Medical Cash for Clunkers: Rejuvination on the way?

Posted on Aug 07, 2009 by Sergio Ulloa (G+)  | Tags: Healthcare, insurance, Medical, obama, Reform, USA

The hot topic currently dominating American news headlines is President Obama's proposed healthcare reforms, and with both Congress and the Senate on their August recess until September 8^th speculation is running rampant as to what actions, if any, will be implemented by the proposed House Healthcare Bill titled "America's Affordable Health Choices Act of 2009". There has been much argument on both sides of the political arena as to the need of such an act, and the need for reform. However, with so much spin flying left and right it is understandable that the average American might be slightly confused about the facts. As promised in our last post, we are here to try and dig through the deluge of misinformation and try to enlighten you as to the truth of healthcare reform in modern America.

By now it should come as no surprise that the USA has the highest average medical costs in the world, and that the leading cause of bankruptcy in America is due to an inability to pay for incurred medical expenses. With those two facts alone it should be evident that the healthcare system employed by the country is woefully inadequate. Add to this mix an extremely confusing mash of insurance legislation (HIPAA and COBRA to name just two examples), an under regulated insurance industry, as well as a raft of often contradictory state laws, and any rational individual will immediately come to the conclusion that change, any change, is necessary.

Step forward President Obama.

It is not news that even as a Senator, Obama was keen to implement changes to a necrotic, decrepit, and rapidly deteriorating medical system. As we mentioned in our June 18, 2008 post however, he planned to accomplish a rejuvenation of the system primarily by forcing the extinction of paper as a medium to convey patient information and medical records. The paperless healthcare system is still a primary goal for the now president, but a wider range of initiatives are potentially on the books.  The goals of the Obama administration reforms include, among other things:

 

?  Reduce long-term growth of health care costs for businesses and government

?  Protect families from bankruptcy or debt because of health care costs

?  Guarantee choice of doctors and health plans

?  Invest in prevention and wellness 

?  Improve patient safety and quality of care

?  Assure affordable, quality health coverage for all Americans

?  Maintain coverage when you change or lose your job

?  End barriers to coverage for people with pre-existing medical conditions

 

It would seem that these objectives are relatively straight forwards, full of common sense, and indeed necessary to revitalize the system and ensure that American citizens are no longer beholden to the insurance organizations "protecting their health". However, as always in the USA, there is a larger problem at hand - the inherent fear of anything even remotely resembling a universal healthcare system.

Let's be quite clear on one thing, the reforms are not meant to establish a universal healthcare system. Yes, there has been debate on the subject, but the reality is that, due to the very makeup of the US political system any Bill or Legislation that aims to create an NHS style healthcare network would fail miserably (remember that both the Senate and Congress must pass a bill in order for it to become law). The Republicans would scream bloody murder at the merest hint of such reform, and the more fiscally conservative Democrats would be none too pleased either.

No, Obama's current objective is to create an equal playing field for all Americans to receive comprehensive healthcare coverage (whether received by a private health insurance company or through a government run program like Medicare or Medicaid), and ensure that should they loose their job, or suffer a major illness, the coverage will not cease. In addition to this, the President has placed a large emphasis on the ability of the American consumer to choose their healthcare plan. If the goal was to institute a universal healthcare system, it would be a case of "one plan fits all", by clearly stating that his aim is to give the consumer freedom of choice when it comes to their medical protection, the President has given us a great deal of insight to his driving force - let the market be free and active, but also competitive and fair. The idea here being that the insurance companies offering the best coverage conditions will thrive, while those that impose hefty exclusions, automatically large deductibles or excesses, and engage in the dubious practice of recision will fail. 

However, as part of the usual everyday politicization that occurs in the USA this has not been made terribly clear to the American consumer. As part of the August recesses, Politicians have been returning to their districts to try and gauge the public perception of healthcare reform in a number of mini "town hall" style meetings. This would usually be viewed positively, and lead to engaged debate on the merits of such legislation. Not in this instance.

Town hall meetings across the USA have seen large confrontations between the proponents of healthcare reform, and critics of the same. In most cases the disruptions to these meetings could be compared to the senseless noise generated by fans of Stephanie Meyer's Twilight books - petulant, unneeded, and extremely counter productive. More to the point, these confrontations are typically being based on faulty information, such as the instance in Texas where a number of senior citizens were adamant that they were opposed to any form of government run healthcare, even though the vast majority are already enrolled in Medicare or Medicaid programs. One can only assume that they were too busy watching Discovery Channel's Shark Week programming, or listening to Eminem's new album to research the subject properly. 

The objective of reforming the healthcare system in the United States is commendable. However, as mentioned above the chief problem lays in the fact that medical costs in the USA are grossly out of proportion to the ability of the populace to afford treatment. This is not the fault of insurance, but rather the facilities providing healthcare services. While the insurance system may not be perfect it is the gross price gouging by hospitals and doctors that has forced American insurance organizations to raise premiums skyward and engaged in suspicious cost cutting practices. Create a means of regulating actual healthcare costs (as opposed to insurance costs) and half the battle will be won.

In addition to this, the American health insurance industry stands to learn a thing or two from current "best practice" as it exists in the international marketplace. Current international health insurance plans will automatically allow a policyholder to visit the hospital or doctor of their choice, anywhere in the world - which is quite a big step up from freedom of choice in your home town. Guaranteed renewals, self selected deductibles, very high coverage limits, and a range of other standard benefits make global health insurance a radically different product to the insurance options currently available in the USA, and at the end of the day President Obama's reforms really only emulate that which is standard in the international community.   

Here at International Insurance News we believe in giving the consumer all the information that they need to make an informed decision. Any reforms which would see coverage improved and extended cannot help but make for a better product, at the end of the day it will encourage healthy competition and eliminate bad business practices. But it is the American consumer who will need to be vocal on the issue and see beyond politicized fabrication by special interest groups.

All this huffing and puffing and there hasn't even been a vote yet. It will be interesting to see what happens in the coming weeks, and as always, we will keep you updated.