Obama and McCain Health Care - Getting to What's Real...

I'm the first one to admit that I'm not sure what the best solution is for the cost of health care in America.  As someone who sees what health care costs, on a monthly basis, within a company, it's a scary business proposition, and one I would gladly hand over to the right entity.

But government socializing the program?  I have a hard time getting my head around that.  The biggest issue is the economics of the situation, and of course, big government's track record in managing big programs with similar scope and the resulting tax burden when things don't work out.

I've got the prospect of universal health care on my mind based on recent articles in Workforce and a blog posting over at The Human Capitalist.  The Workforce article deals with employers banding together to make sure they aren't taxed to death to fund a chronically underfunded Massachusetts universal health care law, and the Human Capitalist talks about finding a 2.5% tax in a San Francisco restaurant to help pay for the city's universal health care law.

Here's a simple thought when you hear proposals from the candidates regarding health care.  You deserve to know what the cost per participant is for the plans they are touting. 

Here’s why that's important - health care reform at the presidential candidate level sounds great, but until someone gives me some fiscal facts for what the planned Cost Per Participant under each plan is, it’s all pretty much theory to me. As someone who signs self-insured invoices and sees the costs rolling in, I’m aware that it’s easy to underestimate what health care is going to cost.

I know the candidates offer a mixture of private and public solutions. Doesn’t matter to me - I want to see the cost model… Starting with cost per covered individual.  Once you have that, you can have a meaningful conversation about how it's going to be paid for.  Then, it would be nice for all to make some projections if that's going to mean tax increases at the individual level, corporate level, or stealth taxes like the SF restaurant tax.

I learned about how variable cost per covered individual can be by managing a self-insured plan and reading Joe Paduda. From a post I continue to go back to on Joe’s Managed Care Matters from 2007 regarding CT’s single payer plan:

Politicians were shocked by the estimated total cost, which ranged from $12 billion to $18 billion.

I’m shocked that they were shocked.

My home state has just over 3 million citizens. At $4000 per person, that’s $12 billion; at $6000 per person, it’s $18 billion. I don’t know what’s more troubling - for politicians to not know that health care costs between $4000 and $6000 per person, or that we have about 3 million folks living here.

And it wasn’t just the pols; “”Even we were quite shocked [by] the enormity of the cost. … A lot of people are just scratching their heads and saying, `Wow!,’” said Eric George, associate counsel of the Connecticut Business and Industry Association, the state’s largest business lobby.(Hartford Courant, 4/10/07).

If you going to insure everyone in America, the cost is going to be at least the $6,000 per covered individual, or more.  That's because you are picking up lots of folks who can't work, are elderly, etc. into the cost/risk mix of your plan.

More recently, San Francisco’s efforts to create a program for the city’s uninsured estimated the cost per covered individual at $2,800. Not enough… Even with the restaurant tax, they are chronically underfunded and there will likely be more taxes to follow.

So, I like the debate, but would love to see what the camps assume their proposals would spend per covered individual. That would allow for a better analysis of each plan at a very basic and real level, including who pays for it - Corporations, small businesses or you...

Regardless of your political drift, you deserve that level of transparency.

Comments

[Michael Haberman, SPHR]

It is going to get very ugly in the next 4 years or so. I just hope I win the lottery at some point so paying for my healthcare will not be an issue.

[Richard Parker]

Wake up, people. Americans don't need health INSURANCE, they need health CARE. That's like saying everyone in the US deserves to have a car, rather than providing public transportation. When any government, state or Federal, pushes the burden of health care from the government to the insurance companies, costs will ultimately be borne by the employers (the main clients of insurance companies) instead of the federal or state government. Someone is going to pay, either the government or the employer. As individuals, we pay less of it when it is insured because we are not paying out of our taxes. If I hear one more dull-witted "consultant" say how surprising it is that health care costs are increasing faster than inflation, I will ask him/her to instead compare health care increases to CEO salary increases. I would prefer to see the guys at the top get smaller bonuses and stock options than have the government continue to shell out for uninsured Americans.