Wednesday, November 30, 2016

A look at various healthcare alternatives

American healthcare is of good quality, but it is expensive and not available to many people. Individuals pay (with premiums, copay and deductions) and governments pay (with tax money or deficit) and 17% of GDP is on healthcare and at least half of that is overhead. Here is the summary of five healthcare alternatives.

It is completely philosophical and ethical stand where you stand on healthcare. Some believe in free market to bring quality, progress in medicine and service innovation. Some believe healthcare is right and every one deserves and government needs to provide it.

Before Obama:

  • 15% of the population is people with over age 65 and they get insurance with Medicare. 15% of them are poor and disabled and they get insurance from Medicaid program. Payments for these polices are funded by taxes on income and payroll.
  • 60% of the population have employer sponsored or group insurance. 10% of population buy insurance themselves in individual market.
  • After considering overlap of some having both medicare/medicaid and private/employ insurance, 85% of the people have some insurance. Many of these people are under insured as insurance companies can have limits and caps on payments.
  • Overall 15% of the people have no insurance either because they are poor, they do not want it or they are denied by insurance companies. They do not go to hospitals unless they are really sick. If they can not pay, the system absorbs by raising costs and taxes on every one.
  • Insurance companies may also charge women more, sick more, not cover existing diseases, put more premiums, deductibles and copays for trading with quality, or different rules for different hospitals depending on which state they operate.

Obamacare:

Tries to bring more people under insurance without replacing private insurance plans. It brought new 9% of the population under insurance.

  • Insurance offerings should not deny based on health, gender or age and should cover all preexisting conditions. They should not have caps on total payment.
  • Improve coverage by extending medicaid up to 138% of the poverty line, allowing people to stay on parents' plan till age 25, forcing all companies with 50 people to sponsor insurance or pay additional tax, providing exchanges/government run websites where insurance companies compete for individual buyers, providing subsides on those websites who are below 400% of poverty line. Subsides and medicaid grants are funded from more taxes on rich and federal deficit.
  • Reducing costs - Keeping people healthy by forcing insurance companies to not charge copay for preventive care, incentives to keep elderly people healthy, paying for health care based on output per person instead of per treatment or per test or per visit in medicare, regulating insurance companies to not have more than 20% overhead on healthcare or send rebate back to clients.
  • All of the above fairness and coverage ideas cause loses or reduce profits for insurance companies. Solution is to mandate every one including young and healthy to have insurance or pay small tax.

Why it became infamous despite having so many good things?


  • Some are philosophically against mandate and think it is against freedom.
  • Supreme court allowed states to reject extensions to medicaid and twenty states rejected.
  • It is gradual roll out and some are phased out.
  • Insurance premiums increased because more payments need to be done and insurance companies are mainly business oriented and tried to extract more or retain profits.

Clintoncare:

It tried to extend Obamacare more.

  • Reduce out of pocket expenses by allowing three doctors visits without copay, limiting max responsibility of individual to 250$ for medicines per year, tax credit 2500$ per year for out of pocket expense is more than 5% of income
  • Increasing competition by offering public insurance in addition to allowing private insurance companies in exchange. Payment is from federal deficit and indirectly from federal taxes.
Sanderscare:

It tries to replace Obamacare with single payer or government insurance. Payment is from additional 2% income tax and capital gains tax and additional 6% payroll tax and the rest is from federal deficit.

Trumpcare:

Though it is claimed as repealing Obamacare, it may end up like some additions and some removals.

  • Keep preexisting conditions coverage and young adults coverage under parents.
  • Reducing premiums by giving more medicaid grants to states, removing regulations for cross state business for insurance companies. Funding for grants is minor federal deficit.
  • Reducing taxes by allowing premiums as tax deductions.
  • Remove the individual mandate as it is disliked philosophy for some people.
  • Possibly removing many regulations Obamacare got and give freedom to insurance companies again on policies and offerings. This may cause increase in out of pocket expenses for some clients.

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