Health Care Safety Net
Research for Online Investors

by John Dalt

2/23/10

This article ran on July 28, 2009. With the ‘health care summit’ scheduled for Thursday, I thought it timely to resurrect it.  We have subscribers in Washington, I hope they read it. We have edited the original missive for clarity.

Rather than plow ground that has been plowed by writers more gifted than I, my focus is how to provide health care to uninsured citizens.  If this is a national priority, let’s not destroy the health care system that stands between us, and the grim reaper in the process.

As a former County Commissioner, I had the responsibility to oversee and fund the county health department.  This health care facility provides basic services to citizens who cannot afford (or choose not to pay for) access to private health care.  County health departments exist throughout the nation.  Free or reduced price, health care is already being provided depending on your ability to pay.

The present discussion is about building a new bureaucracy and restricting health access for everyone.  Why not increase the funding for County Health Departments around the nation?

Hospital emergency rooms must be allowed to refuse care to people who cannot pay for their services.  How has it become acceptable to steal services from hospitals and doctors by requiring free treatment to uninsured patients? Are we ready to pass a law that restaurants must feed anyone who is hungry, or that I must provide a bed in my home to the homeless?

The uninsured could be referred to a hospital for treatment if needed, by the health department. Hospitals would bill the county health department for any services provided, at the hospital’s lowest negotiated group network price.

Funding should be allocated by population on a simple numerical bases, and disbursed to each congressional district.  The Federal Government’s role would end at this point.  Each Congressional District would have a local board, composed of one commissioner from each county.

These district boards would be responsible to distribute the funds to each County Health Department for the best impact in their area. County Health Departments would provide basic health services for the uninsured or poorest citizens.

To access these services, citizens would have to:

• Prove citizenship (we cannot provide free health care to THE WORLD)
• File a copy of last year’s 1040 (verifies income)
• Prove residency (avoids shopping location)
• Develop other local regulations sensitive to local voter wishes.

To increase insurance participation, let individuals deduct insurance premiums up to $3,600 per head of household, and $2,000 per dependant on their federal taxes.  Let companies deduct insurance benefits on the same schedule.  Require insurance companies to accept citizens with pre-existing conditions.  This would have two caveats:

• 90 day exclusion period if the pre-existing condition was not covered by insured’s previous policy, or if they did not have insurance.
• Citizens would not be able to “insurance shop” for better coverage on pre-existing conditions.  Previous coverage would apply for 90 days on any pre-existing condition.

With this health reform plan, we accomplish a few beneficial goals, and avoid some the worst outcomes.

• The costs are clearly stated in the federal budget, as a transfer to congressional districts for health care.
• We stop health care for non-citizens.
• We eliminate cost shifting onto insurance premiums.
• The health care benefit is restricted to county health departments, and basic health care as a safety net.

This benefit is not intended to grant access to the “best health care money can buy” for everyone, but to put in place a safety net under our poorest citizens, until they get back on their feet and can afford the health care they would like for themselves and provide for their families.

Initial cost should be $3.00 dollars per person per congressional district based on the latest census.  These funds would be used to augment the present County Health Care budgets.  Total Federal expenditure, less than $1 billion dollars per year.  The safety net can be in place ninety days after enactment.

A few general points need to be emphasized:

• Health care is expensive because government constantly expands coverage to new illnesses: i.e.: alcoholism, mental illness.
• Health care is expensive because of tort lawyers.
• Health insurance is expensive because of low deductibles.

Addressing these three issues will slow the growth in health care costs. Removing non-payers from the health care system will eliminate cost shifting, lowering health care costs to everyone.

Medicare and Medicaid must be required to pay the lowest privately negotiated network price for any services.  This would further reduce the cost shifting that currently distorts the market.  It also sets reimbursements at a localized cost rate, rather than a one-size-fits-all standard.  It takes the power away from the government to promise more and pay less by force.

Some may have a concern about the exclusion of non-citizens in our coverage by the nation’s taxpayers.  If a non-citizen seeks medical assistance at any county health department or hospital, they must first sign an "agreement to deportation."

After being treated and stabilized, they will be immediately deported by the County Sheriff.  The county health department will fund the cheapest transportation to a hospital in their home country.

Our country is going broke, we cannot afford another entitlement for trillions of dollars.

“Men occasionally stumble on truth, but most of them pick themselves up and hurry off as if nothing ever happened.”
--- Sir Winston Churchill

The information presented in this newsletter is based on generally available news releases, corporate filings, current events, interviews and the editor’s opinions.  It may contain errors and you should not make investment decisions based solely on what you believe you have read here.  Do your own research, it is your money.  If you lose it, it is your responsibility, not ours or your grandmothers!  The editor may or may not have a position in any securities discussed.  The editor may have held a position in a security earlier, or in the future.

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