The Health Care Reform Bill; the Promise of Pears on a Willow Tree

One week after posting my open letter asking for a concept in the health care reform bill, I received an email from President Barack Obama.

Several hours before my letter showed up on Huffington Post, I forwarded it to the White House, using the "contact us" form on their website. I thought that it would be nice to let them know about the letter before making it public. In the process, I revealed to them my personal email address. At this email address, I received a generic mailing from President Barack Obama a week later, with the subject line "What health insurance reform means for you". Adding my email address to the White House spam list appears to be the only practical outcome of my open letter to President Obama.

At almost exactly the same time, I received an email from my acquaintance commenting on my text. Actually, he forwarded to me the same spam email from the White House with a comment, "Seems ok to me, what's all the fuss about? It's about time we check and take away control from the free market thugs who could care less unless you give them money."

This email prompted me to look again at the message from Mr. President. Let us cite it here:

• No discrimination for pre-existing conditions
• No exorbitant out-of-pocket expenses, deductibles or co-pays
• No cost-sharing for preventive care
• No dropping of coverage if you become seriously ill
• No gender discrimination
• No annual or lifetime caps on coverage
• Extended coverage for young adults
• Guaranteed insurance renewal so long as premiums are paid

On the surface, it looks good. Actually, it sounds like a promise of Christmas every day of the year: too good to be true.

A pledge of no discrimination for pre-existing conditions prompted me to look into encyclopedias for definitions of insurance. It is a way of managing risk of unexpected losses. Therefore, by definition we cannot buy insurance to cover the repair of a roof after that roof began leaking. Trying to do this would be a fraud. One might expect that a Harvard Law School graduate knows it. Nevertheless, this is what Mr. President is promising us in his email.

Should it mean that a sick person, with a pre-existing condition, should not be able to get medical care? Obviously, no. However, health insurance as we have it now is not a way to handle this. This could be handled in two ways. One is by government assistance for people in need. This is how it is done -- imperfectly -- now. The second way is by creating a new insurance product, lifelong health risk insurance, paid for throughout life and meant not for coverage of petty everyday medical expenses, but for coverage in instances when health care costs, for whatever reason, go above a predefined level of affordability.

Health Care as an Entitlement

In the first approach, health care for people with high treatment costs is secured by the government, and paid for by taxes. We have it partially now, as Medicaid pays for medical treatment for poor people. For others, it is a so-called "community benefit", which mostly means hospital care for people who do not pay. We all pay for this later, in increased rates for people covered by Medicare or private insurance. If we select to continue this path, we could formalize what we now pay anyway, and agree that everyone should receive medical care in instances where the cost of treatment goes above some predefined levels that we would accept as being above affordability for most Americans.

When agreeing on this, we could notice as well that many serious health conditions could be dealt with better in their early stages. Hence, we would conclude that good everyday basic health care could save us a lot of money otherwise spent on emergencies and advanced stage illnesses. The final conclusion in this path of reasoning would be that health care should be a basic right of every American the same way as education is. This way we would end up with a health care system similar to the one in France now, where everyone receives health care when needed without worrying about any payments, as the government there pays doctors and hospitals as our government supports teachers and public schools.

Health Care as a Product

In the second approach, we would assume that health care is a service, similar to our home or auto repairs. This is how our current private health insurance works now. Unfortunately, it works imperfectly.

If we look closely into our current health insurance plans, at their core they are not insurance at all. Mostly, they are health maintenance plans: something that we could compare to an extended car warranty. They cover unexpected high-cost medical treatments, but only for the duration of the contract, usually one year. Therefore, if a bus would strike someone insured, all medical expenses, within agreed limits, would be covered. If someone would get a stroke, it would be covered as well. However, if such an event would result with a need for ongoing health care, this would be excluded form the renewed policy as a pre-existing condition, or would be covered by the policy collecting in advance an estimated cost of such medical care. People working for the government or large corporation would be more fortunate, as by a virtue of being a part of a large group, they would not feel the increased cost due to their preexisting conditions, as it would be dissolved in the large pool. Nevertheless, their rates gradually would go up as well, and eventually their employers would ask for larger co-payments. Small businesses would have premiums raised at the next policy renewal.

Sticking to the concept of health care as a commercial service, we can overcome the problem of preexisting conditions only by implementing a new product: a lifelong insurance against instances of catastrophic health deterioration. With the risk, that an insurance company might go bankrupt, people would buy this long term insurance only if it would be guaranteed by the government, in a similar manner as our currently government-guaranteed bank deposits.

Insurance companies issuing health risk insurance would notice that they would spend less for the treatment of the seriously ill if people would have better preventive and basic medical care. Consequently, they would be financially interested in promoting health maintenance plans, similar to those called now "health insurance." Furthermore, recognizing the importance of health care, the government would continue its policy of tax deductions for buying health insurance, and could structure its policy in such a way that not buying health risk insurance would mean higher taxes. This way, without a mandate, we could have the prevailing majority covered.

What Is Better?

I have no intention to hide that, based on my understanding of how things work, I am convinced that we could have better health care at lower cost when treating it as a product, not as an entitlement. However, I have to acknowledge that systems built on the opposite concept can provide satisfactory results. For example, the World Health Organization named the French health care system as the best in the world.

My point is that these two approaches are not compatible. It is as with driving on the left or on the right side of the road. I have heard opinions why one is better than the other However, we cannot have both at the same time. President Obama claims that those Americans that are satisfied with their current health insurance would be able to keep it when others would go with the public plan. This promise boils down to the pledge that with his health reform proposal, some vehicles would be allowed to follow the right side road rule and some the left side rule.

We may debate endlessly which option is better. However, trying to combine them is the worst of the worst. It creates the monstrous apparatus with the wealth of the private industry and the political strength of the government. This hand in hand work of the government with the health care industry is the main reason for our current health care crisis at the first place. However, naming the problem is not an objective for President Obama.

It is striking that in the email from President Obama quoted above, we do not see a former university professor who could outline to us the essence of the problem, present the viable options, and tell us which one is better. Instead, we have a voice of an every day politician promising as usual what people want to hear, or -- as a Polish saying goes -- pears on a willow tree.

Comments

[Mike Elman]

Your letter was very well written, but it seems to me that the answers you were looking for were never given. It is like he is trying to calm the people by saying what they want without any details on how it will even be possible to carry out.

Mike- http://www.onedollarglobeinsurance.com

[Edmonsky]

Henryk A. Kowalczyk:
Your letter, even though addressed to the President, was vetted by the office of communications director for the White House’ Health Reform Office, Linda Douglass. Linda Douglass office screened your letter and appropriately gave it the urgent courtesy it deserves through the canned response you received. It is a matter of commonsense that going through your tortured argument was a man-hour wasted for other productive things that call for judicious attention. For instance, you argued and l quote:

“Therefore, by definition we cannot buy insurance to cover the repair of a roof after that roof began leaking.”

A roof may not have pre-existing repair condition but every adult human being has a pre-existing healthcare condition.

I am not going to bring any academic authority to tear your argument into pieces. You are the authority unto yourself and there is no argument. Furthermore, l do not know anybody who has ever won argument against Ted Kaczynski in his middle age. You may not know that any staff in the White House who is so audacious to bring your letter to the attention of the President will be fired on the spot. We are no more living in the 20th century and the world has moved on. Human atavistic inheritance of the cave-dweller has always reared its head at every turn in human social intercourse.

[Henryk A. Kowalczyk - Huffpost Blogger]

Dear Mr. Edmonsky,

An open letter is a literary form, http://en.wikipedia.org/wiki/Open_letter . Despite being addressed to a prominent recipient, in its concept, it is addressed to people like you.

I found it entertaining that after receiving my letter, the White House staff added my email address to their spam list. I decided to share this with readers here.

I would be very surprised if the White House would actually reply. I am troubled by your reply though. I really care for having some debate on the merit here. How much your reply is different form the yelling of people on the other side who disrupt town hall meetings?

I would gladly address your concerns regarding accuracy of my facts or logic of my reasoning.

[reasonshouldrule]

This is an idea right out of the 19th century. Although free markets brought some prosperity to many countries, including the U.S. during that time, it also brought lots of problems, such as massive exploitation of labor and other groups. This is the 21st century, and free markets are not really free. And considering everything as a "product" distorts the reality of life in a complex society. Some things simply should not be addressed as products, health care and education being two of them.

[fwcroft]

Kowalczyk raises a troubling issue. The arguments in re health care remain focused on funding methods rather than the fundamental question: how do we create a more healthy society? The president's flirtation with evidence-based medicine left quicker than the concept of a productivity czar, and now we're back to demonization of opponents and unsubstantiated claims that all of this is somehow affordable.

No one is looking at the difficulties that the ADA Act creates for incenting healthy behaviors; nothing addresses the waste of resources driven by the present malpractice approaches. (Why isn't malpractice criminal rather than civil? Why create legal Lotto rather than preventing bad care?) How do we avoid the problems of triage and technology limitations which most universal health care programs accept? (The president's dissavowals won't be convincing until he explains how he intends to fund his program and why Elmendorf's analyses are wrong, which he hasn't done convincing­ly....) How do we build health rather than provide a "health plan" that subsidizes over-testing, stupid lifestyle decisions, and slows the introductoion of newer and more effective methods and technologies? Neither political party has addressed the core issues.

Health care can get a lot more effective and inclusive than it is now. But we won't get there if we fixate on funding structures rather than managing health.

[tompoe]

Try to focus, Kowalczyk. Healthcare is an inalienable right. It is a human right. We're the only country in the world that does not provide universal healthcare to its citizens. For forty years, healthcare has been treated as a product, a commodity. What makes you think anyone believes if we do the same thing again, it will come out different? 36 countries provide superior healthcare. Your product approach has us sitting at 37 and falling. Worse! We pay several times more for this inferior quality crap called healthcare than any other industrialized country, and we still have 50 million not covered.

[Henryk A. Kowalczyk - Huffpost Blogger]

One can see health care might as an unalienable right. This is just one possible point of view.

On the other side, one can construct a valid argument that it is in my egoistic interest that my neighbors have health care at least as good as mine is. When healthy, they are more productive and might make more money, so they can afford to buy products and services I produce. When healthy, it is less likely that they will use government support, which is paid by my taxes. When healthy, it is less likely that they would carry diseases that might spread to me. I read a study that youngsters which become criminals are having more chronic illnesses than other kids do. By keeping them healthy, I lower my chances of being mugged or having my car stolen.

Using pompous terms as “unalienable right”, as you suggest, sounds so lofty. Counting dollars and cents, as I suggest, is so petty.

However, if your own life would be in stake, would you count on someone recognizing your alienable right, or on someone helping you in his or her egoistic interest?

[tompoe]

Over 5 billion people live with some form of universal health care that utilizes single payer delivery. Almost 74% of Americans argue from the premise of universal healthcare as a right. You stand with a select handful of humans. My goodness, that must truly warm your heart.

[Dosadi]

Why don't we get rid of the middle man? Just because a corporation exists today does not mean it has to stay in existance. The health insurance companies offer no value to health care. So why keep them around? You article was well written but evades the true problem, we have middle men robbing us blind and killing those that don't suit their needs.

[bannorhill]

So you want to get rid of the middle man. That is fine.

You work it out directly with your doctor and pay him directly out of your pocket. If you can not afford treatment that is between you and your doctor to work out. Maybe you can sweet talk him into doing it for nothing.

Go ahead. Cut out the middle man. Just don't look for me to pay. That problem is between you and your doctor or hospital.

[Edmonsky]

Henryk A. Kowalczyk wrote:
“A pledge of no discrimination for pre-existing conditions prompted me to look into encyclopedias for definitions of insurance. It is a way of managing risk of unexpected losses. Therefore, by definition we cannot buy insurance to cover the repair of a roof after that roof began leaking. Trying to do this would be a fraud. One might expect that a Harvard Law School graduate knows it. Nevertheless, this is what Mr. President is promising us in his email.”


When you write to say about the President that “one might expect that a Harvard Law School graudage knows it” betrays your arrogance and vanity. You had also expected the Whitehouse to engage you in fruitless academic argument and drew blank and hence your vanity came to the fore.

Mr. Kowalczyk, if you are sincere in getting answers to your question, you may wish to present your treatise on healthcare in any of the well-established academic journals for peer review. Whitehouse is a wrong place for what you are asking for. If a US President were to engage people like you on a daily basis in such academic arguments, that presidency will enter into state of paralysis without accomplishing anything. Imagine for a second the national security briefs he reads everyday and answers to them coupled with meetings. The President has no time to massage your super-inflated vanity.

[Henryk A. Kowalczyk - Huffpost Blogger]

I noticed that the Harvard Law School graduate does not understand the meaning of the term "insurance". If you believe that I am not correct in my observation, please bring any academic authority and tear into pieces my argument.

King has no cloths Mr. Edmonsky.

[bannorhill]

Thank you for bringing some realism to people expecting Santa to pay their expenses.

People take risks every day. Some work out. Others don't.

If you risk a dollar on a Lotto ticket and lose it is not a big deal. If you live without health insurance you risk medical expenses you can not afford. If you lose at the health care risk why should I pay. I don't ask others to pay for my lotto ticket when I lose. Health Insurance is the same except a much higher risk.

I agree with your lifelong risk approach as long as the person who receives the lifelong risk payment has almost exhausted his or her assets first before receiving benifits. We want to encourage people to be responsible and buy insurance. We should not reward those who took the risk and lost.

It seems that the ones yelling are the ones who understand that this is not free. Someone has to pay for it.

[NordicSci]

A better way to look at health care is as a public good, like fire protection. This model is also consistent with society’s undeniable moral inclination to offer necessary care to the sick and injured regardless of their ability to pay. Most insurance systems (private and public) operate much like public goods: they require broad participation, cooperative behavior, and trust. It also helps if those insured exercise prudence in making claims on the system (avoiding excessive, fraudulent, or frivolous treatments) and avoiding unnecessary risk (e.g., not smoking). The major problem of private for-profit insurance risk pools are that they are very vulnerable to perverse incentives: cherry-picking the risk pool to exclude certain groups who might be at higher risk (e.g., people with pre-existing conditions), cost shifting to those outside the risk pool (e.g., denying as many legitimate claims as possible), and free-riding by people who try to enjoy the benefits of pooling risk without participating financially (e.g., the voluntarily uninsured who put off getting insurance until they encounter health problems). These problems can be effectively minimized by setting up a universal single payer insurance pool, though well designed, regulated insurance markets would still be an improvement. That still doesn’t prevent people from making frivolous claims, but these can be reduced by focusing insurance (risk sharing) on preventative and catastrophic care and where there is a strong public health benefit (e.g., preventing/treating communicable diseases).

[bannorhill]

Then change the system. Don't allow insurance companies to cancel for any reason other than fradulent claims or non-payment of bills. Allow people with pre-existing conditions to move freely from similar plans. Free movement will decrease illegitimatly denied claims because insurers would lose payers.

As for admitting new people with pre-existing conditions, that could bankrupt the system. Is it fair for someone who finds he needs a $200,000 triple bypass to be able to pay one payment and get the surgery for almost nothing. That is like being able to pick the Lotto numbers AFTER the winners are broadcast. He steals $200,000 from the pot of everyone else who bought insurance BEFORE they needed it. That is not fair to the existing policy holders.

[seatea1967]

"I wrote the president an email and all I got was a form letter in return."

Shocking.

[WilliamProc]

The problem that I have with your idea is simple.

Like the Auto industry, if the product offered is shoddy, broken, and exorbitanly priced, it probably wont sell. That is the health insurance industry today.

Its product is shoddy-with too many loopholes that favor the insurer and not the customer.
Broken- it doesn't cover everyone, and the industry admits that they don't wan't to cover everyone. They actually want to control who is served and who isn't, in spite of it's paying customers. Why should you pay for a service that the company wont let you use.
Price- the insurance price point has gotten beyond the reach of many. Insurance eats almost a third of my check, and were my premiums to increase, I couldn't afford it, as many Americans now can't Choosing between health insurance and food and shelter is a no-brainer. Remember that the un-employed don't buy cars, houses and health insurance, because of that employment thing.

Thanks for thinking about the issue though. At least you are expousing ideas opposed to rhetoric.

[Henryk A. Kowalczyk - Huffpost Blogger]

Why insurance companies offer shoddy and exorbitantly priced products? Because they can. They are one of the tightest regulated businesses, as your government cares for you. After all, health care is important. In result, health insurance industry became a quasi monopoly, entangled with the government. Simultaneously, they enjoy both, the power of wealth of the private industry and the political strength of the government, as government is the largest client, paying for 46% of all health care in the country.

Consequently, they spend a fortune (BTW, money they got by overcharging the government at the first place) for lobbying in Washington, with one single purpose, more government regulations protecting them form potential competition. Just in the second quarter this year, they spent $133,271,6­60.00, http://www.truthout.org/080109Z , for lobbying. I did not spend a dime. How much did you spend? Our interests in Washington are represented accordingly to these numbers.

We can have our interests protected only by the free market, as with the fewer government regulations, lobbyists can buy less influence.