The Health Care con to come

Tuesday, November 14, 2006 at 02:41 PM

What does a powerful group of corporate interests do when they see their interests threatened?  You really need to ask?

They come up with their own rather questionable "solution" to the problem that has caused the threat to them, one which guaranties that they will remain powerful, successful, and rolling in profit.

Case in point: health care in the United States and the insurance industry.  A NY Times article today notes that:

The latest government figures show that 46.6 million Americans lacked health insurance in 2005, an increase of 17 percent, or 6.8 million, from 2000.

Not only would this fact alone threaten insurance company profits--there is no profit in people who do not have your insurance--but the potential resort to a single-payer universal health care system might cut insurers out altogether or, at a minimum, restrict their ability to squeeze profit from a sick stone.

So what is the headline on the NYT story?  Health Insurance Industry Urges Expansion of Coverage.

The insurance industry urges two very good things: (1) expanding Medicaid to cover all adults with annual incomes under the poverty level, and (2) expanding the Children's Health Insurance Program to cover, at a minimum, all children in families with incomes less than twice the poverty level.

But that won't help the insurers much.  So there's more:

Congress should create tax incentives for people to establish "universal health accounts." People could take tax deductions for amounts contributed to such accounts. They could use the accounts to pay premiums for any type of health insurance. The federal government would help pay premiums for people with incomes below certain levels.

Congress should establish a tax credit for individuals and families who buy health insurance for their children. The credit would be $200 a child, up to a maximum of $500 for a family. It would be available to families with incomes up to three times the poverty level -- up to $60,000 for a family of four.

Not bad Health Insurers, you really come out ahead on those!  Not only do you get the benefit of premiums paid in part by the government forgoing tax revenue, but if these provisions were ever to actually become law, the existence of these programs would be a major disincentive to go to a comprehensive, centralized universal health care system.

Not surprisingly, the Times also notes:

The industry did not say how its proposals would be paid for; did not recommend any budget cuts or tax increases; and did not say what, if anything, it would do to slow the growth of health costs.

Not mentioned in the Times is the fact that many of the health plans purchased through "universal health accounts" and "health savings accounts" tend to have very high deductibles.  In industry parlance, these plans are called "consumer directed" plans, and often serve as "catastrophe insurance"--the insured pays all or most of the first several thousand dollars, with the insurer picking up coverage after that.

It may sound innocuous, but there's already evidence that they discourage consumers from seeking necessary health care.

You have to get up pretty early to beat the insurance industry.  But we better start setting our alarm clocks, 'cause that's the only way that health care costs will ever become manageable in this country.