HEALTH CARE IMPROVEMENTS
June 14, 2002 - WAR REPORT NUMBER 24-2002
This is the third in a series of WAR Reports adapted from a report by the Council for Affordable Health Insurance (CAHI) titled, "Helping the Uninsured Who Need it Most." The report appeared in the Council's Issues & Answers publication dated March 2002.

The authors soberly concluded with a most unusual, but refreshing and challenging opinion. They wrote, "Creating a variable tax credit system is not without problems. For example, it would give taxpayers an incentive to underreport income to receive a larger subsidy. But a tax credit would be the most efficient way to assist those who do not get health insurance through an employer. And a fixed tax credit is too inflexible to help workers with very low incomes or preexisting conditions."

I agree that the creation of a variable tax credit system would be the most efficient way to assist many who do not get health insurance through their employers. However, will this be just tinkering around the edges of health care or merely manipulating the financial aspects in an effort to control the spiraling cost?

Rational buyers of health care -- which can include expansion of Medicare and Medicaid -- should look at large corporations including large health insurers to see how they do it. Generally, they purchase a "stop loss" insurance for catastrophic illnesses or injuries and become "self insured" for routine health care. Another alternative is to fund employee Medical Savings Accounts (MSAs). This would be a rational, cost-effective system. Why? One reason only; it is the least expensive, most easily administered system. If it works for insurers, it will work for the rest of us.

Tinkering around the edges or managing the financial aspects of the system by politicians or bureaucrats won't do it. Adopting market-driven principles will do it only if the politicians will try. Many will say that they have tried and it won't work. The reason it won't work is that the democrats have loaded up many proposals with burdens that guarantee the proposal will fail. A classic example is Medical Savings Accounts (MSAs). Limited space precludes me from listing all the items in the MSA laws and regulations that is designed to insure failure of the concept.

Stay tuned! Why? Because I tell it like it is and it's your money.

God Bless America.