FAQs about other health care legislation
Click on a question below to view the answer.
- Why is the MN Health Plan better than an insurance mandate?
- Why not wait for Congress to fix the problem?
- Why not use tax subsidies to help the uninsured buy health insurance?
- Why not Health Savings Accounts?
- Don't we need tort reform, malpractice is driving up the cost of care?
Why is the MN Health Plan better than an insurance mandate?
The fundamental problem that has prompted reform is the rapidly rising cost of our current insurance-based system. "Universal" care through the mandated purchase of insurance does nothing to reduce costs; rather it bloats the system with more dollars to provide coverage to everyone.
Proponents of an insurance-based system with mandated purchase propose to keep insurance plans affordable by using a basic "benefits set."
The MHP would provide comprehensive coverage for all, using the administrative savings inherent in the single system. Medicare, which is somewhat comparable in that it is a single plan for seniors, has administrative costs of under 3% of revenues, compared to insurance plans which typically have administrative costs of at least 15%.
Because the insurance-based system uses plans that do not have comprehensive benefits, they cannot accurately claim to cover people whose medical needs are not in the benefit set. For example if your medical needs are for dental work and your insurance plan excludes dental, or if the co-pays or deductibles are unaffordable, you do not have the health care that you need, despite having health insurance.
Also, as with Minnesota's auto insurance mandate, there are still many people who do not buy it because they cannot afford it - it is not universal despite the law mandating it.
Finally, when there are multiple health plans, there will always be gaps in coverage during transitions between plans. If an employee with benefits loses their job and cannot afford COBRA, or the COBRA coverage runs out, or they lose coverage through divorce or aging out of their parents plan, there is a gap. And in a state of five million people, there will be thousands of people who get sick or injured during these gaps in coverage. Even if the state mandates that everyone buy insurance, they will not achieve universal coverage.
Why not wait for Congress to fix the problem?
We would be thrilled to have the U.S. government fix our health care system, but that desire can't defer working on a solution that would address the pressing health care crisis in MN. Passage of single-payer universal coverage in individual states could serve as a stepping-stone to a national solution. If we demonstrate that we can control costs and provide universal health care coverage, efforts on a national level will be more successful. A single-payer plan such as The Minnesota Health Plan is the way to seriously address cost containment and cover all residents.
The proposals under consideration at the national level will expand coverage to a large proportion of the currently uninsured, however they are unlikely bring down costs significantly, ensure universal care, or give access to comprehensive health care services.
Why not use tax subsidies to help the uninsured buy health insurance?
Tax subsidies do not fix any of the causes of the health care mess. They do not reduce costs or address the inefficiencies or administrative waste that takes dollars away from patient care. They simply shift the costs of the system.
Even with tax subsidies for a "basic benefit-set", moderate- and lower-income individuals would be unable to afford good coverage, leaving them with modest benefits and high deductibles making health care unaffordable. The costs of unpaid medical bills due to inadequate coverage would continue to be transferred to those with adequate coverage.
Why not Health Savings Accounts?
Like the tax subsidies mentioned above, Health Savings Accounts do not fix any of the causes of the health care mess. They do not reduce costs or address the inefficiencies or administrative waste that takes dollars away from patient care. If anything, they exacerbate the problem by taking affluent and healthy people out of the insurance pool and leaving the sick, elderly and low income people, thus driving up the price of insurance.
HSAs are individually owned pre-tax accounts used to pay medical expenses. Once the HSA account is depleted and a deductible is met, medical expenses are covered by a "catastrophic" insurance plan (also known as low-cost, high-deductible plans). Healthy individuals tend to be attracted to HSAs, while older, less healthy individuals need more complete benefits. When sicker people are concentrated in the traditional plans because healthier ones opt for HSAs, the cost of premiums rises dramatically. An obvious example of the inequality of HSAs, are that they shift more of the burden to women, whose health care costs average about $1000 more than men. In effect, HSAs move healthier people out of the insurance pool, driving up the cost of health insurance for everyone else, causing a sharp increase in the number of people without any insurance.
Finally, HSAs discourage preventive care - people avoid seeking needed care if they have to pay for it out of a limited account. They defer care that isn't urgent.
Don't we need tort reform, malpractice is driving up the cost of care?
Malpractice reform isn't the magic bullet that proponents claim. The Congressional Budget Office concludes that limiting malpractice liability would only lower total health care spending by 0.5%. That figure includes a 0.2 percent reduction from lower premiums for malpractice insurance paid by medical professionals, and it includes an additional 0.3 percent in reduced costs of medical tests, imaging and other medical services for the practice of "defensive medicine".
About half of all malpractice awards go to pay present and future medical costs. If everyone had continuous, comprehensive coverage, the incidence of malpractice suits would go down. Second, many claims stem from a lack of communication between doctor and patient (for example in the Emergency Department). Miscommunication and mistakes are increased in our current system because physicians don't have continuity of care with their patients. They are less likely to know a patient's medical history or to establish therapeutic trust because of changes in insurance coverage and choice-limiting provider networks. Under a single-payer system all providers are in the "network", patients can stay with the providers they know and trust and who know their medical history.