Cracking the Nut

No question about it. The two hardest legislative nuts that seem to defy cracking are healthcare and immigration. I want to talk about the first one today.

To start with, I do agree with those who feel that the business model of insurance is the avoidance of paying claims. But are voters ready to wipe out the private health insurance industry with Medicare for All? No, not yet.

I am old enough now to be on Medicare myself, and it is not a magic bullet that covers all medical costs. It’s just another form of insurance. Not all providers accept it, and even if they do, plain Medicare is not sufficient to pay for everything, so supplements are necessary, and there are choices to be made. Medicare itself has standard supplements available at different premium levels. Healthcare providers offer their own plans, called Medicare Advantage, which pay for more stuff but restrict the user to a particular health network, like an HMO.

Why is health insurance tied to employment? This is not exactly sacred tradition. It stems from a time during World War II when there were salary caps, and to attract workers, employers had to offer health benefits to get around them. These employer subsidies were exempted from taxes. The salary caps are long gone, but the exemption remains. To receive these benefits, however, employees generally have to be full-time workers. So yes, some people stick with jobs they hate, largely for the insurance.

I also agree with those who say that employer contributions to an employee’s health insurance premiums are income and should be taxed as such. This would help level the playing field. But there still needs to be some kind of reasonable plan available to those working in the gig economy or in between jobs. If there’s a gap to be filled by government, that  would seem to be the one.

Whatever we do, we can’t bring back the good old days when most healthcare was affordable, based on fee-for-service, and insurance was needed only for catastrophes. These days, almost any health issue can be catastrophic when it comes to cost, so insurance is a utility. Obamacare was a step in the right direction, but it hasn’t been much help with cost. Fixing this will require balancing business models with patient needs and deciding who pays for what. That’s where the policy wonks have to pick up the ball.

It may seem impossible, but as I often say, there are plenty of smart lawyers in Congress, who could figure out how to crack this nut. It may be unlikely, but I believe  it IS possible.