David Karaffa | Real health-care reform

The current proposals that are presently getting attention in Washington for health-care reform are really proposals for a government health-care take over and an expansion of an already growing problem. Real health-care reform should be much different.

First, it is important to understand that physicians are not permitted to negotiate their rates with patients that don’t have health insurance. The contracts that physicians have to sign with private insurance companies forbid it, and federal law says that it is fraud for physicians to do so for Medicare copays. Some readers may not understand what I am saying, so I will expand. In order for physicians to bill private insurance companies for their services to patients, there must be a contract between the physician and that insurance company.

Now, one little known secret is in that contract between the insurance company and the physician. There is a discount off the physician’s rate for those patients who have health plans with that insurance company. It helps to think of the explanation of benefits that you get from your insurance company after you see the doctor. On that explanation of benefits you see the physician’s rate, then the contracted discount, then you see how much the insurance company paid toward the bill, and whatever is left is up to the patient to pay.

This causes the physician to artificially inflate his rates so that he gets a sustainable amount of reimbursement from the insurance company after the contracted discount is applied. What people rarely know is that the physician is not permitted to give that same contracted discount to a person that doesn’t have health insurance, they have to be billed the full inflated price! Basically, private insurance companies have forced costs for the uninsured to be inflated.

Those of you that think that a government-run public plan would fix this are mistaken because the federal government already does exactly what the private insurance companies are doing. The only difference is that if a physician contracts with Medicare and they privately negotiate rates with a patient on Medicare, the physician would be sued and jailed for fraud.

This may be a little much to understand, so I will give an example. An elderly woman comes into see her doctor and she is on Medicare. Now, we all have co-pays, and for elderly people on Social Security the co-pay can be a lot of money. A physician cannot, by law, say to that elderly woman that he will discount the copay. If he does, he could go to jail for fraud! Now think of a government-run public plan with a co-pay that you can’t afford and a doctor that, by law and threat of jail, can’t discount.

So, when you read or hear about health-care reform and you hear about a public option, keep this little-known fact in mind. Physicians are forced to inflate their rates to stay in business, there by pushing people to purchase expensive insurance plans because they can’t afford the physician’s rates on their own.

Physicians need to be able to negotiate their own rates with the uninsured without threat from the federal government or private insurance companies. Bottom line, end the contracted agreement that physicians cannot negotiate rates with individuals without health insurance. This one change could open up health-care access to millions of those who cannot afford it now.

Real health-care reform also needs to include a change from employer-based coverage to individually-based coverage. Currently, the vast majority of Americans obtain health-insurance coverage through their employer. This is a huge obstacle for purchasing health insurance across state lines. However, if businesses offered vouchers for individuals to purchase insurance, the individual would be left to purchase insurance from anywhere at any cost. For example, I am a nurse. If the hospital would give me an insurance voucher equal to what the hospital currently pays for my health insurance, I could go and find my own individual plan, possibly from another state at a lower monthly premium. This increase in competition would help to drive down monthly premiums.

This aspect of health-care reform would also be an incentive for people to take better care of themselves. This is because those who are not currently implementing healthy practices in their lives would directly pay for it, rather than the employer or the other employees in the business’s group-health plan. Another benefit for business with this sort of reform would be a decrease in the capital and overhead necessary to organize and administer a health plan, in turn saving the business money.

The government public option doesn’t allow for this set up in any way. It actually further ties health care and premiums to business in a negative way. The government will actually charge the business premiums based on the payroll amount of the company. If the business decides not to offer the government public option, then they will pay a fine based on the payroll amount of the company. As you may have guessed, the cost for the business to be enrolled and offer the government public option is less than paying the fine for not offering it, naturally leading to the vast majority of Americans being covered on a predetermined government-run option with no alternatives if it doesn’t suit your individual needs.

The real savings is in a health savings account coupled with catastrophic health-insurance coverage. In the beginning, health insurance was only intended for catastrophic coverage. Doctor’s visits were paid for out of the patient’s pocket. Over time, insurance companies began to compete with low cost health plans that would cover routine doctor visits. Since then, combined with federal regulation, health care has evolved into an expensive and complex system. Now, with premiums skyrocketing, and the actual coverage of services dropping, real reform is needed. Patient’s paying for routine doctor visits and other services out of pocket is not as practical as it was. Enter the health savings account. These accounts could be a great asset to reform. If Americans were given incentives toward health savings accounts, we would see health-care costs plummet. For example, if a person who is employed full time received a voucher for health insurance from their employer and placed that money into a health savings account, then that money could gather toward paying for health services. This also encourages individuals to only use health services if needed, also causing a decrease in health-care costs.

The government could create incentive for this program in many ways. One is already in practice. Health savings account deposits are tax-free. This incentive could be taken a step further by allowing businesses to take a tax credit based on vouchers that are deposited into health savings accounts. Also, those people who have the health savings accounts could receive tax credit for the amount of money that is placed into the health savings account. These incentives would greatly motivate people toward saving and healthy practices.

The secret to health-care reform is based on making the system less complex and more accessible. You will notice that these health-care reforms wouldn’t cost the taxpayer an additional dime and doesn’t add to the size of government; it would rather save the taxpayers money. Also, these reforms could greatly increase the ability of those without health-care insurance to gain access to affordable care. It would cut the cost of practice for doctors, cut the cost of coverage for employers, and cut the cost of care to the individual. All of which are great for the struggling economy that we are trying to keep healthy enough to work through these tough economic times.

Unfortunately, we are not hearing any of these reforms in anyway from our representatives in Congress or the president. The reason is simple; the current legislation is about tax revenue and has no real interest in covering all Americans health care. Rather, their goal is to centralize and control health care through a government public option and collect the fines.

I encourage everyone to think hard on this proposal and its principles. If you agree with what is laid out here, please send it to your representatives in Washington and show them what real reform should look like.

Isn’t it fascinating how much progress could be made toward real health reform by implementing commonsense practices that allow the individual and free-market principles to have effect?

 

David Karaffa blogs at www.AugustaConservative.Blogspot.com.

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