Tuesday, April 29, 2008

The Minnesota 17% uninsured crisis

You are reading this because the headline got your attention. You think you know that Minnesota does not have a 17% uninsured rate. In fact, you know that Minnesotans without health insurance, according to a 2007 Minnesota Department of Health, amounts to about 7.2 percent of the population.

So what’s with this 17% thing?

Minnesota law mandates that everyone who drives a car must have auto insurance. We have an auto insurance crisis in Minnesota, with somewhere near 17% driving without insurance. This far exceeds the state’s health uninsurance rate.

Car insurance is mandated by law. Health insurance is voluntary (for now). And yet, the health uninsurance rate is far below the auto uninsurance rate.

While pointing these facts out during a presentation several weeks ago, I think I found the real answer. Please, no one tell the politicians what I am about to suggest.

Employer-based insurance

A disclaimer is required. What I am about to say is written with my tongue planted firmly in my cheek, but I am saying it for a profound purpose:

What if governments allowed employers to provide auto insurance for their employees, and then gave employers the right to deduct that insurance expense? If auto insurance was a regular employer benefit, would the rate of uninsurance still be at 17%? Or would it be more like, say, 7.2%?

While I am not suggesting that auto insurance be made an employee benefit, I am saying this, and I hope, saying it clearly: One of the key reasons that our uninsurance rate in Minnesota is only at 7.2% is because employers provide health insurance.

Let me say it another way: If employers did not provide health insurance, our health insurance uninsured rate would probably be at 17%, or more, even if the state mandated it.

Let’s be clear about this idea that individual health insurance is the best way to go: It may be, but it carries with it the very real potential of driving up the uninsurance rate. With or without a legislative mandate requiring the purchase of health insurance, there is no doubt whatsoever that uninsurance rates would climb.

I share this because of my political crystal ball. Those who prefer a government-managed, single-payer system seize on the uninsurance rate to justify it. Why would any sane, market-oriented person want to give them more ammunition for their argument?

The best answer is to maintain choice. Let employers decide, as they do now, whether to provide group insurance and in what form they will or will not provide it. That is a free market.

Thursday, April 24, 2008

"Unaffordable co-pays"

Recently, I ate lunch with a group of Michigan health insurance agents. Earlier that morning, they had endured my talk, “Arming Agents for Health Care Reform.”

Table talk turned to the plausibility of employees choosing high deductible health plans (HDHPs) over traditional HMO or PPO (networked) health plans.

Then the talk turned to unions, and their contracted health plan designs.

“So the UAW fought the automakers over a $5.00 co-pay,” I said, “saying they feared it would grow to $20.00.” I shook my head in disbelief.

“I’ve got groups with $2.00 co-pays!” one agent said, referring to a public school teachers’ group she serviced. “Try talking to them about HDHPs, HSAs and anything that costs them out of pocket.” Actually, I would like to, but that’s another story.

Going to a Tigers’ game

The teacher and her electrician husband drive two hours to Detroit for a Tigers’ ball game. They hand the parking attendant $15, and walk to the park, handing the ticket-taker a pair of $35 seats.

They have a great time. The Tigers even win.

He drinks three beers at $7.00 each; she sticks with diet Cokes at $5.50 each. They eat three hot dogs each, at $5.00, and share an order of nachos with cheese - $7.00.
After the game, they walk down the street, and pop into a restaurant for a leisurely dinner, spending $49.50, plus a tip.

On the way home, the wife begins feeling faint, turns pale, and throws up (thankfully, she had saved the plastic souvenir Coke cup). Her stomach starts cramping up, and she feels rotten. Since it came on fast, they pull off at the first sign saying “hospital” and head to an emergency room.

“Okay,” the admission’s clerk says to the husband, while his wife lay in an ER bed, “all I need is your $50 co-pay, and we’re set.”

“I thought it was $25,” he protests.

“It is, but only in a hospital in your insurance plans’ network,” she explains.

“Hey, this is about my wife’s health!” he exclaims. “I don’t get it. Why should we have to pay anything?” He launches into a rant about greedy insurance companies and selfish employers as he reaches for his credit card.

“This is just unfair, and who can afford it anyway?”

Indeed.

Saturday, April 19, 2008

Health care and police forces

Recently, a socialist argued that great countries have learned they must assign certain duties to governments, and among these is the responsibility to administer and pay for health care. The socialist argued that after all, governments already use national schemes to provide many basic services, and named armies and police forces as examples: Why not also administer health care?

He could have mentioned that governments also build and manage the interstate highway system, waterways, forests, water purification, and any number of other such entities. (Of course, there is that inconvenient fact of a bridge falling down last August 1 in Minneapolis.) Whether it is best for us to have assigned these duties to governments is an argument for another time. I prefer to unpack the idea of police forces for our socialist friends to ponder.

Policing, at the beginning of our nation, was not a government duty; it was a private duty. That notion fell victim to dense population centers and a sense of desire for more security. Few but the most extreme libertarians would argue against government-provided police forces, sheriffs, U.S. marshals, the FBI, and such.
Our socialist friend asserted that police forces provide a level of proof that a national, single payer health system makes plenty of sense. Since governments run this essential service that serves a common good, all services that serve a common good could or might be nationalized (or governmentized).

What do police officers do, where do they do it, and who pays their bills? Moreover, do they do it alone?

Where’s that peacekeeper while someone is burgling your home?

Police offers have sometimes been labeled peace officers; nothing could be further from the truth. While the presence of a police officer, or a squad car, might have the effect of reducing crime while there is a police presence, there are far too few police officers to actually keep the peace.

The primary duty of police officers is to come along after a crime has been committed, to search out and find the criminals, and remove them from the population. Seldom can one call a police officer before a crime is committed in order to get that officer’s protection from the crime. There are two plain reasons for this: First, one has no sure knowledge that a crime will be committed, and therefore, cannot call for a police officer in advance. And two, there are not nearly enough police officers to assign each one a peacekeeping role.

Police officers are to public order what emergency rooms and specialist physicians are to health care. They are on call and ready to help, as long as not too many crimes are committed at the same time in nearby jurisdictions. When there is an outbreak of crime, its victims must wait for hours before the squad car shows, and by then, the criminal has long since left the scene and the victim’s bloody wounds have become the concern of a local medical emergency room.

Of greater importance is the simple fact that government police forces only provide a small fraction of the peacekeeping required to maintain social order. The primary role of peacekeeper is borne by hundreds of thousands of private security workers. They guard buildings, act as bodyguards, ferry millions of dollars in armored cars, secure routes for superstars and politicians, patrol shopping malls, and keep an eye on communities. These peacekeeping guards are more like our system of private physicians that provide health care services to almost all Americans. They are outside the government system, except for the likely requirement for a license, and by such, a certain form of proof of competence.

Government-paid police forces are augmented by a vast army of private sector “police officers” who serve as the nation’s peacekeepers. To suggest that police forces are an example of a common good being met in any comprehensive fashion by governments is facetious and shortsighted; and it is untrue.

(The same argument could be extended to our justice system, relying as it does on hundreds of thousands of private legal practitioners (lawyers) to carry the primary burden of ensuring justice for their clients. Americans agreed that the government should provide a justice system, but lays very little of its duties on government agencies; rather, relying on a contract system most often the result of negotiations between armies of lawyers in private practice.)

There is one other significant characteristic of police forces to consider: They are almost all locally controlled, by small town boards, city councils, county boards, or state legislators. They are not national “single policing” organizations. Policing is a local issue.

Neither is the administration of health care a national issue; it is a local issue, and serves the needs of communities and populations that hardly resemble each other in lifestyles, ethnicities, racial compensation, traditions, wealth (or lack of it), and in untold other nuanced differences. People are different in different places, and it would be a sorry place to live that tried to force them to all live and look alike.

Thanks to the U.S.

The United States, much to the chagrin of liberals and socialists, has the world’s most powerful military force. One might argue that it is too large and too strong given the relative lack of attacks on the United States, but such an argument is extremely shortsighted and naïve. The fact that we have sustained so few attacks is testimony to our military strength; but I add this for a more important reason.

Were it not for the strength of the U.S. military, most foreign nations would be forced to spend billions more on defense, and on building their own military forces. If the United States pulled out of Iraq, Afghanistan, Germany, Japan, and all other foreign military bases, does the liberal and socialist assume that those nations would be comfortable with the void such a withdrawal would create? Such naïve thoughts seem even beyond their pale.

Suppose, however, that the U.S. drew down its military force to the handful that liberals and socialists seem to desire, thereby saving our country $300-400 billion or more each year (and spend it on health care and education). If such a thing were to happen, would Canada and Mexico feel as secure as they do today, or would they be forced to spend tens of billions to build their own military forces for the sake of security? I think the former is most likely, and if Canada built a national military force powerful enough to provide such protection, the money would have to come from its citizens, and would further strap their health system with shortages heretofore unthinkable. It is arguable, in fact, that the strength of the United States’ military helps Canada in its attempts to provide a government-run health system.

If the United States was not the home to 80 percent of the world’s pharmaceutical research, medical device research, and medical entrepreneurism, the health care systems of most foreign nations would be hard strapped to create medical innovations, much less provide necessary daily health services through their government-run plans.

For the United States is the world’s medicine cabinet, and its police force.