Back the hard work of the initiative. This time the discussion will be about immigrants and the solvency of such an initiative.
"Illegal Aliens"
First, I'd probably NEVER put the term "Illegal Aliens" into any proposal. Never Never Never.
To achieve the same thing you could just say "This would include all full-time residents and part-time residents who could show residency for x months per year" That way illegals and legals would be captured. Or if you wanted to specifically mention illegals - use the term "undocumented".. it raises less eyebrows.
I apologize. Several hundred pages of legal documents made me a little blurry eyed. I have changed the term illegal alien to "undocumented immigrant resident of the county".
But this line does raise a valid question. Should the health care system be open to any resident who pays? In truth this could only increase the pool of patients and decrease everyone's risk. On the other hand I live in Arizona and this is a hot button issue. This one issue could be used to defeat the whole bill. What do you think? Should immigrants be included?
Solvency
Many of you were concerned that a county alone would not be sufficiently solvent to provide health care to its residents:
getting it off the ground will be more difficult. First, it has to show that it can be financially solvent, which would be very difficult - because this would be exactly the same thing as requiring the funds to open a fully functioning hospital, and to start a small health insurance program. You would need to be able to compete with existing insurance plans, provide rates low enough to intice those who are currently uninsured (likely for cost reasons) to sign up, but still make enough to cover the costs.
I call that unworkable.
What about the rich:
Person A and Person B.
They both earn the same amount - doesnt really matter how much.
Let us say that Person A has HIV/AIDS/BirdFlu and Person B is perfectly healthy.
Person A would be charged a LOT for private insurance, but could buy into your plan for very little, while Person B would be able to get Private insurance for a lot less...
So Person A would choose your plan, and Person B would go with the Private plan... eventually, this Opt In plan would have only those people who were completely uninsurable or very high risk people - and the Private sector would be unaffected. Not a good situation.
When I started this project I did crunch some numbers for my county--Coconino County in Arizona. I thought that would be way too boring for a blog but maybe it is a necessary evil. So here we go:
There are 125,000 people in my county.
68,000 hold a job. Remember that this initiative does not treat people on Medicare or Medicaid because they are already covered. Also there are a fair number of people treated by the Indian Health Service in my neighborhood who also would not initially be covered.
There are 27,000 families--35% with children under 18 yrs. That is 9450 families with kids.
If you assume all of the families are the classic 2 adults and 2 kids then 18,900 adults are attached to families. Since this is a red state all the marriages are one man and one woman. For simplicity I forgot about single parent families for now. That leaves 49,100 singles or married with no kids.
For the families:
The average income reported for families in my area is $55,000. In the family of four that means a per capita income of $13,750 which falls in the 3% health care premium.
(c) Enrollees shall have deducted from their pretax pay the premium for the Health Care Cooperative as follows:
(1) Gross annual income of $0-$10,000 per person in the household—0.5% of the gross pay.
(2) Gross annual income of $10,001-$15,000 per person in the household—2% of the gross pay.
(3) Gross annual income of $15,001-$25,000 per person in the household—3% of the gross pay.
(4) Gross annual income of $25,001-$35,000 per person in the household—4% of the gross pay.
(5) Gross annual income of $35,001-$50,000 per person in the household—5% of the gross pay.
(6) Gross annual income of $50,001--$80,000 per person in the household—6% of the gross pay.
(7) Gross annual income of $80,001-$100,000 per person in the household—7% of the gross pay.
(8) Gross annual income of above $100,000 per person in the household—8% of the gross pay.
So $55,000 x 3%=$1650 per year.
9450 families x $1650 per yr=$15,592,500.
The employer contribution is dependent on the average income. The average man earns $38,500 in my county. That is in the 3.5% range. The average woman makes $30,250. That is in the 5% range.
(d) The premiums collected in (c) will be direct deposited into the CCHCC Trust Fund and allocated according to the budget that the HCC creates each year.
(e) Additionally, the employer of each person who enrolls in the program shall contribute an additionally premium based on the pay of the employee as follows:
(1) Gross annual income of $0-$15,000—7%.
(2) Gross annual income of $15,001-$25,000—6%.
(3) Gross annual income of $25,001-$35,000—5%.
(4) Gross annual income of $35,001-$50,000—3.5%.
(5) Gross annual income of $50,001-$80,000—3%
(6) Gross annual income of $80,001-$100,000—2.5%
(7) Gross annual income of greater that $100,000—2%
$38500 x 3.5%=$1347.50 and $30250 x 5%=$1512.5
So the family of four contributes $1650+$1347.50+$1512.50=$4510 per year or $376 per month. Very competitive.
9475 families x $4510=$42,732,250.
For Singles and married no kids:
There are 49100 people who work without kids. So the contribution of the worker and the employer are:
Men: $38,500 x (5%+3.5%)= $38,500 x 8.5%=$3272.50 ($273 total per month or $160 for the employee contribution only)
Women: $30,250 x (4%+5%)=$30,250 x 9%=$2722.50 ($227 total per month or $101 for the employee contribution only.) Still really competitive.
Since the male/female ratio is about the same:
For Men: 24550 x $3272.50=$80,339,875
For Women: 24550 x $2722.50=$66,837,375
Totals:
$42,732,250
$80,338,875
$66,837,375
$189,908,500 to cover about 90,000 people. That is $2110 per person per year. The county would take in $15,825,708 per month! Now considering the fact that most doctor have grown accustomed to a 6 mos lag period between when we bill the service and when we get the money that would allow a pool of $47,477,125 if you wait to pay the first bills for 3 months.
Now if you do not give families with kids a break then the calculation is much easier:
Men: 34,000 x $3272.50=$111,265,000
Women: 34,000 x $2722.5=$92,565,000
Total: $203,830,000 which is $2265 per person per year.
That is as much as our hospital grossed in one year. That includes all the people the hospital treated on Medicare and Medicaid and the large number of people that our particular hospital treats who visit the area as tourists and break a leg at the ski resort, etc.
The county in the later case makes $16,985,833 per month and a 3 month pool would equal $50,957,500.
Of course you could always charge more than what I have suggested. Or do not give families a break the first year and if you have more money left give them a break in the second year. The system is very versatile.
The fact is that there is more than enough money spent on health care every year. All we have to do is shake the high priced insurance executive off our backs.
How well do for-profit plans value their executives?
Last year, the highest-paid executives at 10 of the nation's largest for-profit health plans received an average compensation, including salary, bonuses, life insurance, retirement plans, and other compensation — but not unexercised stock options — of $11.7 million, with the highest-paid executive, William W. McGuire of UnitedHealth Group, making $54.1 million.
The report is from Families USA, which is critical of the compensation levels. The organization extracted its data from information that the companies submitted to the U.S. Securities and Exchange Commission.
Highest compensation package, exclusive of unexercised stock options
NAME TITLE COMPANY COMPENSATION
William W. McGuire CEO UnitedHealth Group $54,129,501
Wilson H. Taylor Retired chairman Cigna $24,741,578
Ronald Williams Executive VP, large group businesses WellPoint Health Networks $13,205,631
William Donaldson Chairman Aetna U.S. Healthcare $12,650,393
Leonard Schaeffer Chairman & CEO WellPoint Health Networks $11,127,465
H. Edward Hanway Chairman & CEO Cigna $9,478,634
D. Mark Weinberg Executive VP WellPoint Health Networks $8,957,410
Richard Huber Ex-chairman, CEO, president Aetna U.S. Healthcare $6,988,987
William Pastore President, Cigna HealthCare Cigna $6,779,028
Thomas Jones President, retirement and investment services Cigna $6,055,314
The study took a second factor into account separately: the value of unexercised stock options. Executives on this list held unexercised options worth an average of $68 million in 2000, with the top executive (again, UnitedHealth Group's McGuire) holding options valued near $358 million.
Executives with the largest value of unexercised stock options
NAME TITLE COMPANY COMPENSATION
William W. McGuire CEO UnitedHealth Group $357,865,646
Stephen J. Hemsley President & CEO UnitedHealth Group $144,928,886
Norman C. Payson Chairman & CEO Oxford Health Plans $115,375,414
Wilson H. Taylor Retired chairman Cigna $66,141,372
Leonard Schaeffer Chairman & CEO WellPoint Health Networks $64,610,759
H. Edward Hanway Chairman & CEO Cigna $43,385,939
James G. Stewart Executive VP & CEO Cigna $41,049,922
Jeannine M. Rivet Executive VP & CEO, Ingenix UnitedHealth Group $39,450,395
R. Channing Wheeler CEO, Uniprise UnitedHealth Group $32,506,870
John W. Rowe President & CEO Aetna $25,026,549
SOURCE: HEALTH PAY FOR HEALTH PLAN EXECUTIVES, JUNE 2001, FAMILIES USA, WASHINGTON
http://www.managedcaremag.com/...
This is a very doable initiative. We just have to overcome the years of propaganda that say that it is not possible. "We have nothing to fear but fear itself." If it fails and does run out of money, what happens? The system goes bankrupt and people go back to private insurance. You really have not lost anything. The only way to "lose" is not to try.
You can see a short copy of the bill at:
http://www.dailykos.com/...
The following link is to a Word document that contains the entire Initiative. It has been scanned by Semantic for viruses:
Dr A’s Initiative
The idea for this initiative came from Germany. You can read about it at http://www.dailykos.com/...