Home > Universal Healthcare Vouchers Plan Could Provide Coverage and Choice

Universal Healthcare Vouchers Plan Could Provide Coverage and Choice

by Open-Publishing - Tuesday 21 June 2005
16 comments

Edito Healthcare USA

http://www.niagarafallsreporter.com...

by John Hanchette

Olean, NY - Even casual readers of newspapers and watchers of TV know the nation’s health care system, if you can call it that, is broken. Americans who get sick know they’ll pay plenty for it, even if they’re lucky enough to have insurance.

Yet, while President George W. Bush and his sycophants dither about trying to "reform" a Social Security system that isn’t half as dilapidated as health care into a windfall gift for Wall Street fat cats, the numbers predict a national disaster if health insurance isn’t looked after soon.

The ranks of the uninsured swell by 100,000 each month. Huge companies that once viewed health insurance for workers as a no-problem benefit are going broke partly because of the premiums; General Motors — which just announced a layoff of 25,000 full-time workers — is an example. Some firms encourage lower-wage workers to sign up for Medicaid, which is drowning in so much red ink that governors in many states, such as New York, offload much of the cost on already-poor counties and already-burdened taxpayers.

In just three years, if current trends hold true, government-sponsored programs such as Medicare and Medicaid will spend more insuring retired Americans than on the already-immense defense budget. Now, that’s going some.

Until about seven or eight years ago, in return for loyal service, retirees from big American firms could look forward to having their health care coverage and that of their spouse paid for by their company until death. Then the accountants and Ivy League business graduates started showing the boss how many millions could be saved by simply eliminating that perk. The spouses were the first to go, then the worker. Now, it is an expected elimination.

Workers who planned a retirement of early leisure have to take new jobs just to pay for health care. I know about this. It happened to me. I expected the coverage and planned on it through a 40-year career, then "poof," it disappeared. When I mentioned it as a possible inclusion in the severance package during negotiations with the human "services" director, she looked at me like I was nuts.

The Republican CEOs who run many of the largest corporations spend much of their time now bitching at their Gucci-shod lobbyists about the crippling costs of premiums. Just slicing the workforce quarter after quarter, however, is obviously not a long-term solution, and eventually will ruin the currently beleaguered economy. And if you think health care provision is a problem only for big firms, think again. Studies show that premiums to cover workers at smaller firms run more than 20 percent higher than for the giant corporations — a big impediment to development and growth of the small business segment that is the backbone of the American economy.

The Democrats in Congress are leery about taking on the problem directly because of their experience a decade ago with Hillary Clinton’s disastrous attempt for her president-husband to shape the U.S. health care system into a streamlined reflection of other government-administered single-payer systems like Canada’s or France’s. Instead — mainly because she attempted to fashion the whole thing behind closed doors without public or press scrutiny — the effort ended up an indecipherable mishmash of hybrid ideas with a flow chart that resembled something out of "Mad" magazine.

The failed effort had political consequences. The next election saw Republicans increase their numbers in Congress just by focusing on the Clinton health care failure.

Copying the Canadian system — which drew loud cries of support just a few years ago — is considered folly now, because even while drugs are cheaper there and it is generally fairer to recipients, our neighbors are having problems sustaining it, and treatment delays are considered incredible by many in the program.

It is more likely in Washington — with conservative, business-minded Republicans running the show with an iron hand in a mailed glove — that the GOP will be the first to come to grips with the problem, simply because the corporate sponsors of so many Republican members of Congress are wailing so loudly about it. The Republicans, without much luck, have already tried to promote so-called Health Savings Accounts, which — while carrying an embedded tax break — still would load the greater share of health care premiums onto individuals and wouldn’t extend coverage all that much.

So, who will fashion a plan that would cover every American, cut current waste, give us more choice of insurance carriers, provide us expectation of reasonable outlays for maintaining our health, reduce government bureaucracy, tamp down the increase in future medical costs, strengthen the economy, and yet be politically viable by offering advantages to Big Business and the other powerful interest groups involved?

Well, somebody already has. Actually, two somebodies.

In the June issue of the excellent magazine "Washington Monthly," two health experts — Dr. Ezekiel Emanuel, an author and cancer physician, and Victor R. Fuchs, a Stanford University professor emeritus of economics — describe their proposed Universal Healthcare Vouchers, or UHVs. As they maintain in their article, their idea might just "achieve goals long sought by both sides of the political divide: the progressive dream of universal coverage and the conservative values of free choice and efficiency."

The plan?

Every American household would receive a government voucher "entitling its members to enroll in a private health plan of their choice." The current private health insurance carriers and any new ones would by law have to guarantee coverage for doctor visits, hospitalization, pharmaceutical medicines, emergencies and catastrophic coverage.

Those with pre-existing conditions and higher expected costs would be covered by adjusting reimbursement values of the vouchers to the differing risk levels the insurance companies absorb. Thus, for covering older and sicker patients, the insurance company would receive a higher payment — eliminating the current incentive to exclude high-risk patients.

Medicare would be replaced, or more accurately, phased out. Senior citizens currently enrolled in Medicare would see no change, but there would be no new enrollees. Americans who turn 65 will simply keep their voucher-paid coverage. Medicare, its hideous payroll tax that financed it, and, as the authors call it, its "calamitous fiscal future," would over time be completely replaced by the voucher system.

Because every American would be covered regardless of income, Medicaid and its terrible burden upon states and localities would also be eliminated.

Private doctors would, like today, choose to accept or reject different insurance plans. But they would avoid the massive paperwork and fighting with bureaucracies that causes many to retire early.

Doctors and hospitals would no longer have to absorb, and pass on to insured folks, the cost of "charity care" for uninsured patients who lack payment means.

"Frills" coverage, such as for Viagra and cosmetic surgery — the source of unending debate in localities and legislatures — would not be provided under the UHV plan; you’d have to pay for these non-essentials on your own.

The workplace would be reformed. You could switch jobs, be your own boss, go to part-time work or any combination of the above without fear of losing your health coverage.

Employers would be free to hire workers without figuring in the health insurance costs, thus improving the economy.

A new Federal Health Board would administer the system. It would be modeled after the Federal Reserve Board, with regional sub-boards.

The voucher system would be paid for by a Value Added Tax, which would probably increase the cost of your new car by eight percent, but would spread the tax burden broadly and encourage savings. VATs are much harder for the affluent to evade than income taxes. Most Americans would be paying about the same for health care coverage.

But all Americans would have it, and your paycheck would be bigger. The authors say the cost of extending coverage to all 250 million Americans under 65 would be about $713 billion. The current cost to employers and the government on health insurance is about $800 billion, and the system leaves 45 million Americans without any coverage at all. As the fella says, a billion here and a billion there, and it adds up to real money.

That doesn’t even take into account the tens of billions of dollars spent each year by Medicaid just to figure out who is eligible and who isn’t.

The beauty of this system is this: Very little change would be noticed by people in the current private delivery system or by users of health care insurance, and it’s politically viable. When the Pew Research Center in 2003 asked Americans if they would support universal health care even if it meant rescinding Dubya’s tax cuts, 72 percent said yes, including a majority of Republican respondents.

Once the Big Business lobbyists start to study this thing, my prediction is the Republicans will get serious about backing it. No more health care costs? CEOs would snap at it like bass to a fat minnow.

We’ll see, of course. The current non-system has so many special interests involved that anything could happen. But almost anything is better than the status quo.

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Forum posts

  • Sounds like it may be an improvement, but we could do better two ways.

    Don’t use a value added tax. That is regressive. Repeal the tax cuts for the wealthy instead. They benefitted from the U. S. system to obtain their wealth, they should contribute to the health of the nation.

    Save more costs by getting rid of the insurers and vouchers and simply provide universal care.

  • Get rid of the management layer sitting on top of health care in this country! When the CEO of United Health Care (HQed in Minnesota) can get reimbursed well over $90 million a year, something is wrong. We need what Denis Kucinich proposed -single-payer national health care.

    What is proposed here has most of the same problems the Clinton plan had. Keep the HMOs and all that nonsense. A voucher system? A Value Added Tax to pay for it? What disgusting proposals. Both are just a way to keep sticking it to the little guy and pumping money into the big guy’s pocket. The writer sounds like a true Democrat who thinks they are different than a Republican.

    • What stupidity. If you want to make an already bad situation completely intolerable, let the government [the same people who gave us 750.00 hammers and 1100.00 toilet seats] manage it. The nation would be better served if we disposed of the government rather than the management of the insurance companies, for the waste of money and effort generated by the assorted statehouses and in the federal branch [republican and democrat] far outstrips anything found in the private sector.

    • Hear hear.

  • The more that market forces are removed from any industry, including the healthcare industry, the less efficient and more bizarre it will get.

    If you think healthcare is expensive now, just wait and see how much it costs when it’s free.

    • Our for-profit health care system is what is making it expensive, not the government. In our present system, health care managers are responsible to their shareholders, not the patients.

      A government run system would not be as expensive and inefficient as you say. For example, look at the efficiency of the Social Security System. It is doing far better than the business pensions which are defaulting.

    • The more government is involved in any industry, the less efficient it is. Sometimes this is worth the costs, as in emissions standards on vehicles, but it isn’t working well for healthcare. Ask yourself this: if healtcare has gotten more and more expensive over the past 50 years, and the government has gotten more and more involved in healtchare over the same period, why should more government involvement bring down costs?

      Example: Big insurance companies negotiate with doctors to establish costs per service, say, $125 for a physical. However, everyone understands that when the doctor sends a bill to the ins. co. for $125, he will only be paid $35. But my state law requires that if an uninsured patient comes in, the doctor has to charge the full $125; if he agrees to charge only $35, which is all he’d get from the ins. co. anyway, he can be prosecuted for insurance fraud on the theory that he must be jacking up his fees for the insurance companies. This is, of course, insane. It’s just plain bad law, no doubt the result of insurance companies lobbying the legislator. However, it’s an excellent example of laws that remove market forces (in this case, freedom to contract)increasing costs.

      Social Security is not comparable to pensions. Pensions are defaulting, and that’s certainly bad, but at least pensions have SOME principal assets. Social Security has none. Social Sec hasn’t ever had anything in the "lock box," as VP Gore might say, unless you count a stack of IOU’s as an asset.

      Social Security is a pyramid scheme, meaning that recipients are paid directly from funds being paid in by people joining the scheme, they aren’t being paid from interest earned on principal.

      IMPORTANT: If someone in the private sector tried to set up a private version of Social Security, he or she would be prosecuted and sent to PRISON. (Think about that for a few minutes.) But of course, the law doesn’t apply to the government. That’s why gambling is Bad, but government-run "education lotteries" with sucker odds that prey on those who can least afford to part with their money are Good. It’s good to be king.

    • An industry without government imiposed emission standards is not more efficient, it is poisoning our population and our planet. These emission standards do not increase production costs, they stop the polluter from shifting the cleanup costs onto the taxpayer.

      "Big insurance companies ... lobbied the legislator." If you get rid of big insurance companies, then health care costs would drop substantially. If we can stop wealthy corporations (big insurance companies) from buying our government, then they would no longer get this corporate welfare. The trick is to reestablish a government that represents "we the people", not rich corporations.

      Social Security would be fine if corporate owned politicians hadn’t raided its assets (along with most of our other tax dollars). Pensions are defaulting, not social security.

    • With big corporations, at least you have recourse by going to the government. Once you put all of the power in the hands of the government, to whom do you turn to seek redress for your grievances? When the referees field a team, who calls the game?

      Social Security wasn’t looted just to fund corporate welfare, it was looted to pay for everything the government always throws other people’s money at, including hometown pork projects to keep politicians in office. This was entirely predictable.

    • If government is "for the people" and "by the people", then we WANT all of the power in the hands of government. Our govenment has checks and balances to protect us. "We the people" are the government. We are the referees. When government has been bought by big corporations, then we get victimized by corporations who care more about their profits than they do the commonwealth. The commonwealth is our lands, water, air, health, schools, roads, etc. It is pathological of them to sacrifice our commonwealth for their profits.

      Hometown pork projects are not neccessarily bad. Sometimes its is nice to have a new bridge, good roads, a new school, etc. Hometown prok projects have not gutted social security, corporate welfare has. For example, the war profiteers have been raiding the treasury for over two years as they continue their illegal war.

    • The most intelligent comments in the entire thread!

  • The problem as i see it is this. Social security and Health care are the same to the government.

    Whilst they hold power it is nothing more to them than a piggy bank to be dipped into here and there to prop up the country during hard times and to bulge even further the pockets of those who really don’t need it.

    The people that really need it get a bare minimum and the money that is being paid in now is all there is.(The rest has already gone) It is the same here in England. In England we do not have to pay for health insurance (because they came up with national insurance an additional tax that was only supposed to last the duration of the second world war but they forgot to get rid of it afterwards naturally) Dont be fooled however the poor get to wait for months and the rich go private or preferable treatment. The scheme of social security can only work while there is enough people paying in. If there is any delay then it would be a disaster. As it stands it is a huge black hole.

    This situation would only be improved by getting an independant non profit run scheme to manage the accounts. Then social security/ healthcare could and should work as it was intended.

    Though this would never be allowed by the mainstream of government and the media would support them by fighting against it too. They all serve the same master.

    We live in a country where the many support the few and this is going to worsen as time goes by.

    Danny from england

    • I agree with your analysis of the problem, Danny, though maybe not the solution.

      I’ll take your words for it re the UK, but here in the ’States, we live in a system where the few support the many. Something like the top 5% of wage earners pay the majority of taxes that flow into the federal coffers. This fascinates me—the rich are constantly maligned, and yet they foot the bill. Many argue that the rich are stingy and selfish, but it’s not the rich who use the ballot box to help themselves to everyone else’s stuff.

    • The few rich are maligned because they made their wealth off the backs of the many, and today they suckle corporate welfare from the government which they have purchased as their own.

      Everything Bush has gotten done while in office has been payback to one of his corporate sponsors. The Healthy Forest Initiative opened large land tracts of the commonwealth for the loggers, the Clean Sky Act reduced air polution regulations, the bankruptcy bill was payback to the predatory credit card lenders, the prescription drug bill was payback to the pharmaceutical companies, the tort reform made it harder for people to sue manufacturers of potentially faulty and dangerous products (you think they sell us crap now, just wait).

      The rich get richer because they have puppets in government like Bush. All of these things take money away from the everyman, and give it to the wealthy. That is why they are maligned.

    • Some of the rich got rich because they inherited their wealth. Good for them, that doesn’t hurt anyone else. (I’m even willing to make allowance for Sen. Kennedy, if he’d just leave me alone.)

      Others got rich because they worked hard and made wise decisions. Along the way, they created jobs where there were none and usually made the world a better place. (Bill Gates is hated by many, but millions of small businesses have sprung up due to the efficiency of his inventions.) They also tend to pay more in taxes and give more to charities than me or anyone reading this web site ever will. The dark truth is that they are usually maligned due to raw envy.

      I don’t dispute your point about Bush, but that kind of thing has always gone on, but sometimes it’s hard to tell who is pushing who around. Look at President Clinton. He goes out and plays golf with Bill Gates. What do you think they talked about? Do you think that maybe President Clinton asked Gates for a few bucks? All we know is that Gates didn’t give him any, and a month later, is being investigated by the feds for antitrust violations. Coincidence?

    • >Others got rich because they worked hard and made wise decisions.

      An optimal strategy for thriving in a corrupt and immoral economic system, doesn’t make the system honest and moral. Capitalism is survival of the fittest. Capitalism is a disaster for our societies, and that is why so many people cannot get basic human needs such as health care in such a system.