Optional Medicare for businesses?

By Jack E. Lohman                    

Liberals want Medicare-for-all and conservatives say it’s too costly.

Some like the free-market “for-profit” system, others don’t want profit driving medicine. Some don’t want the government involved, others trust elected politicians more than unelected CEOs.

So, let’s have both. How can anyone argue against that?

For those willing to pay the extra costs of the insurance bureaucracy, let them. That 31% of the dollars includes broker sales commissions, marketing and advertising costs, high executive salaries, bonuses and stock options, ever increasing shareholder profits, and even lobbying and campaign contributions that are added to the price of the policy.

If the conservatives want to pay it, let them. That’s the free market they espouse, and it keeps some people in jobs.

But for those who want health “care” instead of health “insurance,” let them opt into the federal Medicare system and reimburse Medicare for its actual costs. Employers can give employees the choice, and if one is more costly they pay the difference.

For those unfamiliar with Medicare, it’s simple. You get sick, you get care and the caregiver gets paid. But the providers get paid by the Medicare administrator – which is Madison’s non-profit WPS – instead of the insurance company the employer has chosen. This year, anyway.

The hospital or doctor doesn’t have to fight to get paid – the payment is guaranteed and there is little or no bad debt. And they remain as private contractors to Medicare, just as is WPS. It’s the same private hospital and doctor you see today, just a different payer and it's portable if you change jobs.

Here’s what’s interesting. If Medicare truly is too costly, as its opponents claim, there’ll be no takers. But if Medicare is cheaper, the private insurers will have no takers! How’s that for competition and consumer choice?

Here’s the rub. Medicare IS more efficient and private insurers will not want to compete with them. They can’t compete now, as private Medicare HMO contractors, and it won’t be any easier under this system.

However, one thing must be changed. Whether HSAs or not, private insurers must provide the same level of care as Medicare does. No pre-existing disease exclusions. No limits on coverage. No gatekeeping. No denials of care. No cancelling when costs start increasing. In other words, no playing games, no under-insuring and no cheating. Patients get care when they need care. Always!

This doesn’t get us to a perfect system, just a more efficient and competitive one. There remain problems with both the fee-for-service Medicare system and the "flat rate" HMO/PPO models typically in the market. With FFS the physicians receive more income as the amount of care and ordering of tests increases. Sometimes too much care can be as bad as not enough care.

Conversely, with the fixed-rate HMO/PPO models, as more tests are ordered those costs come out of the bottom line profits. So depending on the financial relationship between the physician and HMO/PPO, needed tests could go undone so the profits increase.

All of this can be fixed if politicians have the will. Doctors and clinics should not be allowed to profit from expensive testing. Hospitals should not be able to employ physicians. The certificate of need should be reinstated and hospital overbuilding should be restrained.

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