To the Editor: A comparison of auto liability insurance and healthcare insurance is not apt

Sunday, February 28, 2010

Carol Solle's comparison of auto liability insurance and healthcare insurance is not apt. A fairer comparison would be emergency services (911) to healthcare, because in the aftermath of an accident the prime concern is taking care of injured people, whether or not those people can pay. I don't know of a single location where 911 services are provided privately. This is because it makes no sense. However, once the insurance system kicks in, when the injured party has reached the hospital and critical needs are taken care of, everyone has horror stories to relate about medical care which was second-guessed, delayed or rejected by insurance companies - and this isn't even health insurance, but the auto liability companies.

Solle advocates for allowing interstate purchases of insurance. I would have no problem with this, so long as there is very strict federal-level regulation of benefits and premiums, and a requirement that everyone be included in the same insurance risk pool. However continuing state-based regulation would be overmatched by the power of the insurance companies, and states would compete to attract the insurance companies by minimizing requirements, as has happened with the credit card industry. This would lead to even less accountability than we have now.

Solle may have a point when she claims that defensive medicine drives overtreatment and additional expenses, due to fear of liability lawsuits. The problem is the claim is unsupported by evidence - in states which have implemented so-called tort reform, costs have not fallen and, as far as I know, treatment patterns have not changed substantially. At any rate, this is small potatoes compared to the major issue, which is this:

Why can't the United States, the most powerful and wealthiest nation in the history of the world, provide adequate health care to everyone who lives here?
Other wealthy countries around the world are able to do this. Systems vary. Some are government-run, and some, such as Japan's, are run by very strictly regulated private insurance companies. But they are able to do what we cannot, which is to take care of all their citizens (and visitors - my mom received health care recently on a trip to London, when she fell on a bus) whether or not they are rich, poor, working or unemployed.

Peter Henry


Carol Solle,  March 13, 2010 at 2:53 PM  

The point of my letter was to suggest reasons for the high cost of healthcare. Costs should be brought under control, and I suggested ways to make that happen.

Since 1960, people have been paying less and less out-of-pocket healthcare expenses (proportionate to what private insurance pays), and as a result, the cost of healthcare as a percentage of GDP has gone up proportionately. If ‘food insurance’ was available, and people could buy as much of whatever they wanted to eat, the cost of ‘food insurance’ premiums would sky rocket as well.

As we spend less out of pocket, we care less about prices and costs inevitably rise.

The Wall Street Journal describes the “Patients’ Choice plan”:
Redirect the $300 billion annual tax subsidy for employment-based health insurance to individuals in the form of refundable, advanceable tax credits. Families would get $5,700 a year and individuals $2,300 to buy insurance and invest in Health Savings Accounts.
Low-income Americans could get a supplemental debit card of up to $5,000 to help them purchase insurance and pay out-of-pocket costs. They would have an incentive to spend wisely since up to one-fourth of any unspent money in the accounts could be rolled over to the next year. The combination of the refundable tax credit and debit card gives lower-income Americans a way out of the Medicaid ghetto so they can have the dignity of private insurance.
The great majority of Americans with job-based health insurance would see little more than a bookkeeping change with the Patients' Choice plan. But implicit in the policy is the acknowledgment that our system of tying health insurance to the workplace is not working for upwards of 45 million uninsured Americans
To Peter and Chris, spending for existing entitlement programs (Social Security, Medicare, Medicaid) is not sustainable. How do you propose that we pay for universal healthcare? If the fed continues printing money, inflation will result. More borrowing isn’t the answer as servicing our debt will become a huge percentage of GDP.

You ask “Why can't the United States, the most powerful and wealthiest nation in the history of the world, provide adequate health care to everyone who lives here?” It’s not that we have no money as a nation; we have less than no money as a nation as our balance sheet deteriorates with out-of-control spending and increasing debt.

Carol Solle

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