Many non-poor people cannot now access health cover

They can't cover deductibles so most of the time effectively have no insurance

Many lower and moderate income Americans can’t cover their cost sharing if they get sick. It raises the question: How much cost sharing is too much?

High deductible plans, which require people to pay large amounts out of pocket before their medical bills are covered, are a good deal for some middle and upper income people. But many lower and moderate income Americans simply don’t have $1,500 to $3,000 to pay for the colonoscopy that might save their life, or a stress test that might reveal the heart disease which is the cause of their chest discomfort.

More than four in in 10 households with private coverage and incomes between 150% and 400% of the federal poverty line do not have enough liquid assets to cover a deductible of $1,500 for single people and $3,000 for families.

That’s not a high deductible plan, but about the average in an employer-provided insurance plan.

Sixty percent couldn’t cover deductibles double those amounts, which are not uncommon, especially in the individual insurance market.

Ninety percent of insured households with incomes of 400% of poverty or more could meet a typical employer insurance deductible, but just 37% of lower income household with incomes under 150% of the poverty level could.

For many families, even if they have insurance, any significant illness could wipe out all their savings, making impossible to fix a broken car to get to work, or pay for school, or make a rent or mortgage payment.

Congress has passed no law declaring that the country will go with high deductible coverage as its main approach to health insurance. There has been no meaningful debate about its pros and cons. But as deductibles and other forms of cost sharing have inched up year by year, the nature of insurance has changed.

The people to worry about most are the ones who are least equipped to deal with that change.

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Terminally Ill Patients Deserve “Right to Try”

After 21-year old Abigail Burroughs succumbed to cancer in 2001, her family created an organization to help give terminally ill patients access to what Abigail was denied: potentially life-saving drugs not approved for such purposes by the U.S. Food and Drug Administration. Fortunately, after much criticism the FDA now routinely grants access to patients requesting such drugs, and most state governments have enacted so-called right-to-try laws. These are steps in the right direction, but more could be done.

Terminally ill patients and their families would have even more hope if Congress passes SB 204, a national right-to-try bill that gives patients access to experimental drugs without having to get FDA permission, explains Independent Institute Research Fellow Raymond March, in an op-ed for The Hill. Passing such a law, he notes, would require its supporters to overcome political opposition.

Remarkably, opponents of right-to-try laws cite safety concerns for their favoring that the FDA continue to have veto power over the decisions of terminally ill patients and their physicians. Opponents also worry that experimental drug treatments create false hope. “What is truly ‘false hope’ for the terminally ill,” March writes, “is to leave life-and-death decisions to politicians and federal regulators. Allowing them unwarranted and unneeded influence only works to deny these patients from a chance to prolong their life. The alternative, although less ‘risky’, is certainly worse.”

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Get Government Out and Let Markets Work in Health Care

Tom Coburn

Ask the average American what he thinks about health care costs, and he’ll tell you a few things. He’ll tell you it is too expensive and too complicated, that he pays too much for too little, and how outrageous it is that Americans pay more for health care than any country in the world. In all cases, he’ll be spot on. He knows there’s a problem, and he doubts it can be solved — but it can.

Here’s what we know: America is predicted to spend $3.5 trillion on health care in 2017, but about a third of that spending will have no health impact whatsoever; we know that health care inflation accelerated when the government became the primary purchaser of health care for more than half the country; and we know that around $100 billion of government health spending is the result of fraudulent billing and improper payments.

We need policies that encourage competition and transparency, allowing markets to function freely and lower costs across the board.

Put simply: the American health care system is broken. Decades of government mismanagement and over-regulation have encouraged waste, fraud, and inefficiency, which may benefit the healthcare industrial complex, but harms patients and tax payers in the long run. To fix this, we need policies that encourage competition and transparency, allowing markets to function freely and lower costs across the board.

Fortunately, this idea has begun to gather widespread support. A recent study from the Brookings Institution argues that the way to really lower health care costs is to address anticompetitive regulations and practices, like Certificate of Need requirements, health systems acquiring physician-owned practices, and hospital mergers.

The study also argues for federal and state authorities to more actively enforce antitrust laws in the health care industry, which is one of the most important steps that can be taken towards real health care reform. Without real competition, hospital systems, like all monopolies, are free to charge high prices for a subpar product — which is, in this case, your medical care.

These reforms are all necessary, and would have a real impact, but there is still one thing that has not been offered to remedy the barriers to accessing fairly priced, high quality care: price discovery.

Most proposals for health care reform are based around the assumption that people either can’t or won’t take initiative in finding the best health care to meet their needs, and so someone – either an employer or the federal government – has to make those choices for them. This couldn’t be more untrue. The Amish community is a perfect example of how to shop for health care and save a few dollars in the process. I dealt with plenty of Amish patients in my 25 years as a practicing physician, and I was always impressed by their determination — and success — in shopping for value. I get the sense that they buy health care in the open market cheaper than the most sophisticated employer-based plans would provide.

The Amish are, of course, a special case, driven to this kind of frugality by their religious convictions. But they don’t have to be. A wave of new websites and apps – like HealthEngine, Medefy, and MedEncentive – are saving patients and employers hundreds of thousands of dollars a month by making it easy to search for the best values among providers and other medical services. As employers continue to make use of these tools, providers will be forced to compete for patients’ business, not just by lowering prices, but by increasing the time they spend with patients or offering additional services, like telemedicine.

The way I see it, in other markets, the sellers chase us — telling us their prices, their quality, and how much better they are than their competitors. Other businesses, like Trip Advisor, Car Fax, and Schwab help us to sort through our options.   It shouldn’t be any different in health care.

Today, inefficient hospital chains, big insurance companies, and a bloated federal bureaucracy like the status quo, not because it’s the best option for American patients, but because it’s the best way for them to maintain their profit margins and power. By rolling back anticompetitive regulations and broadening the use of price transparency tools, we can level an unfair playing field, and make it possible for individuals to regain control of their health care. 

The benefits of competition have already been demonstrated by the direct primary care model, where medical practices don’t take insurance. Instead pay a monthly fee – usually around $100 – in exchange for unlimited primary care services. Without insurance to reimburse them, doctors have to compete for patient business, offering a variety of perks, most especially longer visits.

Longer physician visits have a broader benefit, since doctors who spend more time with patients order fewer expensive (and unnecessary) tests, and have lower treatment costs in general.

When it comes to lowering health care costs, we’ve tried everything but price transparency.

How can we introduce this level of competition into the rest of the health care space? The simplest change would be for the federal government to unleash all of Medicare and Medicaid’s information on hospital and physician charges by zip code, and let private entrepreneurs mine the data to find the most efficient providers. Congress could take this a step further by passing a law that mandates all hospital and physician prices must be published and made available to the public in a clear and concise format. As soon as people can readily access this information, they will begin voting with their feet.

When it comes to lowering health care costs, we’ve tried everything but price transparency. Our best option is to empower individuals to choose what’s best for them in a free and open market.

It works for 80 percent of our economy — who says it can’t work here?

SOURCE

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Seattle Saved From Punitive Income Tax

King County Superior Court Judge John Ruhl ruled that Seattle's recent income tax is illegal.

In a little-noticed court decision Monday, King County Superior Court Judge John Ruhl ruled that Seattle’s recent income tax is illegal. We argued it was back in July, so we’re glad Ruhl came to the right conclusion.

“Today’s ruling is a victory for all taxpayers in Seattle and throughout the state, and for everyone who values the rule of law,” said Brian Hodges, an attorney with Pacific Legal Foundation, on behalf of the Seattle residents challenging the tax. “The court performed a service for all taxpayers, and all property owners, by defeating the city’s strategy to undermine their rights.”

As we noted in July, Seattle has hiked its minimum wage, hurting low-income workers by reducing jobs and hours. The city likewise wanted to specifically target wealthier people with a 2.25% tax only on people earning more than $240,000, or $500,000 for couples, annually. Of course, the legal challenge was inevitable. Washington state is one of seven states without an income tax, and state law prohibits cities from levying one — especially one that’s “uneven.” Seattle’s tax was in essence a bill of attainder (outlawed in Article I, Section 9) specifically targeting one group of citizens for the “crime” of earning more money than other people.

The city resorted to some creative rationale to defend the tax. That included arguing it wasn’t an income tax but an “excise tax,” despite the first sentence of the city ordinance calling it … an income tax. But Ruhl wasn’t fooled. “The City’s tax, which is labeled ‘Income Tax,’ is exactly that,” he wrote. “It cannot be restyled as an ‘excise tax’ on the alternate ‘privileges’ of receiving revenue in Seattle or choosing to live in Seattle.”

We’ll see if the same wisdom wins the day if and when the city appeals to the Washington Supreme Court.

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For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated),  a Coral reef compendium and an IQ compendium. (Both updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on THE PSYCHOLOGIST.

Email me  here (Hotmail address). My Home Pages are here (Academic) or  here (Pictorial) or  here  (Personal)

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