Saturday, September 17, 2011

Saving the dream?

Conservative columnist Cal Thomas published an article on September 7 in which he advocated adoption of a plan developed by the Heritage Foundation to amend the tax system, reform government spending, and balance the federal budget.

I read through this very complicated document. The section regarding federal spending on healthcare is so bad that it requires comment. The plan advocates the provision of tax credits that families can use to buy insurance instead of employer-purchased plans, whether they are working or not.

The consequences of such actions would be disastrous!

Here’s why:

Currently, people who are employed and are lucky enough to have a group health plan supplied by their employer are insured regardless of their health history or that of their dependents. The same is true of governmental employees. The same goes for people who are able to obtain Medicaid (which is becoming increasingly difficult) and for people who are able to obtain Medicare.

Private insurance companies operate to make a profit, which is certainly understandable. They use the premiums collected to pay for medical services used by their customers. To the extent that they can collect premiums and not pay for services, they increase their profits. When they provide insurance to members of large groups, they are able to spread the risk of large payouts across many individuals and increase their chances of operating profitably.

For the vast numbers of people who are not eligible for such coverage, individual or family plans are extremely expensive; and if there is any negative health history, these plans are either unaffordable, the relevant health problem is excluded, or the plan provides minimal coverage. Private plans costing more than $1,000 per month all too often pay for essentially nothing. And anyone who has employer-based insurance is subject to the same problem. If they become sick and can no longer work, they lose their employer-based insurance – and if their family is dependent on this insurance, all will become uninsured.

The Heritage Foundation plan addresses none of these problems. It is a ‘you are on your own, sucker’ plan that saves the government money but puts a majority of Americans at risk. Without Medicaid and Medicare, those with significant medical problems would be unable to obtain coverage. The relatively small tax credit or voucher offered by the Republican Heritage Foundation would not fix the problem.

Furthermore, unlike “Obamacare,” no one is mandated to have healthcare insurance. This will reduce the pool of healthy people paying into the system. It leaves people with serious problems – who cannot afford insurance – to use emergency rooms to obtain acute care and no way to pay for chronic treatment.

The devil is in the details! The plan is posted on a website called “Saving the Dream’. Saving the dream? I don’t think so!

Heritage Foundation Healthcare Plan (touted by Congressional Republicans):