Business, Politics

Pay Now or Pay Later

07.22.09 | 3 Comments


Pay Now or Pay Later, but PAY you will.

That is the single most important aspect of this healthcare debate that is presently going on. It’s much, much simpler than we’re making this set of issues. Today, there are nearly 50 million Americans without adequate health care – that’s 1 in 6 of us. Despite the debates going on right now, this really shouldn’t be about the 5 people who do have coverage, it should be about what we do about the 1 person who doesn’t have coverage.

What happens today is that this 1 person (representing 50M others) doesn’t perform routine preventative maintenance which helps to improve overall health resulting in far lower costs. This is the alternative to waiting until problems are acute and treating them after the fact in emergency rooms. There are dozens of studies that empirically demonstrate the health and fiscal benefits of routine, preventative maintenance. Since we don’t have such a system in place, we are all paying a “tax” now to healthcare providers to cover the costs of this uninsured base of people.

Thus the answer to this dilemma is simple. Establish a basic healthcare plan that provides for preventative, routine services and catastrophic services for those who have no other option. Have a plan you like now? You have coverage? Great, stick with it. This isn’t about you, it’s about the other 50M Americans who don’t have an option.

As a further twist, this plan should be the default Federal plan that the Executive, Legislative, and Judicial branches use along with the rest of the Federal employees (including the military.) Private companies should have an opportunity to bid for this business since they are the ones nervous about it taking away business from them (though they really should jump for joy at being able to increase profits without the uninsured and lower premiums for everyone else.)

From a funding perspective, increase the FICA contribution limit from the current $90,000 per year to $150,000 per year and use those funds to offset the cost. Meanwhile, the smart insurance companies will move to reduce their rates (perhaps giving 50% of the benefits back to subscribers? Is that too much to ask?) to offset the increase in FICA.

The net is, this is a much simpler and easier problem to tackle if we take the right approach. It’s about the uninsured, it’s about improving health in that segment, and it’s about reducing costs through routine, preventative services. Now that we have the answer, let’s pull our thumbs out and get on with it….