The Hoboken Tax Reform Coalition

How to Reduce Health Care Costs.

The problem with healthcare in America is not that it’s bad or available, but rather the high cost that makes it unaffordable for 40 million Americans without it and more expensive for everyone else. The question is how do make healthcare more affordable for the 260 million Americans and employers and find a way to add at least 25 million more to the rolls without bankrupting overburdened taxpayers. If we chase the next marginal healthcare widget, costs will spiral upwards. We need to lower costs so we can afford charity care for the remainder. Here are 4 simple ideas that would cost a fraction of the bill in Congress.

1) Tort Reform- Texas and California have enacted tort reform reducing costs by 20%. If you pay $10,000 per year that would save him $2,000 over what he pays today. Additionally this will lower malpractice insurance for doctors. For patients this means doctors will no longer need to perform a myriad of expensive tests and procedures lowering costs further. This will lead to more doctors returning to NJ which has seen an out flow due to high taxes and ever higher malpractice insurance. Added benefit is that future John Edwards’ will not be able to build 20,000 square foot homes for their love children. Better quality and number of physicians will help people like Jack Dawkins who will also see his healthcare bill go down giving him more money to spend as he chooses. Doctors would concentrate on results not covering their butt.

2) Personal Health Savings Accounts- You will be able to place up to $5,000 per year ($10,000 for a family) on a pre-tax basis into his own account. If you are in the 30% tax bracket this is equivalent to $12,500 in cash, because it is a tax credit vs. a deduction. These two simple ideas would save 260 million Americans the equivalent of $10-15,000 ($20-25,000 for a family) per year on their current bills.

3) Competition- Instead of a federal behemoth why not let you buy insurance from any insurer from any state in the country? In NJ there are fewer insurance companies than say PA This due to 2 reasons. First NJ makes you offer every insurance available. Secondly I don’t need everything that NJ mandates. For example my industry offers a low cost health option but NJ is one a few states that won’t let them do it. If you could choose from 200 companies instead a couple of dozen think about how much more you would save.

4) High deductible Catastrophic Insurance- This would particularly help the 20-40 are demographic who I’m sure you do not want to see paying his health insurance, but that’s what the current bill does. This is most healthy age group and part of the subterfuge is to squeeze them. The above idea would make healthcare more affordable to this age group adding millions to the insured rolls.

This plan doesn’t do everything but makes health care much more affordable for 85% of Americans who have insurance. It leads to savings so that we have the ability to handle the 5-7% still left out. HUMC would receive 100% charity reimbursement under this plan without one more tax dollar spent.

1) Tort Reform- Although Jack disagrees Texas and California have enacted Tort reform reducing costs by 20%. If tony pays $10,000 per year that would save him $2,000 over what he pays today. Addidtionaly this will lower malpractice insurance for doctors. For the patient this means doctors will no longer need to perform a myriad of expensive tests and procedures to cover their butt. This will lead to more doctors returning to NJ which has seen a out flow due to high taxes and ever higher malpractice insurance. Added benefit is that future John Edwards will not be able to build their 20,000 sqaure foot homes for their love children. Better quality and number of physicians will help people like Jack Dawkins who will also see see his healthcare bill go down giving him more money to spend as he chooses.

2) Personal Health Savings Accounts- you will be able to place up to $5,000 per year on a pre-tax basis into his own account.

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Replies to This Discussion

Permalink Reply by Dave Kaplan on December 23, 2009 at 4:09pm: Scott,

I agree with you that there seem to be good ideas out there other than the current bill being proposed. What I have wondered, and have become frustrated with, is why none of these ideas (especially tort reform) were pushed from 2000 to 2006. The 109th Congress included significant majorities for Republicans, and yet no significant push was made to enact any of these ideas. Unfortunately, the 11th hour ideas are much too late in the game; ▶ Reply to This

Permalink Reply by scott m siegel on December 23, 2009 at 4:34pm: Dave-- The Republicans never had the 60 vote supermajority now enjoyed by the Democrats in the Senate. The House did pass it but it died via filibuster. Trial lawyers give generously to the Democrats. Of course the Republicans receive funding from opposite interests.; ▶ Reply to This

Permalink Reply by Tony Soares on December 23, 2009 at 8:34pm: As an unwilling example here Scott, I would like to ask, what do I do if I'm denied?
Besides, $5,000 in pre-taxed accounts has been offered in corporate sector as well and I found it an incredible waste. The problem with healthcare is Insurance companies control the legislation.; ▶ Reply to This

Permalink Reply by Tony Soares on December 23, 2009 at 11:59pm: Scott after further thought as well as a PRIVATE email to you, I request you delete this discussion or at least take me out of the equation, your assumptions as to my current healthcare is inaccurate as well as a total invasion of PRIVACY.

I have a disability called Achondroplasia, it's a form of dwarfism. I don't consider it a "malady"! (disease or ailment) you see I am not growing, nor is it contagious, so I await the deletion of my name from this fiction.; ▶ Reply to This

Permalink Reply by Dave Kaplan on December 28, 2009 at 11:15am: Scott,

I did realize that the Republicans never had a 60 vote majority. I also admit that I didn't really pay that much attention to this issue until the 2008 Election brought it to the forefront.

Perhaps that is part of the problem though. The case was never really made to the public in those years to explain why these changes should happen. Whether one agrees with the current bill (or any of the ideas that have been pushed in 2009), the Democrats have been very successful about communicating the reasons why they think that their version of reform should be implemented.

Perhaps it is my own fault for not paying attention, but I just don't recall any real PR push to enact these changes, and I think that there are probably a majority of people that would at least agree with tort reform. I think the average person would be quite angry to find out how much malpractice attorneys are making at the cost everyone who has health insurance.

Thanks for the response.

scott m siegel said:
Dave-- The Republicans never had the 60 vote supermajority now enjoyed by the Democrats in the Senate. The House did pass it but it died via filibuster. Trial lawyers give generously to the Democrats. Of course the Republicans receive funding from opposite interests.; ▶ Reply to This

Permalink Reply by Incognito Smith on December 28, 2009 at 1:47pm: While we are at it, in addition to tort reform, why not cut out the exorbitant insurance industry profits by totally eliminating them from the equation of health care. It’s no secret that out of $100 spend on health care the insurance industry pockets $80. It’s no secret that the mortality rate is much higher in our insurance industry controlled health care system where insurance executives are constantly maximizing their profits than in countries with universal health care where doctors and patients make the health care decisions.; ▶ Reply to This

Permalink Reply by scott m siegel on December 28, 2009 at 2:23pm: Incognito Smith:
I think that interstate competition would lessen the fees. Health Insurers rank between 25-35 in industry profitability. Most people would think they are in the top 5.; ▶ Reply to This

Permalink Reply by Incognito Smith on December 28, 2009 at 3:03pm: Scott,
You can’t have real health care reform while keeping the health insurance industry in place. That’s admitting that they are essential in the health care equation and that’s just not true. We don’t need insurance executives that know nothing about health care telling our doctors and hospitals what’s good or bad for the patient. It’s not the doctors, hospitals, and the patients that are bankrupting the system. It’s the health insurance industry that exists to divert health care dollars to line their deep pockets which in turn increases the national deficit. The way things are now with the senate and the house bills we will be back again in four years to do what we failed to do this time which is to ELIMINATE the insurance industry from the equation of health care. They must be eliminated or else we will pay dearly to continue to line their pockets.

scott m siegel said:
Incognito Smith:
I think that interstate competition would lessen the fees. Health Insurers rank between 25-35 in industry profitability. Most people would think they are in the top 5.; ▶ Reply to This

Permalink Reply by scott m siegel on December 28, 2009 at 3:16pm: Incognito Smith: Did you know that Medicare rejects more procedures than private health care? Ask HUMC about how they get reimbursed by the feds (65-70%) vs. private insurance. An example: My dad was in a nursing home for 2 years. If private insurers were so bad why is that the only a resident with private insurance could get in? If you have only Medicare you are not allowed to be admitted. In fact the ward was 1/2 empty rather than accept federal dollars. Also 50% of doctors only take cash or private insurance. If private insurance is so bad how why is this the situation?; ▶ Reply to This

Permalink Reply by Incognito Smith on December 28, 2009 at 3:33pm: Scott,
Here is what I know. A few years back the insurance industry through their heavy handed lobbying were able to tap into the Medicare program and come up with these HMOs run by them with names like Medicare Advantage, etc. In the process the Medicare program as it existed before was completely transformed into one controlled by the for profit insurance industry. I assure you that today the Medicare program as it existed in the past no longer makes those decisions you mention. Those decisions are being made by the insurance industry running the Medicare Advantage HMOs. That is the principal reason why the program is in financial trouble. I don’t really know about the Hoboken hospital but we all know about the many hospitals in NJ that have been fighting these insurance industry run Medicare Advantage HMOs because they don’t want to pay a fair share for the services which causes a strain in the hospital operating costs while at the same time maximize the insurance industry profits. I don’t have to tell you this because it’s well documented the majority of doctors in this country want the insurance industry completely eliminated. As to the nursing home not accepting Medicare patients... that’s hard to believe or perhaps they have contracts with the insurance industry Medicare Advantage HMOs that preclude them from accepting regular Medicare patients.

scott m siegel said:
Incognito Smith: Did you know that Medicare rejects more procedures than private health care? Ask HUMC about how they get reimbursed by the feds (65-70%) vs. private insurance. An example: My dad was in a nursing home for 2 years. If private insurers were so bad why is that the only a resident with private insurance could get in? If you have only Medicare you are not allowed to be admitted. In fact the ward was 1/2 empty rather than accept federal dollars. Also 50% of doctors only take cash or private insurance. If private insurance is so bad how can you explain these facts?; ▶ Reply to This

Permalink Reply by scott m siegel on December 29, 2009 at 4:13pm: Incognito; From what I understand Medicare Advantage relates to The Prescription Part D plan designed by the Bush administration. I don't think it covers general health care which is the 800 pound gorilla. Medicare was projected to cost us $12 billion today, but actually costs $110 billion. Medicade was projected at $1 billion and costs $12 billion. Only Medicare Part D is under budget projections, probably because it is run by private industry and not the government. My mom used to import her drugs from Canada. Despite the doom and gloom from the people she votes for (Democrats) I urged her to find out for herself. She now uses Part D and is very satisfied. I'll get you the phone number of the nursing home. Call them and report back whatever you find out.; ▶ Reply to This

Permalink Reply by Incognito Smith on January 13, 2010 at 8:41pm: Scott,

I’d like to revive this thread again. Your original post asks How to reduce Health Care costs. I have tried to make the point that we are doomed to failure if we continue to allow the health insurance industry to take over the Medicare program. Through their heavy handed and costly lobbying in Congress they have managed to gain control of almost all of the ORIGINAL MEDICARE participants and they now have managed to take over their Medicare Part D benefit as well. They now group them into HMOs that manage all three parts A, B, and D, like Medicare Advantage that for every $100 that they bill the Medicare program they pocket $80 for their executives and stock holders and shortchange the patients, the doctors, the hospitals, etc. with the $20 remaining. This is the reason why Medicare is going broke. I am going to say it again. The reason Medicare is going broke is because of the waste of health care dollars going into the pockets of health insurance executives and stock holders.

For your information Medicare Advantage and many other health insurance HMOs that manage Medicare participants do group the three parts of the Medicare program, Parts A, B, and D. The participants have the option of opting for the ORIGINAL MEDICARE that would manage their Parts A and B but they must now select a PRESCRIPTION DRUG PLAN that’s administered by various insurance companies. I am familiar with the MEDCO MEDICARE PRESCRIPTION PLAN because we just enrolled my mother in law back into the ORIGINAL MEDICARE and selected the Medco PDP for her medications.

She had lots of problems with UnitedHealth AmeriChoice which was managing her 3 parts of Medicare and we couldn’t get out of it fast enough until the recent enrolling period.

scott m siegel said:
Incognito; From what I understand Medicare Advantage relates to The Prescription Part D plan designed by the Bush administration. I don't think it covers general health care which is the 800 pound gorilla. Medicare was projected to cost us $12 billion today, but actually costs $110 billion. Medicade was projected at $1 billion and costs $12 billion. Only Medicare Part D is under budget projections, probably because it is run by private industry and not the government. My mom used to import her drugs from Canada. Despite the doom and gloom from the people she votes for (Democrats) I urged her to find out for herself. She now uses Part D and is very satisfied. I'll get you the phone number of the nursing home. Call them and report back whatever you find out.; ▶ Reply to This