Category: Health

Suppose you're just turning 65 and you want to make sure that you have prescription drug coverage in addition to Medicare. You have four possibilities…

In 1996 Congress created a demonstration project permitting small employers and the self-employed to establish up to 750,000 tax-free Medical Savings Accounts (MSAs). However, as a result of opposition in Congress, lawmakers imposed a number of restrictions that limit who can purchase MSAs and thwart the ability of MSAs to work properly.

Although tax law generously subsidizes the employer payment of third-party health insurance premiums, it provides virtually no tax relief to those who pay medical bills directly. Thus the tax law encourages people to turn over all of their health care dollars to a third party. The results have not all been positive.

A National Public Radio story on William Delashmit, 72, recently highlighted the problem of Medicare private contracting. Delashmit suffers from Cogan's dystrophy, an abnormality of the cornea that has caused him to lose sight in his right eye. There is a 95 percent chance laser surgery could restore his sight. Unfortunately, Dr. William Stark of Johns Hopkins University, Delashmit's physician, may not be able to help him.

In 1997 the federal government, which had demanded that manufacturers equip new cars and vans with passenger-side air bags, did an about-face. Until 1997, government regulators had claimed air bags would save thousands of lives. They failed to disclose evidence that passenger air bags posed a threat to infants, children and small adults. As mandated, air bags were installed and children died as a result. In response to a public outcry, the government announced that with a waiver from the National Highway Traffic Safety Administration (NHTSA), vehicle owners can disconnect their air bags.

Not long ago, American health care was easily the best in the world. Today, we face a quality crisis. Almost 60 million Americans are now members of health maintenance organizations (HMOs), and an estimated 160 million are enrolled in some kind of managed care. Yet polls show that many of these people have no confidence that their health plan will make decisions in their best interest as patients.

With Medicare teetering on the edge of bankruptcy, President Clinton is proposing to add more beneficiaries and more costs. Specifically, all Americans ages 62 to 64 (the Medicare eligibility age is 65) would be able to join Medicare in exchange for a monthly premium between $300 and $400. Those ages 55 to 61 who have involuntarily lost their jobs would have the same option. And employers would face a new mandate: retirees over age 55 who were promised and then denied postretirement health insurance would have the right to buy into their previous employer's health plan. Are these proposals a good idea?

Despite a new government study showing that the rising cost of premiums is the main reason a growing number of people don't have health insurance, more than 200 members of Congress have cosponsored legislation that would make health insurance even more expensive.

Should patients, in consultation with their physicians, be allowed to make their own health care decisions? Or must bureaucrats protect patients from themselves and their doctors? These questions are prompted by the issue of Medicare private contracting.

The budget agreement passed by Congress and signed by President Clinton includes a provision giving the states $24 billion over five years to extend health insurance to more low-income uninsured children – basically those with family incomes below 200 percent of poverty, not eligible for Medicaid, not enrolled in a health plan or covered by health insurance.

For more than 30 years, state legislatures have passed laws driving the cost of health insurance higher. Known as mandated health insurance benefit laws, they force insurers, employers and managed care companies to cover – or at least offer – specific providers or procedures not usually included in basic health care plans.

Senators Orrin Hatch and Ted Kennedy have joined forces to establish a new government program to finance children's health insurance. They propose to fund the program by increasing federal cigarette taxes from 24 cents to 67 cents per pack – an increase of 43 cents. The Hatch-Kennedy tax promises to raise $30 billion over five years, with $20 billion to go for children's insurance and $10 billion for deficit reduction.

Last year Congress made tax-free Medical Savings Accounts (MSAs) available to 750,000 American workers and their families. Under a provision of the Kassebaum-Kennedy health insurance reform bill, small employers (50 or fewer employees) and the self-employed can purchase less expensive high-deductible health insurance policies and make tax-free deposits to an MSA. They can use their MSA money to pay small and routine health care expenses, reserving insurance to pay large, catastrophic expenses. Money that remains in the account at year's end earns tax-free interest.

Most people follow the conventional wisdom: If it ain't broke, don't fix it.

Washington follows its own wisdom: If it ain't broke, break it.

America has nearly 10 million children without health insurance, and many in the policy community propose a broad new entitlement program to insure them. But few have asked the important questions we must answer in order to design an effective policy response. For example, how many uninsured children are there? What are their demographics? How long do they remain uninsured? And is a new health insurance program the most cost-effective way to assure they get health care?

Congress can easily make health insurance either less expensive – or more expensive.

Three major health care crises are developing: a funding crisis, an insurance crisis and a quality crisis. All three require fundamental changes in federal policy. And all three will become more severe if action is delayed.

Some of the proposed changes to Medicare would be of little help. Others would cause more problems than they would solve. Either way, Congress and the president seem willing to approve minor changes that will only postpone the trust fund's imminent bankruptcy.

The federal government currently subsidizes the employer-provided health insurance of middle- and upper-income workers by about $100 billion a year. By contrast, low-income workers often do not have employer-provided health coverage, and thus get neither the insurance nor the tax break. If they buy insurance on their own, they pay with aftertax dollars.

Proponents of government intervention want a Medicare program or a resurrection of the failed Clinton health care plan for children. And they are already starting their campaign.

After years of bipartisan legislative proposals to create tax-free Medical Savings Accounts (MSAs), months of partisan congressional wrangling over whether to include MSAs in health insurance reform proposals and weeks of discussion on various MSA demonstration projects, Congress passed a law that includes a limited version of Medical Savings Accounts. The legislation has some good and some bad points, but the future fight over who can have an MSA likely will get ugly.

If Congress doesn't act soon, the Medicare trust fund will be unable to pay the medical bills of our senior citizens by the year 2000, and possibly sooner.