A system that works

Whoops! You graduated. Among other things, that means itâÄôs time to go out and find some health insurance. Hopefully you get some through your new job, but if you have any pre-existing conditions youâÄôll be in for a serious uphill battle. At this point, more than 40 million U.S. citizens donâÄôt have any health insurance at all, and untold scores more donâÄôt have enough to actually cover them if something goes wrong. And since we rely mainly on employer-based health insurance, the fact that weâÄôre dealing with the highest unemployment rate in five years means plenty more are now operating without a net. John McCain seems to think that thereâÄôs one main problem with our healthcare system right now: people go to the doctor too often, so everything ends up costing too much. And his plan would indeed help corral rising health costs. He would propose giving every person a $2,500 tax cut (or $5,000 for families) to be used for buying health insurance âÄî his website calls it âÄúeffectively cash.âÄù Whatever you donâÄôt spend, you get to keep. This entire idea raises the question: What exactly is the purpose of a healthcare system? If its whole goal is to be cheap, then McCainâÄôs plan is excellent. If the goal is, instead, to actually provide quality care to people who need it âÄî and I would hope that is what weâÄôre really shooting for âÄî then McCainâÄôs tax credits would likely make things even worse. Figuring out how many people have health insurance, but not enough to cover themselves, is a bit difficult; one recent study pegged the number at 25 million. The people are often just as at risk as those who donâÄôt have insurance at all âÄî because of their high premiums they avoid regular doctor visits, then when a major catastrophe strikes they are unable to pay. And instead of dealing with the problem, McCainâÄôs campaign would encourage even more people to under-cover. By making that tax cut fully refundable âÄî anything you donâÄôt spend gets put into an individual health savings account âÄî McCain would set up a fundamentally perverse system of incentives. The prudent thing to do would be to purchase cheap insurance with a high deductible, go to the doctor as little as possible, and try to fill the savings account so that a major medical emergency doesnâÄôt lead directly to bankruptcy. And thatâÄôs fine if we care only about cost, but if we actually want a health care system that keeps people healthy we need to make some fundamentally different changes. ObamaâÄôs plan, overall, would do a much better job of managing our health care problems. He operates from the assumption that if health care is available to people they will buy it. The core of his plan is to first outlaw the practice of denying coverage to people with pre-existing conditions. And make no mistake about it âÄî thatâÄôs an important step in the right direction. With our current system, people who most need health care are those most likely to be denied coverage. ThatâÄôs deeply messed up, and points to the deeper issue of our current system: it sets up exactly the wrong incentives for everyone involved. From the insurance companiesâÄô point of view, it makes sense to attempt to cover only the healthiest customers. Every time they have to pay for somebodyâÄôs medical care, thatâÄôs a chunk out of the bottom line. So they either deny the ill coverage or charge them astronomical rates. Sick customers arenâÄôt profitable. And for customers, higher co-pays mean it becomes prudent to visit the doctor as little as possible. We should be trying to encourage just the opposite: regular check-ups and the habit of dealing with medical problems early on before they become absurdly expensive to treat. And we need to incentivize the insurance companies in the same way: Make it profitable to actually provide the best care to the most people, instead of bleeding money from the healthy and ignoring the sick. But ObamaâÄôs biggest failing is over the issue of individual mandates: Will the government require everybody to buy health insurance? Obama says that if coverage is available and affordable, everyone will sign up with or without a mandate. But, curiously, his plan does include a requirement that all children be signed up for coverage. Does that mean that there are parents out there who can be trusted to buy insurance for themselves but not their kids? Getting everyone signed up, with or without mandates, is part of the solution to the issue of cost. If only the currently ill paid into the system, it would go bankrupt immediately. Instead, we need to make sure that risk is pooled among as many people as possible. By doing so, we can begin to build a self-sustaining system. The most important two people for health reform are probably Sens. Ted Kennedy and Hillary Clinton. Kennedy, in his touching speech at the Democratic National Convention, made it clear that his one goal of his life is to make sure that all people will have âÄúdecent, quality health care as a fundamental right and not a privilege.âÄù And Clinton, who has long been devoted to health care, can be the other force in the Senate. Perhaps then, graduation wonâÄôt be quite so scary. John Sharkey welcomes comments at [email protected].