how to promote greater efficiency and higher quality in Medicare. The Commission will not be authorized to propose or implement Medicare changes that ration care or affect benefits, eligibility or beneficiary access to care. It will ensure that your tax dollars go directly to caring for seniors.

Translation: Any measure that can improve the value of the service and lower the cost is one that seems to need no defense.

· Orders immediate medical malpractice reform projects that could help doctors focus on putting their patients first, not on practicing defensive medicine. The President’s plan instructs the Secretary of Health and Human Services to move forward on awarding medical malpractice demonstration grants to states funded by the Agency for Healthcare Research and Quality as soon as possible.

Translation: Although medical malpractice is a factor in the rising health care costs, it is small. This is a complicated problem and one that is included because the Republicans have been calling for this kind of reform for years. It is tangential to true health care reform.

· Requires large employers to cover their employees and individuals who can afford it to buy insurance so everyone shares in the responsibility of reform. Under the President’s plan, large businesses – those with more than 50 workers – will be required to offer their workers coverage or pay a fee to help cover the cost of making coverage affordable in the exchange. This will ensure that workers in firms not offering coverage will have affordable coverage options for themselves and their families. Individuals who can afford it will have a responsibility to purchase coverage – but there will be a "hardship exemption" for those who cannot.

Translation: Again, if the President wants to reduce health care costs and ensure that all Americans have coverage, he must move away from this kind of model. This goes in the exact opposite direction than the end we desire: quality health care for each American. The president’s direction keeps the monopoly of the insurance industry and maintains the dominion of the employer sponsored health plan. Furthermore, fining Americans for not purchasing insurance should never be considered a crime worthy of a fine.

_________________

Now that you know the forces at work, it is easier to see who is really benefiting from this plan. If you go bullet by bullet you will be able to see which lobbyist was at work. Take those same tools and look at the HELP or Baucus bills. It is most revealing.

In sum, the president's plan contains many important provisions that should be included in the final reform bill. However, it is important to realize that it does nothing to fundamentally improve the American health care system. Even the health care exchange in this system would be a lost reform because, with the exception of the public health care plan, it would offer exactly what we have which is exactly the problem we are dealing with. The government plan would only worsen the situation. If anything, the majority of the President’s proposals would weaken the already dying marketplace that does exist and increase costs and taxes for all Americans.

_____________________________________

Footnotes

1. http://www.whitehouse.gov/issues/health_care/plan/

We just summarized the likely outcomes of Free Market reforms. The blessings of such reforms need not be debated as they are obvious to any reader. True free market reform brings about the desired outcome and blesses everyone. If the blessings are so obvious, why then is this not the direction our government is taking us in?

The answer? Because of politics, self interest, a fear of losing power and a belief that the status quo will continue to work in the future as it has “worked” in the past. The answer lies in a compromise among all of these forces represented by the different lobbying bodies in Washington. I am well acquainted with many of them.

These lobbying forces are many and strong. To name a few, they are:

1. The Insurance Industry
2. The Corporate Lobby
3. The Insurance Broker Lobby
4. The Media
5. Politicians
6. Unions
7. The Socialist Movement
8. Doctors & Providers
9. Individual Citizens

By looking at each one of these players you will get a sense for the reforms that will actually come out of Washington and why. I will briefly touch on each one of these.

The Insurance Industry

The insurance industry will obviously fight against several things:

1. Ending their exemption from the Sherman Anti-Trust Act
2. A Public option that would compete with them
3. Opening up competition against co-ops & health shares
4. Opening up competition of insurance companies across state lines
5. The end of the employer sponsored health plan
6. Opening up the exchange to those who already have insurance
7. Cap out-of-pocket maximums
8. Pre-existing condition reform

They will fight for:

1. A mandate that says everyone should have insurance – even at the expense of businesses
2. Tools that allow them to negotiate down prices
3. An exchange that makes it easier for people to buy their insurance who didn’t already have it

The Corporate Lobby

The Corporate Lobby will obviously fight against several things:

1. A mandate requiring them to “pay or play”
2. Repealing the tax deduction on contributions to employer sponsored health plans
3. Not allowing them to participate in the health care exchange
4. Taxation on “Cadillac Plans”

They will fight for the following:

1. Small business exemption to any mandates
2. Credits that make it easier for them to provide health care
3. An open health care exchange

The Insurance Broker Lobby

This lobby will fight against:

1. The end of the employer sponsored health plan
2. Any kind of tax increase on employers
3. Anything that damages the insurance industry

Reforms they will fight for:

1. Reform that would bring more people onto employer sponsored health plans

The Media

I don’t believe they will “fight” against anything. Although they may not cover, or give air time to important reforms such as:

1. Elimination of the anti-trust exemption for insurance companies (they support the media through advertising)
2. In depth coverage of free-market reform

Reforms that most of the media will fight for:

1. A Public Option – within 45 minutes the other day I saw “How American Healthcare killed my Grandfather” and Bill Maher accusing America as being the only developed nation that “get’s rich on people’s misfortunes.”
2. Coverage for everyone

Politicians

Reforms they will fight against:

1. The overt end of the employer sponsored health plan

· Why would they not fight for this? It is because it goes hand in hand with Medicare and Medicaid. Medicare exists only because of the dominance of employer sponsored health plans because most employers don’t insure people after they retire. Therefore, the government can do that instead. Furthermore, Medicaid also exists primarily because of the employer sponsored health plan because employers don’t insure the unemployed or non-working class. Therefore, the government has a program to take care of them too. These are two programs built around employer sponsored health care. By eliminating the employer sponsored health plan and creating a free market, the need for Medicaid and Medicare diminishes and eventually goes away.

2. Direct taxes on the middle or lower class as they are the bulk of the voters
3. Anything that reduces government income (i.e., HSAs, Vouchers, leveling of tax treatment for all health care expenditures)
4. Increasing the deficit as a result of health care – it is politically unpopular and destructive

Reforms politicians will fight for:

1. The increase of Medicaid
2. Stability and continuity for Medicare
3. A public option (for several reasons, including that this is the surest way to raise enough money without making it look like they are raising taxes)
4. Additional tax revenues
5. Pre-existing condition reform
6. Cap out-of-pocket maximums

Unions

Reforms they will fight against:

1. Reforms that limit an employer’s ability to limit retiree medical any time in the future

Reforms they will fight for:

1. A mandate that makes employers cover 100% of their workforce
2. Securing retiree medical insurance

The Socialist Movement

Reforms they will fight against:

1. The repeal of the anti-trust exemption on insurance companies. (The socialist cause is one for more government programs – not open or free markets.)
2. Free market health care reforms

The reforms they will seek for are:

1. A single payer health care system
2. Taxes on the wealthy to pay for it

Doctors & Providers

Reforms they will fight against:

1. A public option that reimburses at the same level as Medicare or lower
2. Pay-for-performance
3. Allowing the government to negotiate directly with drug companies.

Reforms that Doctors & Providers will work for:

1. Employer Mandate
2. Health Care exchange
3. Pre-existing condition reform
4. Reforms that help them earn more money
5. Pharmaceutical companies will try and expand their drug penetration (i.e., end the ‘doughnut hole’ in Medicare)

Individual Citizens

Reforms citizens will fight against:

1. Raising taxes on the majority of Americans
2. Reforms that appear to be un-American

Reforms we will fight for:

1. Better care for all Americans
2. Lower costs

You probably noticed that most of these players don’t represent groups that are trying to open up markets, create competition, end the status quo or truly lower costs. That is the reason why we are not going in direction that would truly benefit America.

There is of course the CATO Institute and other free-market Washington think-tanks that will try to urge Congress in a free market direction. However, they are not supported by the other players – or even a majority of the people. Sadly, freedom doesn’t have a strong lobbyist because most people receive their information from the media, support politicians rather than policies, work for employers, go to doctors, and belong to unions.

Which of these lobbying forces is the most powerful? It is hard to say as each of them carries a tremendous amount of force with them. Because of this, the reform that will ultimately happen will be a compromise between all of these different sources. You can guarantee that it will include “wins” for all of these players.

Freedom, justice and the proper exercise of agency, is predicated upon education and understanding. We can never hope for that from these major players. Being aware of the largest players and the kinds of reforms they desire will enable you to more properly perceive the kinds of reforms being discussed – where they originated and who they benefit. Only then will we be able to accurately recognize the kind of reform being debated in Washington.

Over the past several weeks I have introduced to you various new options and choices that are necessary for creating a vibrant, free market system in health care – some of which are non-negotiable for creating a better America. To summarize what those recommendations are, they are as follows:

1. End the government sponsorship and protection of the insurance industry by removing the anti-trust exemption on the insurance industry forcing them to compete based on products, prices and services

2. Encourage and bring to an equal level Health Shares and non-profit Co-ops to provide additional options and alternatives for Americans to choose from

3. End the dominance of the employer sponsored health care plan which would promote private health insurance for all – the unemployed, the employed but with no insurance, the employed, and the retired

4. Introduce health care vouchers for employees rather than health care plans

5. Reform tax treatment of health care related expenses so they are all treated equally and do not favor one type of plan over another or one type of provider over another

6. Reform and increase the use of HSAs

7. Create a maximum on the amount the uninsured can be charged relative to the insured

8. Freeze Medicare & Medicaid at their current levels

9. Have the government provide vouchers for the low income and retired to purchase private health coverage that fits their needs

10. Introduce an increased tax deduction or credit for assisting family members with their health care expenses

11. Introduce a truly free and open health insurance exchange for all people and all health care related products

12. Pre-existing condition reform

13. Allow insurance plans written in one state to be sold in another state

14. Pay doctors for results and not only for services including the amount charged and warranties

These proposed reforms are not all inclusive. Some others that I have not focused on include:

1. Encouraging wider user of Health Savings Accounts for retirement health care. Health Savings Account contributions by any source would be tax deductible and never taxed upon withdrawal ensuring that health care expenses come first. If each American put aside between 2-4% of their income annually into an interest bearing account, they would be able to pay for most, if not all, of their health care related expenses after retirement (Footnote 1).

2. Freeing up doctors to be able to dictate their prices rather than the insurance companies. This would obviously create a market that truly competes based on price (Footnote 1).
Requiring, similar to our regulations on public companies, that doctors and hospitals disclose their success and failure rate. Patients have a right to know the quality of care they will be receiving. Furthermore, this reform, combined with #2 above, would truly help to create a marketplace that competes on value – quality and price (Footnote 1).

3. Encouraging more direct interaction between doctors and patients through phone and e-mail consultations. Because insurance companies don’t reimburse for this kind of care, doctors don’t provide it. If doctors are freed in their ability to determine prices and services, the market can better take care of the needs of the people in it (Footnote 1).

4. Electronic Record Keeping to build an infrastructure wherein information is more easily passed, efficiently maintained and more productively used for the care of the patient
A free market agency that rates providers based on quality of care and value of services. Such an agency would be similar to the “Energy Star” rating on electronic products. The value of this is obvious.

To sum up the whole of this kind of reform, if all of these reforms were enacted, American health care would be entirely different. All citizens would be able to have health care tailored to their needs and desires – the young invincibles to the aged and infirm, the employed and unemployed or retired. Insurance companies would not only be forced to compete with each other for the first time in modern history, but they would also have to compete for customers with health shares, co-ops, and self insurance. Small businesses are able to help provide care to their staff through vouchers. There are incentives for private plans to emerge. Employers would still be able to compete for top talent by the amount they contribute to private plans through vouchers. The government’s funding crisis becomes minimized by freezing the number of enrolled members in Medicare and Medicaid and simultaneously stimulates the free market by providing vouchers for eligible Americans to purchase private health care based on their needs. Americans have sufficient funds at retirement to pay for their health care and the costs for everyone have been lowered by competition, electronic records, diverse products and options, individual policies written to their needs, public disclosures of performance levels, and “Energy Star” type ratings.

Essentially, the rich and poor, healthy and infirm, employed and unemployed, could all be provided for. Not only that, they would be more effectively and efficiently provided for than had the government done it. Future generations are not taxed to provide for our care today, our reforms bless untold millions of unborn and future generations, government credit is increased and the National character becomes a light of what free will, Justice and the American spirit intended. True reform would bring about true blessings that could benefit everyone.

Compare this kind of reform to that being debated in Congress. Insurance Companies keep their anti-trust exemption, Medicare, Medicaid and the employer sponsored health plan are further entrenched, choice and freedom is not expanded - on the contrary, it is contracted - government growth goes up, quality eventually goes down, government is forced into an unethical situation of injustice and inequity, certain levels and powers to ration care, ourselves and the future are burdened with an unbearable level of greater and greater debt, the family is weakened, the health care industry is crippled by certain elements of central planning, costs for everyone with insurance go up, and the people in the long run are the ones who are hurt. The future is not all dark with the government health care reform, however. There are still some bright spots such as greater access to health care, some insurance reform, and some efficiency and cost improvements which would be blessings for many. However, it isn’t as bright as they would like us to believe it is either.

In essence, the government would not be able to fulfill its role to promote and protect the unalienable rights it was chartered with protecting: Life, Liberty and the Pursuit of Happiness through the protection of Property. Its good intentions would cripple its abilities to deliver the expected outcomes on every front - not just health care.

Freedom and Justice as the means leads to Freedom and Justice as the destination. Free market reform isn’t perfect but it is the only way for us to get as close to perfection as we can. The People can do that. The government can’t.

The possibilities of free market reform are as numerous as are individuals. That is the beauty of the market – we all work together, as free Americans, to fill and meet the various needs of every individual in the manner that is best - providing the best service at the best price. It is the invisible hand that moves to fill needs, provides opportunities, sparks ideas, enhances quality, removes barriers, and, where coupled with proper oversight, blesses the whole society. Some would say it is even guided by Providence – after all, free will was given by Him. The proper exercise of agency is a blessing to us all.

This is the best way for America to proceed. If we had no alternative then I would not be nearly so adamant about this kind of True Reform. However, we have an alternative to the status quo that works better than direction we are going in. Why then is it not going in this direction?

To answer that question, we will next briefly address the various forces and players influencing the health care reform debate.


________________________________

Footnotes

1. John C Goodman, “A Prescription for Americans Health Care” Imprimis, March 2009, Volume 38, Number 3

One additional major reform that should take place is regarding reimbursement methods. One of the important issues being discussed in the current health care reform debate is how physicians should be paid. Presently, the reimbursement model of both the government and private insurers is based on a negotiated fixed fee schedule for billed services. For example, if a doctor performs a CAT scan, the doctor will be reimbursed $x. If they perform a natural birth, they are reimbursed $x. It is a set fee negotiated with the insurance provider.

The discussion underway looks at this from a new point of view: pay doctors based on their performance – or rather, the results of their work. For example, if a doctor performs a CAT scan that leads to solving a person's particular issue, they are reimbursed at $A. If the doctor performs a CAT scan that does not lead to solving a person's medical need, they are reimbursed at some amount below $A.

Part of paying doctors for results is also setting up a type of warranty system as proposed by John C. Goodman of the National Center for Policy Analysis.

He stated, “In terms of quality, another obvious free market idea is to have warranties for surgery such as we have on cars, houses, and appliances. Many are surprised to learn that about 17 percent of Medicare patients who enter a hospital re-enter within 30 days – usually because of a problem connected with the initial surgery – with the result that they typical hospital makes money on its mistakes. In order for a hospital to make money in a system based on warranties, it must lower its mistake rate. Again, the goal of our policy should be to generate a market in which doctors and hospitals compete with each other to improve quality of care and cut costs (footnote 1).”

Surely this will be an important discussion but is one that far exceeds my comprehension of billing or the scope of this work. The factors involved are complicated.

However, this is an option that has great merit. In approaching this topic, it is important to remember that it does not have to be one way OR the other. Insurers can offer different plans that use these different models. Those plans who use the pay for performance model would be purchased at a lower price because it could be assumed that this system would reduce waste and increase results. However, the other option could still be available for the consumer who desired a more secure system. The cost would reflect that decreased risk. Over time the better product would survive.

No method should be mandated as the sole product or offering. The marketplace is about choice and freedom. This payment option should be widely introduced into the market as an option for the consumer and, whereas this part of the market doesn’t exist, it should be incentivized for a short period of time in order to provide the necessary capital, direction and incentive.

By providing alternatives in the marketplace, competition is increased, prices are lowered and individual's needs are met. By paying for performance, waste is eliminated, prices are reduced, and people’s health is more rapidly improved. This is an easy reform to recommend.

________________________________

Footnotes

1. John C Goodman, “A Prescription for Americans Health Care” Imprimis, March 2009, Volume 38, Number 3

People with pre-existing conditions should be able to get health insurance. Pre-existing condition clauses exclude people from receiving care or insurance if they have had a history of disease, ailments, or health risks while they were not insured by a qualified insurance plan. There need to be health care options for these people. That is not negotiable. Leaving them out of the only safety net available is not an option we should accept. However, is the only alternative eliminating all pre-existing condition clauses? No, it isn’t.

The plan proposed by the President, and both the Senate & House bills, require that all pre-existing condition provisions be stricken from every single health care plan. What does this translate into for you and me? It translates into everyone having to pay a lot more for their health coverage because of the automatic risk assumption the insurance carriers will have to assume and the lack of products competing in the market. If we are trying to lower costs in health care, creating one product for all is not the direction to go in. One product means no competition, guaranteed price increases, and no market forces in this area to bring additional value.

What are the alternatives? As with most things, the alternatives lie in widening the field of options.

As with any insurance, there must be an underwriting process to determine if the insurance provider will assume the liability of insuring any particular person. The insurer deserves to know what kind of health the person is in they are being asked to insure. It is only right and fair to do so.

Option 1

With life insurance, as opposed to personal health insurance, there is often a guaranteed issue amount. A guarantee issue is an amount of life insurance a person is guaranteed to be approved for – regardless of any other factor. The amount beyond that is dependent on underwriting approval. Could health insurance not do the same thing? Could an insurer offer certain kinds of coverage (e.g., physicals, primary care doctor visits, emergency room care, certain kinds of treatments, etc.) as a guaranteed issue and offer additional levels of coverage pending underwriting? Even if denied additional levels of coverage, a person could still receive a majority of their needed care through this kind of process.

Option 2

Another kind of health care product could be a plan that does eliminate all pre-existing conditions with no underwriting. Surely the cost of this product would be higher than had they undergone the underwriting process. Nevertheless, this would allow those who need or desire to bypass underwriting to receive all the care they need.

Option 3

A final kind of health care option would be where underwriting is involved but if an individual does have a history of certain kinds of disease or ailment, their private plan is approved at the higher coverage but at a rate that factors in the person's history and likely needs.

For options one and two, there could be an increased tax deduction based on health care premiums for those who would have these kinds of plans. This additional tax relief would help offset for the increased premium.

Are there other alternatives to these three options? Of course there are. This is just the beginning. However, these three options provide for all, both those with pre-existing conditions and those without, to receive the kind of medical care they need and at prices that reflect the level of service they are likely to use. This kind of adjustment would greatly expand coverage options for those in our country who need it most.

This approach also preserves the market’s ability to provide alternatives and a variety of different products. This is a fundamental element to expanding coverage and lowering cost. A one-size-fits-all approach could never do that. Freedom and Justice in health care is the answer to true health care reform.

Imagine what the health care industry would look like if the reforms I have proposed so far were all enacted. Although not yet complete, here is a snapshot of what it is shaping up to be:

Because of the birth of a free market system based on options, variety of products, and competition, all Americans would have access to affordable, private health insurance that is tailored to their needs and is not tied to an employer or government program. The uninsured are able to safely choose and assume the risk of going without insurance and have the risk minimized by equal tax treatment and a percentage cap on the amount charged. If worse came to worst, the family supports the needs of the individual and receives the tax credit from the government to pitch in. The poor and elderly who qualify for Medicare or Medicaid after the reforms are enacted, are given vouchers to private insurance and are empowered to pick a qualified option that is best suited for their needs. Employers are still able to attract and retain top talent through health care as a form of compensation by providing competitive vouchers to private health plans – insurance, co-ops and health shares. This new and vibrant market, invigorated by new players, customers and forces, innovates product solutions for the poor, the rich, the healthy and infirm.

Part of this new structure and environment facilitating this competition is the health care exchange proposed by the president with four adjustments:

1. No Government health plan

2. The exchange includes national health care plans – not just state plans. Opening up the market to our-of-state plans opens the doors to so many more options that are essential to creating choice in health care. The CATO institute reports that “One study estimated that that adjustment alone could cover 17 million uninsured Americans without costing taxpayers a dime (Footnote 1).” The barrier on out-of-state written plans needs to be lifted. It is the equivalent of an iron curtain on health care on a state-by-state basis. This iron curtain protects the insurance companies – not the consumer.

3. Include non-insurance options such as co-ops and health shares

4. Not limit who can participate. Currently, both the house and senate bills on health care limit the participants within the exchange to those who are not eligible for employer or government health care. Accordingly, the exchange in these plans is of benefit to only those without insurance. In effect, the exchange in the current bills does nothing to create a marketplace for health care. These limitations further entrench the employer sponsored health plan and the government’s health care programs. People need to have options and freedom to choose among them.

With these adjustments, the health care exchange proposed by the President and Congress is perfect.

An open and free health care exchange would create the marketplace where individuals could find a health care option that fits their health status, income, and health care goals. Without the kinds of reforms I have discussed in the preceding articles, the health care exchange would be like an out-dated mini-mall on the outskirts of town that no one voluntarily stops by to shop in. Yah, there might be something there but it sure doesn't look promising. In the kind of marketplace I described above, there would be a myriad of options, products and companies to choose from – similar to your favorite shopping mall – where there is something for everyone – all within the reach of the consumer through the exchange.

A free market health care exchange is the perfect vehicle to facilitate the kind of marketplace that will be created as a result of true reform in the health care industry.

___________________________

Footnotes

1. http://healthcare.cato.org/free-market-approach-health-care-reform

We have already discussed two modifications that are needed to address the tax treatment of health care costs:

1. Expand the Role of HSAs
2. End the Preferred Tax Treatment to Employer Sponsored Health Care Plans

We will now discuss two more:

1. Equal Tax Treatment for Individual Health Care Costs
2. Tax Credit for Assuming the Health Care Costs of Family Members

Equal Tax Treatment for Individual Health Care Costs

First, the government should treat all individual health care costs the same – health insurance premiums, co-op premiums, health share premiums, out-of-pocket expenses, etc. Presently, Americans can only deduct health care expenditures that are greater than 7.5% of their adjusted gross income. The average gross income in the US is around $55,000 (Footnote 1). That means the average American has to spend $4,125 before they can deduct any of it from their income taxes. How is that right? We allow every dollar for employer sponsored health care to be tax free but yet the uninsured cannot deduct their own out of pocket expenses if below this level.

There are Medical 529 Flexible Spending Accounts that allow for employees to pay for health care related expenditures with pre-tax dollars. However, these again are employer sponsored plans. The unemployed cannot take advantage of this tax treatment. It also further entrenches the employer as the provider of health care and not the market.

Tax Credit for Assuming the Health Care Costs of Family Members

Second, those who do pay for the medical expenditures of a family member can deduct these costs from their taxes as well. However, what is needed is not just a deduction, but a temporary tax credit to encourage families to take care of one other. This credit would be enacted at the same time Medicare & Medicaid levels are frozen and vouchers provided to those who would otherwise qualify for these programs. This credit is needed as an encouragement to help restore the family as the basic unit of society and can be of great aid as the government reduces its own involvement in the insurance business and manipulation of the private industry.

Taxes do change behavior and they create, alter or destroy markets. Justice in health care requires Justice in tax treatment.

These are two other examples of changes that seem very logical to make when trying to save Americans from the burden of health care costs. These are not complicated changes. They simplify the tax code, end government manipulation over health care, free up creative forces, lift burdens, and promote the family. They are simply the right way to go.

__________________________


Footnotes:

1. http://www.irs.gov/taxstats/indtaxstats/article/0,,id=96981,00.html

As mentioned in an earlier post, employer sponsored health plans dominate the health care market. As already stated, this poses a problem on at least five levels:

1. It reduces the incentives private health insurers have to create a variety of products that could be used by those who do not have group coverage through their employer.
2. It creates a dependence of employees on the employer for health care.
3. It creates a one-size fits all approach for the employees of the company.
4. It creates an ethical problem where an employee’s health is a form of compensation.
5. It means if you lose your job, you lose your health insurance.

This has to change - and that is coming from a Benefits Manager at a Pharmaceutical Company.

One Size Fits All

Employer sponsored health plans usually provide extreme levels of coverage. They can be so rich that they provide many more benefits than 95% of employees need. These plans are of little use but of high cost to everyone enrolled. It could also be the exact opposite – providing little more than the basics and at high costs. The ability to find a plan based on an individual’s needs doesn’t exist in our current system because employer sponsored health plans are not designed with the individual, bur rather recruiting and the masses, in mind. An individual focused plan also won’t exist in a government system. It will only exist in a free market system.

This reality is one of the other major reasons for the rise in health care costs - plans designed with the masses in mind. The customer in our industry is the masses - not the individual. It is the employer and not the employee.

If we are to create a free market where companies compete for people as customers, then you have to create a market of customers. One of the easiest ways of doing that is by ending the employer monopoly over health care.

In the book, “The World is Flat,” Friedman argues for health care reform that ends the dependence of the employee on the employer. Some would argue that this eliminates a very important part of an employer’s ability to recruit and retain top talent. However, this change can be done in two ways:

1. National Health Care Plan
2. Employer Vouchers for Health Care

I have already proven through logic and reason that the first option is too costly, inefficient and unjust for us to adopt. If faced with the facts and a choice between free market reform and government reform, the answer for most becomes obvious. Furthermore, National Health Care would also truly eliminate an important part of an employer's ability to attract and retain top talent.

Vouchers

The second option preserves this ability, takes health care out of the hands of the employer, places health care decisions in the hands of those who need that freedom, and is an easy reform towards Freedom and Justice in Health Care.

Rather than an employer paying directly for an employee's health care in an employer sponsored health plan, an employer can provider a voucher the employee could use in choosing their own insurance, co-op or health share plan - tailored to their own medical needs - that they can take with them to whatever employer they choose to work for (footnote 1). The voucher becomes the competitive piece an employer can use in attracting and retaining their talent – not the plan.

Furthermore, the employer can still receive a tax deduction for a voucher they provide for a private health plan – but not for contributions to an employer sponsored plan – that tax treatment goes away.

The end of the employer sponsored health plan greatly opens up the market to innovate in its product offerings and prices and allows all citizens of every level, employed or unemployed, rich or poor, young or retired, to receive the benefits of the increased competition that will result in the end of the employer sponsored health plan and increase of millions of individual customers. It would figuratively open up the flood gates into an area all but dead by decades of drought. It would bring life to our health care system and all would benefit.

This change should make every heart leap for joy in the true opportunities and blessings that await our Nation after true reform that restores Freedom and Justice to the health care industry.

______________________

Footnotes

1. http://healthcare.cato.org/free-market-approach-health-care-reform

One of the largest issues in our health care market today is the complete dominance of employer based health care plans. This poses a problem on at least five levels:

1. It reduces the incentives private health insurers have to create a variety of products that could be used by those who do not have group coverage through their employer
2. It creates a dependence of employees on the employer for health care. In the 21st century we want employers to be able to retain top talent but not manipulate them through certain programs that should be transferable regardless of the employer.
3. It creates a one-size fits all approach for the employees of the company.
4. It creates an ethical problem where an employee’s health is a form of compensation.
5. It means if you lose your job, you lose your health insurance.

Some of these points are so obviously wrong that they merit no more discussion than proving that matter exists. Although more on this topic will be discussed at a later time, it is important to note that this dominance of employer based health care has been created, in part, by the tax treatment employers receive for offering health care. This has to end.

Employers receive a tax deduction for every dollar they spend on contributions made toward health care. It also reduces the amount of payroll taxes as employee contributions are all pre-tax. For employers looking for a break from the nearly 40% corporate tax rate, this deduction appears to be a win-win. However, it is only a win in the short term. The long term consequences are those we are now experiencing: a dearth of options for those who are employed without employer based health care, almost no private market for the low-income or retired, no options for the unemployed, and large business plans at large business prices forced into small business operations. The model is unsustainable.

A model encouraged by the Government now becomes criticized by them. Regardless of where the blame lies, reform must be enacted to establish Justice in our health care system by ending the dominance of employer sponsored health plans.

To do this, the first thing that is needed is to end the tax deduction for employer contributions to an employer sponsored health plan. If an employer wishes to contribute to a private health plan, this is another topic that will be discussed at a later time.

The second thing that needs to take place is end the special pre-tax contribution an employee makes to their employer sponsored health insurance. This special type of tax treatment is only for employer sponsored plans – it discriminates against all other kinds of health insurance type products. Let all health insurance type products be tax deductible – no matter where they come from (footnote 1). The type of tax treatment I already discussed should be favored rather than the current exemptions.

Certainly this change would have to be implemented over time and would have to include other reform in the US Corporate Income Tax code to allow private industry a chance to adjust to a truly free market system. Nevertheless, this should be a welcome change for all - corporations and individuals.

Government manipulation in the private market has in part created the problem we are now facing. Ending this preferential tax treatment on employer sponsored health plans will help place the government in its proper role, end an employee’s health as part of their compensation, reform health care in America, create an incentive for the industry to begin furnishing competitive health care products to individuals based on their needs and health care goals, and allow individuals to no longer be completely dependent to an employer for something so important. This must be an integral part in any change that is to lead to a better America.

_________________________________
Footnotes

1. http://healthcare.cato.org/free-market-approach-health-care-reform

As has been shown, government involvement in health care is the true crisis at hand. The Federal Government is forced to find an additional source of funding for its tremendous unfunded liabilities. The most likely source for this new funding is through expanding its insurance jurisdiction. Amazingly, the government's involvement in health care is one of the major sources in the rise in health care costs throughout the industry. Its involvement has also completely removed any market for private insurers to offer products for the uninsured low income and elderly.

What incentive does a Blue Cross or CIGNA have to offer a low cost insurance product for the low income or elderly? They have none and there is no market. The government fully dominates these areas.

If we wish for the private industry to provide health care for all Americans, then the government must eventually get out of the insurance business. It is a fallacy to blame the industry and at the same moment keep the industry out of those markets. If we want the marketplace to work, the government will slowly have to step back. It is that simple.

How then do you open up these areas to the private market? The answer lies in limiting over time the role of Medicare and Medicaid. This doesn't mean take away these programs from those who already have them. The reform that is needed is in their future expansion and availability. If you want to help those with a low income be able to obtain affordable health coverage, you have to open up these markets. Here is how you do it:

1. Freeze the number of enrolled Medicare & Medicaid members at their current levels. As members fall off the rolls, do not replace them with new enrollees.

   
   

2. For a fixed period of time, such as five years, provide vouchers for those new applicants who would otherwise qualify for Medicare of Medicaid to purchase a type of coverage created from the newly established free market (Footnote 1). The vouchers could only be used to purchase a qualified plan that adequately meets their needs. This provides a “stimulus” into an emerging market and ensures that those who would have qualified for these government programs would still receive the benefits of insurance.

   
   

These adjustments would still provide coverage for those who presently can't afford it and provides a safety net during the transition.

Reducing the government involvement in health care on the side of insuring individuals is paramount to creating a fair and competitive market. This marketplace includes all options and the freedom to choose the type and level of coverage they feel is best for them.

This influx in members into privately ran options will further increase competition and lower prices. With more customers wanting private insurance (and not employer based plans), an opportunity would arise for the marketplace to provide various kinds of insurance plans and other health care options such co-ops and health shares. Through this kind of market creativity, people are better served. This is the direction we as Nation should be racing to go in.

Furthermore, by limiting the expansion of Medicare & Medicaid, you greatly reduce the burgeoning federal deficit. Five years from now the government can actually begin to reduce spending and use those tax dollars in other needed areas such as education, infrastructure and the national defense.

By creating a market that takes care of the needs the government has been dominating for the past 40 years, we not only are able to better provide for those in need but we are also able to help restore the government to a sustainable level.

Responsible health care reform, such as this, will still take care of those on government health care but will also provide a way to create a marketplace for the low income and the elderly.

____________________________

Footnotes

1. http://healthcare.cato.org/free-market-approach-health-care-reform

As was just discussed, there need to be options for the American consumer to choose in health care.

In the reformed world of free market forces, those options so far include:

1. Health insurance purchased in a market that truly competes
2. Health security through a co-op or HealthShare
3. Remain uninsured by using the formula discussed in my past post

There is another product that exists that could become 3a: Health Savings Accounts.

Currently, health savings accounts are attached to a high deductible health insurance plan. This is further evidence of the entire monopoly that insurance companies enjoy over our health care market. There are tremendous benefits to HSAs and those benefits need to passed onto more than just the insured.

Michael Cannon of the CATO Institute, in his paper, "Large Health Savings Accounts: A Step toward Tax Neutrality for Health Care," proposed making some changes to HSA's which would encourage more competition and therefore drive prices down to a competitive level. His proposals are as follows:

1. Increase HSA contribution limits dramatically. For illustrative purposes, assume the maximum annual contribution limits would be roughly tripled, from $2,850 to $8,000 for individuals and from $5,500 to $16,000 for families.

2. Remove the requirement that HSA holders be covered by a qualified high-deductible health plan. HSAs would be open to those covered by any type of insurance, as well as the uninsured.

3. Allow HSA holders to purchase health insurance, of any type and from any source, tax-free with HSA funds.

Cannon writes, "Restructuring the exclusion for employer-sponsored health benefits in this way would enable more individuals to obtain health insurance that matches their preferences, would increase efficiency in the health care sector, and could reduce inequities created by the exclusion. These changes also offer a means of limiting the currently unlimited tax exclusion for employer-sponsored health benefits that may be more politically feasible than past proposals. " He concludes: "Large HSAs could serve as a step toward a tax system that offers no preferred treatment to health expenditures, and thereby forces the health care sector to accomplish more with the resources devoted to it (Footnote 1)."

This option, tied to the one previously discussed, would create a truly viable option for the uninsured. Such an expansion of the HSA could be an additional product that would bring more competition, and therefore greater options at lower prices, to the consumer.

____________________________

Footnotes

1. http://www.bepress.com/fhep/11/2/3/

As discussed in my previous post, the market has failed to deliver options that create competition, add value and drive down prices. Reform is badly needed to restore Justice to our health care system. One reform that must be looked at is decreasing the amount of risk the uninsured have to bear.

One of the major advantages the insured have over the uninsured is that, although their premiums are astronomically high, the cost is not nearly as high as the actual cost of major health care services. Because the actual cost is so high, people purchase insurance to keep themselves financially safe in case the need arises.

Insurance companies are able to pay out billions of dollars in bonuses and profits because they are able to leverage their huge population of insured individuals against hospitals and doctors and demand, or rather force, them to accept less for the services than they would have otherwise billed.

The government with its even larger population of insured is able to do this even “better” than insurance companies. This creates some unintended consequences within the whole system. For example, a typical profit margin is 30%. If Medicare reimburses you at 60% of billed charges, you have actually lost money. The provider has to make it up somewhere. Who do they pass it on to? The insurance companies and the uninsured. This pushes up premiums and costs at an alarming rate and financially devastates those without insurance. Because of the fear of the financial loss that comes from being uninsured, people will eventually do all they can to get insurance.

Increased competition will lower costs. In addition to the other recommendations I have made, one more reform that needs to take place is a measure that places a maximum amount the uninsured can be charged for medical services. This would increase competition and provide a level of security. For example, if the original price of a service is $1,000 and the insurance company reimburses the provider $500 for the service, the uninsured should not be stuck with the full bill of $1,000. That however is exactly what is happening in most cases.

There certainly should be some advantages for having insurance. However, one of them should not an exclusive window to discounted prices.

There is no easy way to solve this problem. If you lower prices on some customers it has to be raised on others. The problem is that the uninsured are always the ones who get the worst end of the equation. It is not Just that a system which presently forbids competition and forces prices up leaves those who cannot afford insurance left in the most vulnerable situation.

So, what is the solution?

The most logical solution is that the uninsured will not pay more than 1xx% of the average reimbursement amount (or the advantage the insured enjoy) the Insurance Provider pays for a given procedure, test, or visit. It seems right to me, that the percentage should be about 120%. The exact science of this formula would have to be determined. When using this formula in the situation above, the uninsured consumer would have paid $600 instead of the full $1,000. Through health reform legislation, the differential, or $400, could become a tax deduction for the provider or even a temporary tax credit.

Even without the extra protection from the tax code change, this could still be a viable option. However, without the tax benefit, this push prices up in other areas. Nevertheless, the insured still would enjoy the advantage they expect by being insured and the market would find the appropriate balance with these safeguards in place.

With or without the tax code change, being uninsured becomes its own product. It comes with a risk but it also comes with a safeguard – or type of insurance - and possible reward based on the health of the individual. More on this topic will be discussed in my next post.

This is not the perfect solution. However, it is one solution among many that must be considered. Bringing the insured vs. the uninsured costs to a similar level creates options for the American consumer. With this kind of safeguard, the consumer has options: remain self insured or purchase health insurance. Whereas presently, the consumer doesn't truly have a choice. They are forced into one situation or another. Furthermore, this kind of provision could be one for a temporary duration of time, for example of five years, while the health care market begins to grow and take hold on free market principles. As it does, other options will be created that will provide the insurance and protection needed. For the time being however, this is a necessary change to provide justice in an unjust and perhaps even predatory system.

Choice lowers costs through increased competition and options. If we believe in health care for all and in prices that all can afford, this is something that must be debated and considered.

As shown in my last post, monopolies in health care are at the core of the problem we all must deal with. To break up monopolies, there need to be other options in health care for people to choose besides health insurance. Options create competition and competition drives down prices.

Presently, if you do not have insurance you are left incredibly vulnerable. Health care expenses can be astronomical. Health care needs can be detrimental. When combined together, the sum often is unbearable suffering of both body, mind and pocket book. The lack of options puts all of us at a disadvantage.

Because of the lack of options and sadly for the American consumer, it is difficult for a person to get medical insurance at an affordable rate. Here is why:

1. Monopolies in health insurance have allowed prices to climb un-challenged by the market because no true free-market exists
2. Pre-existing condition clauses increase premiums for all and often eliminate badly needed care for those who need it most
3. Price are so high for medical insurance that people cannot afford it if their employer is not subsidizing it
4. There are so few insurance companies to be able to choose from that the lack of competition reduces the need these few companies have to compete for customers. This dearth of choices eliminates all competition for better service at lower prices

In this setup, the consumer has only three choices if they don't have a job or have one that doesn't offer health insurance: pay an incredible amount for an individual insurance policy, purchase a high deductible health plan, or risk going uninsured. Many people take the risk of going uninsured because they simply cannot financially afford their own policy.

This is a failure of the market. We already discussed one change that has to be made. Here are two others:

· Privately Ran Health Care Cooperatives or HealthShares
· The establishment of standards for rates billed to the uninsured vs. the insured

The latter will be discussed in a later post.

What are Health Care Cooperatives or HealthShares?

A health care cooperative is a group of individuals who join together to insure each other's health needs. The cooperative is owned by the members of it. It is similar to that of the Credit Union model. I am not referring to a managed care health care cooperative where the Co-op provides the medical services in addition to the coverage. I am only referring to a cooperative that acts as the insurer. This kind of cooperative would allow for competition in the health care reimbursement market.

One such HealthShare is Altrua (http://www.altruahealthshare.com/)

Here is an introduction to Altrua from their homepage:

“You're probably here because you're looking for affordable health insurance. Would it surprise you to learn the answer to affordable medical benefits may not be health insurance at all?!“Altrua HealthShare is not health insurance. Altrua HealthShare is a nationwide faith based membership of individuals who share in each other's medical needs by bearing the burdens of others.“Because we're not health insurance we can offer our members lower monthly costs than they were paying for health insurance AND provide MORE options and service than they were receiving.“Health sharing began over 30 years ago as a non-profit medical need sharing concept of members caring for one another. And it's becoming more popular every day as a trusted alternative to health insurance.”

You can probably get a feel for the advantages of such a product. Our health care market needs more of these types of options for the American consumer to choose from.

However, through tax code treatment, co-ops are discouraged over health insurance. This discouragement further entrenches the insurance & government monopoly over health care. This entrenchment is what has brought us to the current crossroads.

If we wish to increase competition in health care, we would be wise to learn from some of the things said by the The Heritage foundation:

“If Congress wants to provide Americans access to health co-ops, it would need to make it possible for an institution to combine tax-exempt (non-profit) status with mutual insurance status, something health plans cannot do today. Congress should allow mutual health insurance companies to form based on the credit union model. Under this model, Congress would simply grant non-profit status to mutual insurance companies, justified by the "member benefit" they provide.

“Very likely, with this form of health care arrangement possible, various non-profit memberships and other organizations might link with a health co-op to make coverage available. State farm bureaus or consortia of churches, for instance, could establish such co-op health insurance.

“In addition to these steps, addressing the tax treatment of health plan benefits in the individual tax code would help spur co-ops. If families could receive the same tax relief for joining a co-op--or any other free-standing health plan--as for enrolling in an employer-sponsored plan, there would be new options for the uninsured or underinsured (Footnote 1).”

Further options equals additional competition. Additional competition, as long as the Antitrust exemption has been removed, means additional benefits to the consumer through increased services at lower costs. This will lower health care costs and increase options for the uninsured.

In short, it will help to bring about Freedom and Justice in health care.

______________________________

Footnotes

1. http://www.heritage.org/research/healthcare/wm2493.cfm

What is the end or purpose of Government? According to the first draftsman of our Constitution, “Justice is the end of government. It is the end of civil society. It ever has been and ever will be pursued until it be obtained, or until liberty be lost in the pursuit (Footnote 1).”

We need government and we need it to administer justice for all. Therefore, government has a place in health care. As has been plainly illustrated to a point beyond reasonable argument, that place is not in the further entrenchment of the government in taking over private industries but is rather in regulating them and seeing that the principles of Justice and Liberty are protected and strengthened – not lessoned or altogether destroyed.

An over zealous government, however, is not the only way to lose Justice and Liberty. Unfair and unbridled capitalism can be just as dangerous to justice and the liberty of the People. To protect the citizens of a Free country against the usurpation of power and undue influence by others, including corporations, government serves as the arbitrator and administrator of supposedly blind justice. These just laws bring all mankind to the level and force us to operate as equals – each having their fair chance to succeed or fail based on their own efforts, or lack thereof, and not by the unfair forces of others.

One such just law is the the Antitrust law.

In 1993, the Supreme Court ruled that the purpose of this laws is:

"not to protect businesses from the working of the market; it is to protect the public from the failure of the market. The law directs itself not against conduct which is competitive, even severely so, but against conduct which unfairly tends to destroy competition itself (Footnote 2)."

If, from this statement, Antitrust laws are instituted to protect the public from the failure of the market, can we not infer that one of the major causes of market failures is a lack of competition itself – hence the need to create and enforce such laws? Indeed we can.

And, who will not agree with the fact that the health care market has failed the consumer by not providing them with quality services at affordable prices? So, if the health care market has indeed failed us, can we not conclude that part of its failure is based on the injustice of trusts or monopolies which altogether eliminate competition and free market forces? Again, indeed we can.

The failure that has lead us to this issue has arisen from a suppression of the Free Market – not the result of a free market - and an unjust protection by government on the insurance industry.

I will explain.

As much as some would like us to believe that reforming health care is a complicated issue, the truth of the matter is that making some very basic and essential adjustments would do more for American health care than most of the changes being debated. The most basic and immediate of changes that is needed is reforming the insurance industry to increase competition. One major obstacle toward creating a competitive market in health insurance is that the insurance industry, by law, doesn't have to compete.

The Insurance Industry is one of only two that are exempt from Federal Antitrust laws. The other industry is that of Major League Baseball (how did that happen?). Again, by law, insurance companies do not actually have to compete on a fair and level ground with each other. On the contrary, they are free to fix prices, collaborate on product offerings and gather information together. How is that a free market? It isn't. Also, in such an environment how can prices be driven lower through market forces if free market forces don't even exist? The answer is they won't ever go down. On the contrary, because of the ambition and self interest of man, they will only go up.

If we want the market to succeed as it does in every other well established industry, wouldn't we want “to protect the public from the failure of the market” and institute a law against health insurance monopolies “which unfairly tends to destroy competition itself”?

We would – absolutely.

Accordingly, that is why the first, and most basic reform in creating a free market health care system that works for America, is that of repealing the Antitrust exemption health insurance companies enjoy. It is necessary. It is absolute. It is non-negotiable if we are to truly create an environment where Justice is administered and society is blessed. Only by creating an environment where companies compete for business will better service at lower costs be offered. This is the first step to that.

Both an over zealous government and unfair and unbridled capitalism are detrimental to justice and the liberty of the People. To restore Justice and Freedom to the health care industry, this is a recommendation that must be enacted.

______________________________


1.Federalist #51, James Madison
2.Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447, 458 (Supreme Court 1993)