According to the U.S. Census Bureau, approximately 15 percent of U.S. residents lack health insurance. Therefore, any substantive debate on health care reform must address health insurance reform.
At the center of this debate is one fundamental question ---- how do we create affordable health plans?
Our congressional leaders have already demonstrated that despite decades of involvement, they are incapable of controlling health care costs. To our seniors who enjoy Medicare, according to the Congressional Budget Office, this system will be insolvent within the next 10 years. Furthermore, its current reimbursement schedule is so poor that many medical facilities cap the number of Medicare patients they will treat.
Worse yet, with 27 percent of California physicians over age 60, the younger, more indebted physicians are being forced to decline Medicare patients in even greater numbers. Medicare is only one of many government failures. Other examples include the Ponzi scheme called Social Security, and the "let's lose billions" Post Office.
In the realm of health insurance, there is hope if we can keep the federal government out of the doctor's office. Today there are approximately 1,300 health insurance carriers across the United States. This number is certainly adequate to ensure competition.
Unfortunately, some of the nearly 2,000 different state regulations make it unlawful to purchase health insurance across state lines.
These same regulations also add considerable costs by mandating irrelevant coverage for some consumers. The end result is that a handful of companies dominate any given market, severely limiting options to the customer. Nowhere is this better demonstrated than in Maine, where Wellpoint Insurance accounts for 71 percent of the total market.
Hence, the first step in health insurance reform is to abolish the state mandates that make it unlawful to buy insurance across state lines and limit the regulations that increase insurance costs. This will create competition among insurance companies that results in savings for everybody.
The second step in health insurance reform is decoupling the link between employment and health insurance. Employer-based health insurance actually limits choice, as the employees have limited input in company-offered health plans. In its place, the incentives previously reserved for the employer-provider should be passed directly to the people in the form of tax credits for the exclusive use of purchasing health insurance. Ideally, the consumer would choose to buy a health plan that would at least cover catastrophic illness.
The third step in health insurance reform is creating health insurance co-operatives. A co-op is nothing more than a group of people who pool their resources to create or obtain a product or service. Therefore, co-op members are owners, and have ownership input on running the co-op.
Co-ops already exist for life insurance and are found in familiar names like Mutual of Omaha. Co-ops are not currently used for health insurance, but could be if Congress allowed an institution to have both tax-exempt (non-profit) and mutual insurance status. In this case, the co-op created would offer health insurance and the tax-exempt status would be based on the benefit provided to the members. To ensure the start-up viability of co-ops, people should be permitted to use their tax credits to join these groups.
Health insurance co-ops will draw the criticism of the mega-conglomerate insurance companies, who will fight to protect their corporate profits. Co-ops are equally likely to be eyed by senators such as Charles Schumer, who want a co-op that is national in scope, run by federal officials and funded by the federal government. This plan has another name, the dreaded "public option."
Government infiltration of co-ops ultimately distorts the true viability of the co-op in much the same fashion that government distorted the housing market by interfering with Freddie Mac and Fannie Mae.
The final step in health insurance reform is the formation of a nationwide insurance exchange. This exchange would be the main source where consumers compare their options and buy a plan that fits them best. The exchange should require the user to input only the most basic information, ensuring that consumers are not declined based on pre-existing conditions.
In closing, the government has proved that it is the least efficient provider of anything and actually distorts the entities it corrupts until collapse is eminent. Government can certainly participate in health insurance reform by reducing and simplifying regulations, but no new bureaucracy is warranted.
Ultimately, we have the tools we need to fix our system, but we must hold our representatives accountable for what we expect them to accomplish.
Dr. GARY GONSALVES is a North County anesthesiologist and co-founder of Stop Taxing Us. Contact him at www.StopTaxingUs.com.
