Universal Health Care with a Conservative Twist

On multiple occasions recently, Charles Krauthammer has observed that since the passing of Obamacare, a consensus has emerged in America that government should guarantee that all Americans be covered by health insurance. Obamacare, however, doesn't cover all Americans; the ACA itself even grants exemptions to its mandates. And then there are those who would rather pay the tax/penalty than pay insurance premiums. Also, many Americans are too just busy ruining their health to be bothered with procuring health insurance. In all, Americans who have neither public nor private health insurance number more than 28 million.

Dr. Krauthammer predicts that within a few years, America will end up with a universal health care system, perhaps even the dread "socialized medicine," i.e. "single-payer," where the government runs the whole shebang. But America already has a universal health care system, the one provided by hospital emergency rooms under the EMTALA law. The services received in emergency rooms are not supposed to be free; they just end up being free. Hospitals actually charge the users of their ERs, but they're often not successful in getting paid. Consequently, hospitals write off the losses run up in their ERs as "bad debt."

Bad debt has been a problem in the medical system for decades. But recently it's taken on a new wrinkle as folks with Obamacare insurance policies find that they cannot pay for their hefty deductibles and copays. So the health care system is getting hit by deadbeats from both the uninsured and the insured.

The way the health care system deals with all the bad debt is "cost-shifting"; they shift the cost of uncompensated care to paying customers as higher prices. A question arises: do those costs get shifted evenly, or is one group of health care users hit harder than the others?

You can be sure that government programs aren't going to receive the brunt of the cost shifts that make up for bad debt losses. Medicaid and Medicare "dictate" what they pay, (which just adds to the cost-shifting problem). Private group insurance plans that cover employees and associations negotiate what they pay for services. Sammie Mack explains how negotiated deals hide the costs of health care; seems there's a whole lot of deal making going on. So we're left with individuals: those who purchase health insurance in the individual market, i.e. the exchanges, and those who pay out-of-pocket, who get disproportionately hit by the cost-shifting due to bad debt.

The solution to unfair cost-shifting is simple: require all health care providers (doctors, hospitals, drug companies, etc.) to charge the same prices to all payers; e.g. Medicaid would pay the same price for a coronary bypass operation as would an insurance company, or an individual footing the bill with her own funds. The solution to the problem of bad debt, however, may be a bit more difficult. But shouldn't everyone who uses the health care system be held responsible for their medical bills?

If America is careening toward a universal health care system, Republicans should be trying to figure out a way for the new system to have some conservative features. Consider this reform: medical bills that are not paid off in their entirety within the usual time frame (usually a month or so) would be turned over to the federal government which would pay health care providers, and then the feds would bill the patients until they paid the feds back, even if that takes decades. This repayment system would be akin to but sterner than the one for government-backed student loans, which are occasionally forgiven. Under the reform, debt incurred in America's medical system would never be forgiven.

This reform puts the government in charge of bad debt; it shifts bad debt over to the taxpayer. It is a solution for the hole in EMTALA's debt collection mess, a situation created by Congress. It's a fix for uncompensated care, another situation created by Congress. But the feds already have a collection agency that could do this easily. In fact, this agency is already being used to enforce compliance with Obamacare – it's our beloved IRS.

What we'd be doing here is extending the time over which a person can pay off their debt. The thought that the IRS will be dunning you till the end of time, increasing your W-4 income tax withholding, seizing your income tax refunds, perhaps seizing your estate (sorry kids), etc. should focus the mind more than the Obamacare penalty for noncompliance ever would.

Of course, those Americans who can't pay, won't pay. But those who do work, who strive for the American Dream, who save and intend on sending their kids to college, will be struck by one sobering feature of the reform: without insurance they'll be stuck with paying for the entirety of their medical bills, and that debt will stay with them until they pay it off. So the reform would be a huge incentive to buy private health insurance. The whole idea behind real insurance is so that one doesn't have to pay the full price for expensive and unexpected calamities; one pays a little so that one doesn't have to pay a lot. Indeed, for healthy Americans, insurance premiums are a loss. But one accepts a small loss so that one won't be stuck with a huge loss.

But under Obamacare, health insurance premiums aren't a "small loss." That's because Obamacare covers so many routine, expected expenses, like birth control. Under Obamacare, you don't pay for birth control, but you do get slapped upside the head with deductibles and copays if you use it for something catastrophic. Hence: more cost-shifting.

Republicans should bite the bullet in their replacement plan and simply guarantee that health care providers will be paid. That would fix the problem in EMTALA. Indeed, Congress could repeal EMTALA. That law is a constitutional mess anyway, as it has the same kind of blackmail feature as Obamacare has: if you don't play ball with feds, you lose your federal monies under preexisting arrangements. That was what was struck down in NFIB v. Sebelius; the high court didn't allow Congress to withhold Medicaid funds if the states didn't agree to expand Medicaid. So EMTALA needs to be nixed, and ERs need to be reserved for actual emergencies.

Perhaps the biggest stumbling block to repealing and replacing the "disaster known as Obamacare" is what to do about so-called "preexisting conditions." Because so many of the pathologies of the American health care system were caused by the federal government, the feds need to embrace covering the bulk of Americans with preexisting conditions.

On May 3, I heard a bit of El Rushbo on the radio, and went to his website to read the rest of "The Truth About Health Insurance and Preexisting Conditions": "If you know what insurance is, I mean what the business plan, the model [is], then you would know automatically and instinctively that people with preexisting conditions cannot possibly be insured." Dr. Rush reports (italics added):

The new House bill sets up a $130 billion pot of money federally funded, I don't quite know how, but it's $130 billion federally funded to pay for people with preexisting conditions. The whole nation chips in, not just people stuck in the individual market … the plan, essentially, is to segregate them out of the insurance market. We'll still call 'em insurance. But keep preexisting conditions separate so that their inclusion doesn't blow up the insurance business model pricing mechanism and everything else.

In other words, let taxpayers pay for preexisting conditions, not (primarily) the individuals who shop at the exchanges or who pay out-of-pocket. However, as Rush points out, such patients represent only "4 percent of the population." (Anyone who still thinks Obamacare represents some model of real insurance or good governance needs to read Rush's radio transcript.)

If Dr. Krauthammer is correct, and we are indeed headed toward a universal health care system, then Republicans need to beat the Dems to the finish line so they can put their own imprint on that new system, and maybe even beat the Democrats in the "compassion sweepstakes" of the 2018 elections. It's not health insurance that people need; it's health care. By guaranteeing that the medical bills of the uninsured will be paid, Republicans would be instituting a de facto universal system. And unlike Obamacare it would not omit 28 million Americans.

Jon N. Hall of Ultracon Opinion is a programmer/analyst from Kansas City. 

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