Mosler Health Care Proposal
Posted by WARREN MOSLER on March 2nd, 2009
Mosler Health Care Proposal
- Government funding for a full time, $8 per hour job that includes full federal health care coverage for the worker and dependents.
This immediately triggers market forces that will result in all businesses providing health care benefits as a matter of competition. - As a matter of economics and public purpose it is counter productive for health care to be a marginal cost of production.
No economist will disagree with this. Unless going to work makes one more prone to needing health care, making the cost
a marginal cost of production distorts the price structure and results in sub optimal outcomes.
Therefore government should fund at least 90% of health care costs paid for by businesses. - Long term vision subject to revised details:
- Everyone gets a ‘medical debit card’ with perhaps $5000 in it to be used for qualifying medical expenses (including dental) for the year.
- Expenses beyond that are covered by catastrophic insurance.
- At the end of the year, the debit card holder gets a check for the unused balance on the card, up to $4,000, with the $1,000 to be spent on preventative measures not refundable.
- The next year, the cards are renewed for an additional $5,000.
- Advantages:
- Doctor/patient time doubled as doctor/insurance company time is eliminated.
- The doctor must discuss the diagnosis and options regarding drugs, treatments, and costs with the patient rather than an insurance company.
- Individuals have a strong incentive to keep costs down.
- Doubling the time doctors have available for patients increases capacity and service without increasing real costs.
- Total nominal cost of approx. $1.5 trillion ($5,000×300 million people) is about 10% of GDP which is less than being spent today, so even when catastrophic costs are added the numbers are not financially disruptive and can easily be modified.
- Eliminates medical costs from businesses, removing price distortions and medical legacy costs.
- May obviate the need for Medicare and other current programs.
- Eliminates issues regarding receivables and bad debt for hospitals and doctors.
- Eliminates the majority of administrative costs for the nation as a whole for the current system.
Patients can ‘shop’ for medical services and prices as desired. - Disadvantages: Those more in need of the rebate at the end of the year may elect to forgo treatment beyond the $1,500 not subject to the rebate.
- Doctors may be able to more easily convince patients of unneeded treatments and expensive drugs vs insurance companies.
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March 2nd, 2009 at 11:54 am
The health care industry has got a leach on it just like the monetary system has the FED, it’s called the Insurance Industry.
I recently saw a pole of doctors that said over half wishes they would have chose a different profession.
The cost of schooling is stopping many skilled people from entering the field also.
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March 2nd, 2009 at 12:19 pm
Yea, insurance industry is just needless friction to the delivery of health care. It’s not “insurance” anyway. It’s just third party payer.
I can’t understand why our current system continues to have support among the public.
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March 2nd, 2009 at 12:48 pm
Congress is what 80% lawyers, how would they live so high without ambulance chasing? You don’t really expect them to blow up the legal/insurance industry that is thier lifeblood do you?
Sending warren to washington would be a waste, either he would be corrupted or marginalized. Why isn’t he talking about changing the system that crushes good men into greedy crony pigs?
Warren I want to follow maslow’s hierarchy, I want to do big great things that take 20 years of study maybe – biotech research to give us all immortality and make your heart beat 100 years. What about free healtcare for students? If I have to go work picking strawberries to get that free healthcare you are talking about – I am left with no choice but to put down my biology textbook and go into the strawberry field.
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March 2nd, 2009 at 5:37 pm
I am left with no choice but to put down my biology textbook and go into the strawberry field.
I KNOW, FOREVER…
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March 2nd, 2009 at 6:14 pm
More proof how bad it is out of controll! Ever heard of the Gulf of Tonkin? Here it is all over again only NUCLEAR!
http://www.youtube.com/watch?v=NTFaMK2dvzg
We have to stop the STUPIDITY
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September 24th, 2009 at 11:42 pm
Your $5,000.00 debit card is similar to medical savings accounts. Would you entertain the idea of medical savings accounts funded by tax credits, not deductions? This way the money is seen by the tax payer as keeping his own money and not receiving something from the government. A new government department to account for the debit cards would not be necessary, the IRS will do the accounting. Also, they will have the full $5,000.00 every year not $4,000.00.
You mention the purchase of catastrophic insurance, I presume it will be purchased from insurance companies, no? Will the insurance companies be allowed to sell across state lines?
I have listened to recordings and watched videos by you and never have I heard you speak on the health care issue, only finance. I think the number one topic now is health care would you speak to that issue the next time you are speaking publicly?
Ciao Larry J.
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November 3rd, 2009 at 6:07 pm
http://un-thought.blogspot.com/2009/09/healthcare-compromise.html
My Health-care Compromise
It is a compromise between advocates of government provided health insurance and those against:
The state would provide insurance to all Americans but the annual deductible on the insurance would be equal to the family’s trailing year adjusted income minus the poverty line income (say $25,000 for a family of 4) + $300…
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November 3rd, 2009 at 6:40 pm
My proposal is also designed to help prevent abuse of the system by giving cash back if you don’t use it.
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December 3rd, 2009 at 2:06 pm
Sorry for the late hit, but your insurance proposal reminds me of the healthcare section of Elliot Richardson’s “Mega Proposal” when he was Nixon’ HEW Secretary. The government would replace Medicare and private insurance with a federal income-adjusted catastrophic insurance plan (with subsidies for the poor and the ability for everyone else to buy private Medigap coverage).
Unfortunately, Richardson went to the Pentagon in 1973 and Cap Weinberger took over at HEW and dropped Richardson’s plan. So in 1974, Nixon pushed an employer mandate to buy private insurance (very similar to Obamacare in fact) and Ted Kennedy pushed Medicare for All. Actually, Kennedy and Ways and Means Chairman Wilbur Mills were willing to compromise with go to Medicare buy in “public option” (to use current parlance) but Nixon and Mills were both bounced from power for their respective scandals before a deal could be cut. Its a pity they didn’t just agree to endorse the Administration’s own catastrophic insurance plan.
The Mega Proposal section on health insurance starts on page 23 of the linked pdf.
http://www.eric.ed.gov/ERICWebPortal/recordDetail?accno=ED080148
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December 13th, 2009 at 10:00 pm
If this administration wants to give the US Dollar strength they could back the Medicare buy-in plan along with Congress.
Washington Post December 11th, 2009
” Pelosi backs Medicare buy-in plan in Senate health-care deal…
Speaker says expansion has appeal, but she still prefers a public option ”
By endorsing the medicare buy-in it keeps free market health care plans costs in check. It meets most of the administration’s criteria for a fraction of the cost. It also keeps the unemployment rate in the health care sector unchanged.
The administration’s criteria for reform are listed below:
‘
* Reduce long-term growth of health care costs for businesses and government
* Protect families from bankruptcy or debt because of health care costs
* Guarantee choice of doctors and health plans
* Invest in prevention and wellness
* Improve patient safety and quality of care
* Assure affordable, quality health coverage for all Americans
* Maintain coverage when you change or lose your job
* End barriers to coverage for people with pre-existing medical conditions ‘
Whitehouse.gov/issues/healthcare
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June 27th, 2010 at 6:08 pm
Here is the way I see it:
Fact/Assumption: We currently have a health care monopoly or ogilopoly or whatever: big health insurance plus big pharma.
Problem: People think today’s systems is somehow “free markets” for “governemnt” health care is someone “socialist”.
I know of no other way to break a massive monopoly without government regulation and takeover?
The Ron Paul / Libertarian true free market health care would be great but 100% impossible in implement without an initial government takeoover to break the monopoly.
Will someone that considers themselves right-wing / republican please explain in detailed steps how you go from today to “free market health care”
For example, I would like to start my own hospital, train and hire my own doctors to complete with the American Medical Association. I would like to bring innovation in medicine and re-define the meaning of “doctor” how do I do that? how do you get there from today withouth massive goverment takeover?
Any policy that breaks this monopoly will be a huge benefit for Americans. Universal health care, Mosler plan, Obama’s original plan prior to being watered down by insurance lobbiest.
I hold out some hope that Obama’s plan as it is not will allow for inroads into the health care monopoly.
Many states are taking on the insurance monopolies in thier own way, which is also hopefull. California has it’s own universal health care plan in the works.
Universial Health Care = A Jobs Boom.
50% of people I know are working in some corproate job simply because it gives them and thier families access to health care. Otherwise, they would working in much more productive small business environments or building thier own businesses.
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January 13th, 2011 at 12:28 pm
A couple of comments.
I love the idea of HSAs. We have one and it makes us much better consumers.
I love the idea of co-pays. It makes up pay attention to the costs.
I love the idea of looser pay and damage limits on malpractice claims. The amount of money that goes to defensive medicine tests is unacceptable. I see all sorts of numbers, but it is material. Besides the actual costs it causes friction. Doctors can be afraid to treat unless all bases are covered.
This is a knotty problem and I would like to see Federalism try to find solutions. I would allow a lot of leeway for States to experiment.
I think there should at least three ideas tried more fully. 1) catastrophic plans, 2) HSAs (as you point out), and 3) relatively un-regulated group buying co-ops.
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John O'Connell Reply:
October 26th, 2011 at 4:35 pm
@EconRob,
Me, too.
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September 11th, 2011 at 4:01 pm
I don’t like so-called Advantage 3, as I fear Disadvantage 1 will be worse. I don’t know of any evidence that a significant number of people choose to visit their doctors rather than enjoy their leisure. As one doctor said to me, “Most people don’t come in until they can’t stop the bleeding.”
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WARREN MOSLER Reply:
September 11th, 2011 at 7:00 pm
understood
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October 26th, 2011 at 4:53 pm
“As a matter of economics and public purpose it is counter productive for health care to be a marginal cost of production.”
Then simply take the employer out of the picture. Eliminate the employer’s tax deduction for health insurance, let wages rise to compensate for the loss of the benefit, and let the employee pay for his own insurance and deduct it from his taxable income.
Everyone comes out even, and the “counter-productive” is gone.
Lots more choice for the employee, too, and eliminates the subsidy to the “2nd” employer in the family, who doesn’t have insurance costs, but pays lower wages anyway just because it is available.
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WARREN MOSLER Reply:
October 27th, 2011 at 4:03 am
i like my proposal a lot better
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November 5th, 2011 at 8:08 am
[...] to private sector employment. 4. See my universal health care proposals on this website (http://www.moslereconomics.com/2009/03/02/mosler-health-care-proposal/). 5. See my proposals for narrow banking, the Fed, the Treasury and the FDIC on this website [...]
December 27th, 2011 at 7:23 am
I have an idea but am not sure if it is good or bad, so here goes.
Why not entice the foreign government holders of treasuries to put their dollars in a (medical)superfund that earns a higher rate of interest and pays for universal health care, as opposed to just paying them interest for no real useful purpose? If the dollars to pay their interest can be created at will so to speak, why not create the interest payments to pay them for funding our citizen’s health care(Medicare for all)?
Or would that be pushing it too far in the way that we take advantage of China, which is really put upon the their poor and oppressed citizens there?
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WARREN MOSLER Reply:
December 27th, 2011 at 9:23 am
you read ‘the 7dif’ yet?
or ’0 is the natural rate of interest’ also on this website?
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December 27th, 2011 at 3:50 pm
Thanks for the quick reply. No, I haven’t yet because I cannot open pdf files because of broken files. But, I get your answer that it cannot be done with something that technically/actually doesn’t exist in reality, just the data entry world. I kind of figured that but without that knowledge, that was the basis for my question.
I have been so excited about the “enlightening moment” where economics and the monetary system has finally made some sense that I have got the cart ahead of the horse. It’s similar to the day that algebra went from symbols and numbers to making sense, but I am still in the very early “grasshopper” stage.
Again, thank you.
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WARREN MOSLER Reply:
December 28th, 2011 at 12:20 pm
Read the 7dif yet? looking fwd to your response!
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December 27th, 2011 at 5:19 pm
I would like the priveledge to re-phrase the question. If the citizens of this country are niave or gullible enough to beleive that SS and Medicare are going broke and that we “borrow” money from China for our government to continue existing, maybe they would also beleive that “Medicare for all” could actually be funded this way and politicians could sell the idea because of the way it is funded/constructed.
A little too much or unethical?
* Disclaimer: I reserve the right to willingly concede my inabaility to make a reasoned argument AT THIS POINT IN TIME, due solely because of my inferior knowledge of the subject at issue, and of the accompanying background of such.
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