My Letter to the Editor of Atlantic Monthly

There’s an excellent article in the September issue of Atlantic Monthly on why putting health care choices in the hands of consumers will mitigate the trend in escalating health care costs.

Though I don’t fully agree with the author’s proposed solution, there are some valid points. Here’s my letter to the editor:

David Goldhill’s “How American Health Care Killed My Father” in the September issue of The Atlantic Monthly is one of the most insightful, comprehensive articles that I have read about the problems with America’s medical care delivery system. I can validate the author’s assertion that consumer-centered health care, which fosters personal responsibility, is the solution.

Goldhill is correct when he suggests that prices will drop when we implement a system with “routine care funded largely out of our incomes; major, predictable expenses (including much end-of-life care) funded by savings and credit; and massive, unpredictable expenses funded by insurance.” In fact, it is happening now in the individual, private insurance market. Unlike with employer or government insurance plans, consumers pay the full premium and select their own plans from a marketplace of carriers and benefit designs. Because of the low premiums, they gravitate naturally to the HSA qualified plans, often picking those with the highest deductibles allowed. They pay for minor expenses and save up for larger expenses and the insurance kicks in when they reach the deductible threshold.

Just as Goldhill suggests, behavior has changed when patients pay directly for health care services. Patients have a financial incentive to stay healthy, so they make wiser lifestyle decisions, research symptoms, have meaningful discussions with providers, and look for a better value for their dollar. They choose generics over brand names and family physicians over specialists. Symptoms are often found and treated early, since most of these high-deductible plans offer 100% coverage for preventative services. Unlike skeptics of HSA plans predicted, studies have shown that these patients are not more likely to forego necessary treatment than those covered by a traditional health insurance plan.

Goldhill states, “Most pregnancies are planned, and deliveries are predictable many months in advance, yet they’re financed the same way we finance fixing a car after a wreck—through an insurance claim.” He’s right. That does happen with most group plans, but that is not how an individual health insurance plan functions; a pregnancy is treated as a predictable expense. The result? Premiums are a lot cheaper since normal maternity is not included. Lower premiums give the young couples hundreds of dollars in savings in premium a month to allocate for those costs. When they have babies, they pay for the delivery and receive a discount from the hospital. Any possible complications of pregnancy or delivery are covered by the policy and apply to the deductible, so there’s a cap on what the patient would have to pay out of pocket for large claims.

I agree with the overall premise of Goldhill’s solution: to put more of the dollars in the hands of the consumer that are currently being spent on Medicare and Medicaid programs and high cost, low deductible health insurance premiums offered through employers. But I propose that we take the government out of the insurance business. As Goldhill stated, “Cost control is a feature of decentralized, competitive markets, not of centralized bureaucracy.” I concur.

Therefore, I would suggest modifying Goldhill’s  proposal: 1) rather than having the people pay into a single payer, government run, high deductible health insurance plan as suggested, allow Americans to purchase one from a competitive, private market place which, would reduce premiums, promote customer service and innovation; 2) instead of the government dictating the benefits and deductible and mandating coverage (which senior law attorneys are saying may be unconstitutional) , allow insurance carriers to create products that permit choice in the deductible and benefits offered; 3) as proposed, offer plans guaranteed issue but only initially for an open enrollment period as we transition from employer and government plans to private plans, but then allow the carriers to underwrite based on risk ; 4) expand HSAs to allow premiums to be paid with them; and  5) rather than contributions being post-tax as proposed, keep the tax deductibility for HSAs so that we are not in effect adding a tax to every individual. These changes would truly drive down the price of health insurance and the cost of health care for everyone.

Thanks to this article we can change the dialogue from the current health care debate, which is headed in the wrong direction.

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