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Tuesday, September 18, 2007

Health Care Everywhere

Health care is popping up everywhere, it seems. The UAW and GM's biggest issue in contract negotiations is getting the union to take over management of retiree health care. Hillary wants us all to buy insurance, and Wal-Mart is opening clinics in it's stores.

GM is the "lead company" in the UAW contract negotiations. One of GM, Ford and Chrysler's goals is to move retiree health care from the companies to the unions. Contrary to the belief of some in the UAW, this isn't "unprecedented". Most smaller unions have run their health care systems for retirees for years.

One only need look at the steel industry to see why the companies probably SHOULDN'T run the retiree health care system. When that industry collapsed tens of thousands of retirees too young for medi-care found themselves with no insurance. Considering the shape of Ford's balance sheet, retirees should be thinking this might not be a bad idea.

Hillary has announced her plan to get everyone insured, mandate it! That's right, a federal law that says you have to have insurance, but with a tax credit carrot to get you to buy it. The problem there is the tax credit doesn't show up until months after you have to pay your premiums, little solice to those who already forgo insurance because they can't afford it right now.

We already offer a number of tax incentives for health care, from credits to income offsets, her plan (like many republican one's) would expand on that for those who's employers don't offer insurance, or have it at a high cost.

Her plan, to her credit wouldn't create a new bureaucracy, instead it would expand existing one's, by making current federal government health care programs available to everyone. And of course, there are taxes. If you are an employer and don't offer insurance, you get taxed. If you got a tax cut in 2002, it'll be going away.

The cost of her plan? Supposedly $110 billion a year to cover 47 million. I say supposedly because as I pointed out when Barack Obama and John Edwards came out with similar numbers in the summer, we can't cover one third less than that number on Medicare for 3 times the cost. How are we now suddenly going to become so lean in government provided (mandated) health care that we cut the cost that much?

The UAW and Wal-Mart, of all folks, could end up as sort of strange bedfellows in the whole health care saga. Wal-Mart is opening quick care clinics in a number of it's stores, which have prices far lower than most doctors offices and hospitals (80-90% less than an ER visit).

They also offer low cost ($4) generic prescriptions, even if you aren't insured. If the UAW does end up as it's retiree's health care insurer, Wal-Mart may end up as one of their best options to keep their costs down.

The UAW would be smart to look into reimbursing retirees for generic prescriptions, and low cost office visits at something like the Redi-Care clinic's at Wal-Mart at a 100% rate. If you chose to use a higher cost alternative, you get less of it back.

As John Stossel pointed out on ABC's 20/20 last Friday, more insurance may actually be the worst solution to our health care system's rising prices. Areas of medicine that traditional insurance doesn't cover, lasik eye surgery, and cosmetic procedures have seen their prices come down relative to inflation, while insured proceedures keep going up. Why? Competition in those fields of medicine make it imperitive to keep costs down. ER's and regular doctors who take insurance don't have that incentive, because the patients aren't paying for (most of) the cost.

He also showed how HSA's (Health Saving's Accounts) at places like Whole Foods had reduced their costs, but not cut the quality of care that employees got. Instead of a huge cost major medical plan, Whole Foods offers a catastrophic care plan, and a $1500/yr HSA to employees. The workers suddenly started "shopping" for doctors when they needed something, instead of just going to the first one they found in the yellow pages. After grumbling by some employees about the loss of "traditional" insurance they held a vote, and 77% decided they liked the new plan better.

Technorati Tags: Health Care, Insurance, UAW, GM, Wal Mart, Hillary Clinton

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