Thursday, January 25, 2007

The President's Health Care Proposal

By now, there's been a lot of discussion about Pres. Bush's proposal to allow a personal tax deduction for health care. But I'd like to ask a few questions:

* How many people with employer-sponsored health insurance actually know how much their employer spends on such coverage?
* How many people with employer-sponsored health insurance have coverage for things they don't need? If you're a young single man, do you really OB/GYN coverage? If you and your spouse are finished having children, do you need maternity, well-baby or child immunization coverage? If you're a healthy individual, do you need prescription coverage?
* If you had to select your coverage and pay for itself, would your employer plan be the one you choose?

In most cases, employers select a plan that meets the needs of most, if not all, their employees. This means that individuals are getting - and paying for - coverage they don't need and probably don't want. And with it being paid for by the employer, few have a good idea of just what such coverage is costing.

The President's proposal is an attempt to put the consumer in charge of selecting and paying for the coverage that fits their needs - with the same tax breaks companies have gotten for the cost. You don't let your employer select your car insurance, homeowners/renters insurance or life insurance, why do you want them to select something much more important like your health insurance?

Most insurance companies offer packages with the biggest difference being amount of deductible, out-of-pocket expenses and networks. A company with a diverse staff likes such packages because it meets their needs. But does it meet your individual needs? If consumers need variety in their packages and they're now in charge of making such choices and paying for them, insurance companies will respond to such demands and the health insurance field will change dramatically - hopefully for the better.

This is point of the proposal - to inject a sense of the free market into the system by allowing the actual consumer of services to select the ones they want and be responsible for paying for them and by allowing the insurance providers to tailor their products to the actual needs of the consumer.

I have no idea if this will work or if the concept will be butchered in Congress or by special interests as the proposal makes its way through the process. But, this is the first time in a long time that anyone has looked at letting the individual be in charge of such decisions - and its certainly worthy of discussion.

UPDATE: I wanted to share a column with you on this subject...Linda Chavez's "How to cure the health insurance crisis."


Kurt Burglar said...

To your question about how would people know how much their employer pays for their health insurance, I thought he said it would act like a standard deduction.

Maggie Thurber said...

Kurt - perhaps you misunderstood my question. I was asking how many people today know how much their employer currently pays for the health insurance they receive...

I know that some companies have started listing that on a benefits explanation at the end of each year to help educate their staff about the value of the benefit. But I'd bet that if you asked 10 people on the street, most of them wouldn't know the answer.

Lisa Renee said...

I know what ours is but that is because we are required to pay half of it. I would agree with you though that most people who are not required to pay a portion of their health care costs probably are not aware of the total cost. I also agree that making a single male or even a young married couple who can not have children biologically as an additional example having no option when it comes to selecting services does not make sense. In some cases some of the insurance coverage we have we will never use, some instances it is a "better safe than sorry" instance but take in my case, my child bearing days are over, my tubes are tied so barring some visit from an angel creating a mystical birth, it doesn't make any sense for us to have to pay for maternity benefits for me.

I thought as I read the president's plan that it held some merit and should be discussed.

Maggie Thurber said...

I only wish, Lisa, that the politicians in D.C. would be as willing as we are to have a discussion rather than declare the proposal "dead on arrival."

Hooda Thunkit said...

What a bunch of hypocrites, our Washington royalty.

Maybe if they had to purchase their own insurance like us mere mortals they wouldn't be so quick to dismiss and hopefully a little more willing to discuss.

But, Noooo, it's always about the politics and what party the idea came from, not whether it has any merit.

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