Blog

06/09/17

The Other Half

We are in a series exploring the idea of a single payer healthcare system.  Click here to find the prior posts.

Just a reminder that we are still playing under the rules of magical assumptions.  Hard problems are just going to get solved; pesky details are skipped over.

What that sounds like a diagnosable psychological condition, my team will tell you that is their everyday life with me as their CEO.  Broad vision, big goals, rainbows and butterflies…then off to a client dinner before the real work starts.

It is good to be me.

Let’s tackle another big sticking point in this whole idea.  While we’ve looked at length at how much the government pays and who it covers, the reality is almost half of us get our health insurance through our employer. 

We learned at the advent of ObamaCare when employers DID NOT bail on providing health coverage to their employees, even though on paper it was in their financial best interest to do so, they want better options, but are necessarily anxious to hand this over to the government.

As much as managing health benefits is a pain in the posterior, there is a simple reason employers want to keep this hassle – employees.  I can’t walk around just thinking big thoughts without a bunch of really smart, talented people who do the actual work, so we need to attract and keep them.  Benefits are a big cost item, but a big tool for assembling the ninjas, especially in a time of virtual full employment in many markets.  Like I want the government doing this for ALN?  Should I also have the Department of State manage our sales force as well?

But another lesson of ObamaCare is that to make any insurance model work, you need a large, diversified population in the pool.  And the 156 million people who have employer-sponsored insurance tend to be healthier, which helps make the math work.

So, we have to make them participate.  This is a hypothetical single payer system, after all.

To be pure, we’d tax employers at a rate about equal to what they pay in health benefits and the government would then give their employees the aforementioned tax credit, but that means we are simply round-tripping the money through DC, which means it would lose about 20% of its value in the process.

Instead, can some smart tax people just figure out how to eliminate that step?  Employers would give their folks their ‘tax credit’ directly.  They could give them as much as they want, as long as it hit some minimum.  That would allow employees to still use their level of benefits in the competition for talent.  The employees would then take their money to the market to buy their own MA plan.

OK, so now we have 320 million people with a voucher in hand, the value of which is adjusted to reflect their personal situation, headed off to the mall of MA plans to do some shopping.

Next week…what type of care delivery systems might they find lurking behind those plans they are being pitched?

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ALN

Tim Coan, ALN’s CEO, writes an insightful and witty blog three times a week about a variety of topics relevant to independent physician practices.

Yes, I'd like to get Tim's blog.