Sunday, November 01, 2009

Once More Into The Affordability Breech, Dear Friends

If I'm going to bitch about every health care reform plan that comes out of Congress, I suppose I'd better explain what I think affordability means. It does not mean 10% of one's income for premiums, and it does not mean another 10% in deductibles and out of pockets before one's insurance actually begins doing what you have been paying it to do.

With regard to expanding utilization of current programs:
  • First, Medicare drops to cover everyone 40 years old and older. Age discrimination law protects all those over 40, and many illnesses begin to manifest after this age, so this seems a good starting point.
  • For those under 30, the option to stay on their parents' or guardians' insurance.
  • For the low-income, Medicaid up to an income of $25000, no matter the size of the family.
Regarding the cost of insurance premiums for everyone who doesn't fall into the above categories, no more than the following % of income, on a sliding scale:
$25,999—1% ($260 yr, $22 mo)

$30,000---2% ($600 yr, $50 mo)

$70,000---3% ($800 yr, $67 mo)

$100,000—3 ½ % ($3500 yr, $292 mo)

$150,000---4% ($6000 yr, $500 mo)

$200,000---5% ($10,000 yr, $833 mo)

$250,000---6% ($15,000 yr, $1250 mo)

$300,000---7% ($21,000 yr, $1750 mo)

$400,000---8% ($32,000 yr, $2667 mo)

$500,000---9% ($45,000 yr, $3750 mo)

$1 million and up---10% ($100,000 yr, $10,000 mo)
The excess amount charged to those in the higher income categories can be used to underwrite the costs of insuring those in the lower-income brackets.

What the above chart tells you is that:
1)  No insurance company, no matter how venal, is ever going to charge $100k a year for a family's insurance. This means that the rich will always be at advantage over the poor when it comes to paying premiums. If you found yourself looking at that chunk of the millionaires' share and thinking, “Wow! That's a little steep!”, just imagine how more more cruel that 10% will be on the backs of those with only a fraction of that income; and

2)  Even a small percentage, taken from a limited income, is going to weigh heavily on that family or individual in ways that could break them if other expenses are not taken into consideration.
Deductibles and out of pocket cost limits should be minimal, rare, and for very extraordinary situations; say, cosmetic surgery for purely vanity reasons. For those paying 1% of their income for premiums, they should not exceed the cost of those yearly premiums. For those paying 3-6%, they should not exceed twice the cost of those yearly premiums.

The regulations allowing direct-to-consumer advertising of prescription pharmaceuticals should be eliminated, to cut down on the costs of those drugs ( % of drug company costs are related to advertising and marketing) and reduce patient demand for drugs that may not be appropriate or advisable for their situations.

Accountability should be created by requiring insurance companies to provide regular yearly financial statements to their customers showing where their profits are coming from and where they are going, including top executive salaries and all political contributions and PAC connections.

No this isn't meant to be comprehensive, but it give you an idea of where I'm coming from.

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