FAQs about other health care legislation
- Why is the MN Health Plan better than an insurance mandate?
- Why not use tax subsidies to help the uninsured buy health insurance?
- Why not Health Savings Accounts?
- Don't we need tort reform, malpractice is driving up the cost of care?
Forcing people to buy insurance when they cannot afford it, is not fair and doesn't work. And, because the mandated insurance plans often exclude dental and other types of care, it is misguided to require a person with dental problems to spend their last dollars on a plan that won't help them.
The fundamental problem that has prompted reform is the rapidly rising cost of our current insurance-based system. "Universal" care through the mandated purchase of insurance does nothing to reduce costs, rather it bloats the system with more dollars to provide coverage to everyone.
Proponents of an insurance-based system with mandated purchase propose to keep insurance plans affordable by using a basic "benefits set."
The MHP would provide comprehensive coverage for all, using the administrative savings inherent in the single system. Medicare, which is somewhat comparable in that it is a single plan for seniors, has administrative costs of under 3% of revenues, compared to insurance plans which typically have administrative costs of at least 15%.
Because the insurance-based system offers plans that do not have comprehensive benefits, they cannot accurately claim to cover people whose medical needs are not in the benefit set. For example if your medical needs are for dental work and your insurance plan excludes dental, or if the co-pays or deductibles are unaffordable, you do not have the health care that you need, despite having health insurance.
Also, as with Minnesota's auto insurance mandate, there are still many drivers who do not buy it because they cannot afford it - it is not universal despite the law mandating it.
Finally, when there are multiple health plans, there will always be gaps in coverage during transitions between plans. If an employee with benefits loses the job and cannot afford COBRA, or the COBRA coverage runs out, or they lose coverage through divorce or aging out of their parents plan, there is a gap. And in a state of five million people, there will be thousands of people who get sick or injured during these gaps in coverage. Even if the state mandates that everyone buy insurance, they will not achieve universal coverage.
Our health care system is wasteful and inefficient. Rather than propping it up with more subsidies, it's time to fix the system. Tax subsidies, a feature of the federal reform package, provide short term relief for some but leave the basic problems unresolved.
Tax subsidies do not fix any of the causes of the health care mess. They do not reduce costs or address the inefficiencies or administrative waste that takes dollars away from patient care. They simply shift the costs of the system.
Even with tax subsidies for a "basic benefit-set," moderate- and lower-income individuals would be unable to afford good coverage, leaving them with modest benefits and high deductibles making health care unaffordable. The costs of unpaid medical bills due to inadequate coverage would continue to be transferred to those with adequate coverage.
HSA's have lost credibility because they fail to treat the underlying cause of our health care problems and actually discourage people from accessing health care until symptoms have turned serious.
Like the tax subsidies mentioned above, Health Savings Accounts do not fix any of the causes of the health care mess. They do not reduce costs or address the inefficiencies or administrative waste that takes dollars away from patient care. If anything, they exacerbate the problem by taking affluent and healthy people out of the insurance pool and leaving the sick, elderly and low income people, thus driving up the price of insurance.
HSAs are individually owned pre-tax accounts used to pay medical expenses. Once the HSA account is depleted and a deductible is met, medical expenses are covered by a "catastrophic" insurance plan (also known as low-cost, high-deductible plans). Healthy individuals tend to be attracted to HSAs, while older, less healthy individuals need more complete benefits. When sicker people are concentrated in the traditional plans because healthier ones opt for HSAs, the cost of premiums rises dramatically. An obvious example of the inequality of HSAs is that they shift more of the burden to women, whose health care costs average about $1000 more than men. In effect, HSAs move healthier people out of the insurance pool, driving up the cost of health insurance for everyone else, causing a sharp increase in the number of people without any insurance.
Finally, HSAs discourage preventive care - people avoid seeking needed care if they have to pay for it out of a limited account. They defer care that isn't urgent.