As we sit here on March 11, 2020, one of the saddest things about the apparent victory of Joe Biden over Bernie Sanders is the realization that Medicare for All may not become law. This isn’t to say that Biden wants no change in the Affordable Care Act. But his changes fail to eliminate two major problems with the ACA. First, that multiple insurance companies are involved, thereby causing enormous administrative expenses for doctors and hospitals. “The average American spent $933 in hospital administration costs, compared to $196 in Canada, according to the research. Americans paid an average of $844 on insurance companies’ overhead, compared to $146 in Canada. Americans spent an average of $465 for physicians’ insurance-related costs, compared to $87 in Canada.” Second, that profit margins for health insurers remains high and uncontrolled.
There is actually one simple fix for both of these problems, and that is to eliminate the concept of multiple private insurance companies in the healthcare business. But since Americans seem to demand a private insurer, we can include that feature while eliminating the administrative costs and the high-profit margins.
The fix is to have the government determine the breadth of coverage by healthcare insurance and the amount that patients will be charged. The government will determine these features and then permit healthcare insurers to bid for the right to a monopoly. The private insurers can bid by themselves or they can form a new company owned by some or all of them. If no one bids, then the government can operate the health insurance business. If there is a winning bidder (and the amount paid goes to the government), the bidder gets a monopoly for three years, after which there will be another bid. The government is the one that fixes what doctors and hospitals get and how much insured patients get charged. The prices during the monopoly period can be changed where necessary. The insurer gets to operate its own business and decide how much its employees are paid and how to make the business function. But what the doctors and hospitals are paid and the cost to the customers is decided by the government. This permits the government to control excessive profit-making.
This sort of system permits control of profit-making both by doctors and hospitals and by the insurer. To make certain that there is uniform healthcare for all, doctors and hospitals are only permitted to bill the healthcare provider and not bill patients individually. All persons within the United States are permitted to purchase healthcare insurance from the provider regardless of their status. The rates charged poor people may be lower than those charged the wealthy. The purchaser gets an electronic card but does not need to prove identity, just pay the fee (failure to pay the fee results in cancellation or suspension of the card).
(This means that illegal aliens can get a card. But they are charged the highest rate; rates are lowered only for poor taxpayers).
The existing programs for Medicare, Veterans, and the like are folded into the system. Medicare pays into the system for the benefit of those who have paid social security all their working lives. Veterans likewise get a break because the VA pays into the system, and veterans can continue to use VA hospitals.
Cardholders can use their rights outside the United States. They pay foreign doctors and hospitals out of pocket and then make a claim against their insurance in the U.S. The insurer will reimburse up to the maximum allowed for the particular procedure in the U.S.
To me, this solves the major problems with healthcare in the U.S. It’s certainly possible that the government regulation may have to be enhanced, but hopefully not. For example, the private insurer may be slow in paying doctors and hospitals, but hopefully, their organizations can put the pressure on where needed. If the private insurer tries to corrupt the government into raising rates, we’ll need to do something about that. But overall I think making these changes would improve the healthcare system so far as compensation and costs are concerned.
If Biden is going to be nominated, then Bernie and his supporters need to work hard to get the platform improved and make sure that Biden commits to the changes required under the platform.