Letter to Bannon
July 9, 2017
Dear Mr. Bannon:
Obamacare repeal is struggling, but I guess we are still trying. I think the basic problem is that Republicans dont seem to have any idea of what they are for, and so making tradeoffs is hard. The primary focus seems to be on being covered by insurance, not on reducing the total cost of healthcare. I would like to help by giving you a datapoint on what we out here in the real world are thinking, and hopefully that will give you and Congress and President Trump something to focus on.
First, I am very worried that repeal of the individual mandate might not happen. I watched President Trump sign the executive order telling the IRS to go slow on enforcing the penalty. So I swore off signing up for Obamacare, trusting the the President to deliver repeal. I know a lot of us did just that, and if the repeal does not happen we are in for some serious financial trouble with the IRS next year. Doing things by executive order is convenient, but can be very costly for the people affected if the order is negated, and is creating a country ruled by a king rather than one ruled by law.
Now - let me tell you why I swore off Obamacare this year.
Insurance is for people who have enough income to pay the premiums, and have some money they want to protect from the costs of a major illness. For many of us this basic premise of insurance is basically not true - we dont have much wealth to protect - and certainly we all reject being forced to bankrupt ourselves, and risk starvation, exposure, and/or death merely to comply with an insane law and pay for premiums - especially when the payments are for something that does not actually work. Our income is above the limit where we can get premium assistance, but has barely enough room to provide for what we need to live. Survival (and a sense of self worth) comes first, and taking the risk of not being covered is acceptable, given the cost of being covered. With the current Obamacare bronze plans, before insurance pays a cent, I have to come up with $12000/year for healthcare premiums and deductibles - which is a huge fraction of $45000/year. Pre-Obamacare this out of pocket limit could be around $6000.
Then, because the profits of the insurance company have to be paid, using insurance for regular basic healthcare is always a more costly method of providing healthcare. If you cannot walk away from something because it is "too expensive", then that something will become more expensive than it needs to be. All the goodies tacked on to "required coverage" in Obamacare has added approximately $6000 to the out of pocket cost per person for healthcare. Even if I did not pay for it, somebody is going to be paying for it - either me, my employer, or the government. Just think - $6000*250,000,000 people = $1.5 trillion - that is the drag Obamacare is adding to our economy! So the insurance mandate has to go, as well as the enforced goodies in Obamacare, and insurance should NOT be the focus of any health care law.
What we really need is some way of reducing costs, to the point where most people can cover their basic needs out of their own pockets. I think most people have the sense to recognize there are benefits to being rich, even in healthcare, but expect some basic things to be affordable - without assistance.
Medicine is getting to the point where we can probably extend a life indefinitely if we put in enough resources. But of course we cant do that for everyone, and it might not be a life worth living. Congress really does need to decide how much our society deems a person is worth - how much we are willing to pay as a society to bring back a person to health - to life - and also EXACTLY where we stop and let the people who care about a person decide whether to continue to spend money to keep their loved one alive. Saying exactly where we as a society stop is important to the family of a person needing health care, it tells them approximately where THEY can stop and not be "bad people". Congress needs to define a percentage of GDP that is acceptable and/or excessive for the health care costs of society (10%??). Congress then needs to define what is "basic health care" - what everybody needs, and not include the "kitchen sink". This will change as technology pushes down the cost curve; if you have a percentage, you have a basis for deciding what is "basic" and what qualifies as part of the "kitchen sink". We actually have a lot of this already decided right now - but spread out amongst various departments for different purposes. We elected a President who is unafraid to speak about uncomfortable things, and we need him to provide cover for Congress to have the discussion and make the decision and put it into law - by saying such things.
Once that has been decided, we need to make sure that basic health care is available to everybody. Emergency care to stabilize and rescue a person is important, and we already have laws about that. Access to a general practitioner(GP) at a reasonable cost for basic preventative and maintenance needs and prescriptions is also important. We could make medical care in remote locations more available by offering medical students the option of paying off their student loans by serving at federally determined locations as a GP for 5-10 years after they graduate. We could make contributing to a HSA open to anybody - no insurance plan required or disqualifying - so they can set aside money for future health care without needing insurance. We could limit collection of charges for any procedure when there has been no prenegotiation of rates at least one month before the procedure to the Medicaid rate - and support plans that offer prenegotiation only, not insurance.
I hope these thoughts were helpful, I wish you the best, and if I can help you in any away in the next few years please let me know.