Solving the Health Care Crisis by Ohio Constitutional Amendment in 2015
Beyond the positive improvements implemented by the Patient Protection and Affordable Care Act (PPACA) , there is little likelihood of further improvement of our health care coverage through the U.S. Congress or the Ohio General Assembly because those bodies are controlled by the health insurance and health care providers who will continue to protect their outrageous profits. The only avenue available is an Ohio Constitutional Amendment placed on the ballot as a voter initiative.
As background read the research presented in the April 4, 2013 Time Magazine article “Bitter Pill: Why Medical Bills Are Killing Us” by Steven Brill (Or read a summary of this 36 page article at http://patriciadubrava.com/?p=187 or the Physicians for a National Health Program discussion of it at http://www.pnhp.org/news/2013/february/time-steven-brills-bitter-pill-should-wake-us-up).
There are three problems with our national health care system:
1) Health provider charges are driven by the vulnerability of the patient to provider profiteering. Charges for services to Medicare and Medicaid patients are the lowest because they are government controlled. Insurance companies have varying negotiating positions and generally are next lowest. Uninsured patients and those paying their own charges within deductibles have no protection and are often charged 10 or more times what Medicare would pay for the same service. All charges, including those paid by Medicare and Medicaid, are higher than those for the same services in Single Payer nations. Part of the justification for higher health provider charges is that they must provide care for uninsured or underinsured people who can’t pay for health care received. These uncompensated health services are made more expensive by lack of preventive care and late intervention.
2) Health care insurance administration costs and profits are unreasonably high - 25% to 30% of total premiums received. The PPACA does include limits of insurance administrative and profit costs to 15% (large group policies) or 20% (individual or small groups). That is, the PPACA requires that 80 or 85% of total policy premiums be used for paying claims. By comparison, Medicare administrative costs are less than 2%. A related problem is that the administrative costs of providers are increased by the need to deal with multiple insurance companies with different forms and processing procedures and insurance company resistance to paying claims.
3) Despite the PPACA, many will remain uninsured or underinsured by policies with high deductibles. The uninsured and those paying their own costs within their deductibles have no protection from inflated charges. Many are forced into bankruptcy by medical charges.
We can solve these problems in Ohio with an Ohio Constitutional Amendment with the following provisions:
1) The first problem (high charges especially to the most vulnerable) can be attacked directly by establishing a uniform pricing board (UPB) which would set reasonable and appropriate rates to be charged by health providers for specific services within Ohio. The administrative costs of providers can be reduced if the UPB establishes standard forms and procedures by which health providers file claims with insurers.
2) The second problem (high administration and profit costs with insurance companies) can be attacked directly by requiring that 95% of total policy premiums be used for paying claims - reducing administration and profits to 5%.
3) Establishing reasonable provider charges and reducing insurance administration and profit costs will result in substantially lower insurance policy premiums. That will make health insurance affordable for more people. Many individuals and companies providing employee coverage will opt for better policies with lower deductibles. The PPACA mandates on people and businesses will further provide pressure for an increase in the number of insured. With more people insured with better policies, there will be less uncompensated care. But, low deductable health insurance will still be beyond the means of many. And, uncompensated health services, while reduced, will still be a problem. The final solution is to adopt an Ohio Enhanced Medicare System for All (Single Payer) similar to that used very effectively by all other industrialized nations. With everyone insured, the uncompensated care problem will disappear. The insurance administrative costs will be reduced to the 2% seen with Medicare or less. Provider administrative costs will be further reduced with a single consistent and reliable paying agency. Preventive care can be emphasized with a resulting decrease in overall health care costs.
How would this fit within the Patient Protection and Affordable Care Act (PPACA) (aka Obamacare)?
The first two elements (the UPB and reduced insurance administrative costs) should fit within the ACA without issues. Insurance policies could still be bought through the exchanges; they would just be better policies at lower cost. More individuals and businesses will choose insurance coverage rather than paying fines under the PPACA. The requirement for insurance companies to use 95% of policy premiums for claims would just be stronger than the ACA requirement (80-85%). Just as when states have a higher minimum wage than the corresponding federal minimum wage, the stronger requirement is not in conflict with the federal law.
The Ohio Single Payer would require an exemption from the PPACA. The PPACA provides for such state exemptions. Other states (Vermont which has already passed Single Payer, in particular) will have taken that course before Ohio, making that a more defined and workable path.
How would this affect the Ohio economy?
1) The lower employee healthcare costs would be attractive for industry, resulting in facilities relocating to and expanding in Ohio. Growth in jobs would result.
2) Lower healthcare costs would give people more disposable income to buy goods and services, with resulting higher sales, business expansion, and more jobs in Ohio.
3) Insurance companies would have to be more efficient and there would be a resultant reduction in the number of jobs for claims processors and claims deniers. Insurance companies would still make a profit (just more reasonable). They would have to remain in Ohio to serve Ohio policy holders.
4) With fees for services controlled and standard billing procedures imposed by the UPB, hospitals would employ fewer people to create confusing bills. Bill collectors and attorneys who currently hound patients would have less business.
5) When a Single Payer system is implemented, the insurance companies would be removed from the process. There would be a further improvement in claims processing efficiency and some loss of claims processing jobs.
Overall, there would be an increase in the number of jobs in Ohio.
Why not just go with Single Payer?
The most direct and complete cure for all of these problems would be an Enhanced Medicare for All System (Single Payer). It would be best to do that nationally. But, that cannot be achieved because the health care insurers and providers control Congress. An Ohio Single Payer system is proposed by Democrats in the Ohio General Assembly in each session. But, it never gets Republican support and cannot pass. As in Congress, the health industry lobbyists prevent the passage of anything which limits their profits. The only possible avenue is through an Ohio Constitutional amendment initiated by and subsequently voted in by the people.
My original plan was to propose an Ohio Constitutional amendment for a Single Payer system. In that effort I started with the 26 page Ohio SB 112 which was a Single Payer bill introduced by Democrats in the Ohio General Assembly. I soon realized that such an amendment would have to include almost all of SB 112. An amendment of that length cannot be passed. As we saw with the redistricting amendment (2012 Issue 2), the opponents of progressive amendments use any opportunity to create smoke screen of confusion for the voters. To be passed, any amendment must be simple, direct, and short. Additionally, there was the legal question of whether an amendment can subrogate the role of the legislature in taxing and funding matters.
The answer, as presented in the draft amendment, is to solve the problem by parts, establishing reasonable and uniform pricing for health services, limiting insurance administration costs and profits, and calling upon the state government to establish Ohio Single Payer. The first two items (health service pricing and insurance costs) can be established directly by an amendment. The amendment can demand that an Ohio Single Payer system be established by the governor and General Assembly but it will actually happen only if we, the people, can force our state government to be responsive to our needs rather than to the greed of the health care providers and insurers.
We can (with provider and insurance controls) reduce the costs of health care and make it available to more people. More people will be able to afford health insurance. Fewer people will be terrorized and forced into bankruptcy by health provider profiteering. Fewer people will die unnecessarily of treatable diseases.
This draft amendment ( Go to the draft amendment>) is supported by my draft plan for the campaign to pass it. Go to the plan. The efforts of many thousands of people will be needed if we are to make progress in establishing a humane health care system in Ohio.
This effort will need the help of thousands of us.