State-based Health Care Reform Solutions
I’ve heard this week some suggestions that having the individual states administer reforms to provide improved health care might be a better way to accomplish what is needed. Paul McKinley, Senate Minority Leader and candidate for the Republican nomination for Iowa Governor, released one of his insightful memos today on this very topic.
“Iowans are overwhelmingly in favor of making health care more affordable, accessible and portable. Most Iowans are also happy with their health care coverage, they just want their elected officials to institute some reasonable and responsible market-based revisions to the current system to make health care less expensive, more accessible and more portable.
“The direction some in Washington D.C. want to pursue will not make health care more affordable, accessible or portable and instead amounts to a government take over of nearly one-fifth of the country’s economy. Instead of empowering patients and physicians, the direction D.C. is headed will strip away personal liberties and empower government bureaucrats. Now is not the time to throw out the entire system we utilize today and replace with an expensive, rigid and confusing bureaucrat controlled government takeover. The plans being discussed in Washington would add hundreds of billions in debt and do nothing to improve affordability, accessibility or portability.
“Instead, Iowa Senate Republicans are proposing a set of initiatives and reforms that can be implemented at a state level within the market-based health care system already in place. They are carefully crafted to make health care in Iowa more affordable, more accessible and more portable.
“First, Iowa Republicans propose to establish a statewide online information hub that brings together both cost and outcome quality data in a searchable format for consumers. We believe the information age provides a tremendous opportunity to compare cost and quality in the delivery of health care services. Competition and comparisons save employers, families and individuals money.
“Younger Iowans in the 18-30 age, given their relative age and better health, often do not make purchasing health insurance a high priority. As a result, when they do have to seek medical treatment it is often for a serious condition and therefore very expensive. In fact, there are 106,000 Iowans in this age group who do not have health insurance and account for roughly half of all the uninsured in the entire state. Therefore, Senate Republicans propose legislation that will encourage the development of low cost market-based catastrophic insurance products that will provide base care for younger Iowans.
“Third, no serious attempt at reducing rising health care and insurance costs can move forward without an honest attempt to address the issue of medical malpractice reform. We have continually championed the need to pass legislation that raises the burden of proof for malpractice claims and places reasonable limits on payment for damages. Those hefty costs are passed on to consumers like you.
“Next, current law allows large employers the opportunity to deduct health care costs “above the line†– meaning a dollar for dollar reduction in their taxable income equal to the employer share of health insurance costs. This is a tremendous incentive for employers to provide health insurance to their employees. Thus, it should be no surprise an independent study shows 94 percent of employers who have 50 or more employees provide health insurance, whereas 36 percent of employers who have 10 or fewer employees only offer health benefits.
“Because a significant portion of our population now work for small businesses or for themselves, we believe such “above the line†deductions for health insurance costs should be extended to all businesses and individuals. Some estimates suggest an above the line deduction for health insurance costs may provide a 30 percent savings on such costs and provide a significant incentive to offer health insurance benefits to their employees. If it’s good enough for Wall Street, it ought to be good enough for Main Street.
“Prevention programs that encourage long-term commitment to wellness practices are proven to reduce demand for expensive health services and curb future growth in health care spending. However, our current system chooses to focus on imposing penalties on those who practice less healthy lifestyle through higher insurance rates rather than rewarding good health practices with lower rates.
“Consequently, we propose legislation to encourage insurers to offer “prevention credits†to individuals and businesses that can be used to reduce health insurance rates for those that demonstrate a commitment to wellness and prevention. “Prevention credits†will allow an average Iowa family to save upwards of 15 percent on their health insurance premium or $1,635 on an average family policy. According to the United States Department of Health and Human Services there is a return on investment of up to $4.91 for every dollar spent on wellness.
“Finally, we favor a bill that prohibits the denial of coverage for pre-existing conditions if you change policies within a health insurance company. Simply changing policies within a company does not mean you should lose your coverage if you have a pre-existing condition.
“I know we can make a real difference in lowering the cost of health care without turning our entire health care system and a large segment of our economy over to the government. We must utilize common sense reforms that can be done right here in Iowa. We can be a leader in showing the rest of the country how to achieve market based health care reforms that make health care more affordable, accessible and portable without adding hundreds of billions in generational debt and putting the government in charge of our health care.
 “As always, I welcome hearing from you and can be reached by phone at 515-281-3560 or by e-mail at [email protected].”
I think there is a lot to be said for focusing many of these efforts at a state level instead of federal. Some states, like Florida, have implemented some tremendous solutions to help reduce costs and ensure that patients help participate in controlling those costs. In some cases, both the challenges and solutions may more regionally specific and better solved regionally.
One area that will likely require some federal oversight will be cross-state portability. Some states might be resistant to such portability (and admittedly, due to influence by Insurance Lobbiests), but it would still be beneficial to make this a joint effort between the states under the herding of Congress.
I like where Iowa Republican leadership is headed.
