August 20, 2008
“We pay $2,600 a month for health insurance for the three of us,” the woman at the church festival told me. “I have a $ 2,500 deductible. My husband and daughter have a $5,000 deductible”.
My friend is a dairy farmer. She and her husband both have health problems. She considers changing insurance companies to find a more affordable plan. But with her pre-existing conditions, getting insurance to cover everything is nearly impossible.
On the same week-end there was a fundraiser for a gal with breast cancer. While the festival will raise enough money to cover church expenses for the next several months, the fundraiser for the gal with breast cancer probably won’t come close to covering her expenses.
Something is not right.
People see the rising costs of health care everywhere. But what can we do about it?
Wisconsin has some of the worst consumer protections in the country for those who buy individual health insurance plans. As a state, we pride ourselves in protecting consumers. But in this case we have fallen far behind many states. The first step toward reform must include setting rules on the practices followed by insurance companies.
Those rules include setting a limit (or completely eliminating) how long pre-existing conditions can be excluded; forbidding companies from denying coverage to people and requiring companies to set rates based on the experience of the community rather than the individual.
Basic insurance reform has happened in many states. And taking this step can help lay the ground work for more comprehensive reform.
To solve the heath care problem we must look at all aspects of health care – what doctors and hospitals do; how health plans operate; how patients do or do not follow doctors’ instructions and what government can do to make sure people operate by the rules.
One way other states are beginning to solve the problem is creating a ‘one stop shop” where people buy health insurance. Every plan follows rules. People can choose the plan best fitting their needs. Plans compete based on their cost and quality. Higher costs plans have a higher premium.
Our next step in health care reform might be to create this ‘one stop shop’ or an ‘exchange’ where people choose from competing plans. Our state could set the rules for evaluating plans based on cost and quality. People could choose the appropriate plan and all plans would pass the savings of this competition on to consumers.
Competing plans operating under uniform rules: this is the idea behind both the Governor’s Badger Choice plan and the Senate’s Healthy Wisconsin’ plan. The difference between the two proposals is the number of people covered. Under Badger Choice only those businesses with fewer than 50 employees would buy insurance in the ‘one stop shop’. Under Healthy Wisconsin everyone not now covered by a public plan (like Medicare and Medicaid) would buy through the exchange.
There are a few other differences. But the basic idea is the same – create the rules and allow the plans to compete.
Many markets need rules. For example, think of the rules governing securities. Rules for health care must create the efficiencies and the positive health outcomes now lacking.
Because of the complexity of health care, it is likely we need a neutral third party to set these rules. An ‘exchange’ would be a single point of entry for all people to purchase a health plan. Buyers and sellers would all be bound by the rules of the exchange.
Covering everyone, eliminating pre-existing conditions, allowing consumers to switch between plans once a year, charging the same premium for the same coverage regardless of health – think it’s impossible?
States across the country are thinking of ways to make this happen.
Wisconsin can too.