Netherlands Approach to Health Insurance: Would it Work in Ohio?

The Netherlands has adopted a very intriguing approach to health insurance. First of all, it uses private insurance companies. Second, it requires all citizens to get health insurance. Third, it makes all health insurance companies accept all applicants. Fourth, it makes all health insurance companies offer the same basic policy with the same benefits. People can buy supplemental insurance, but the same standard policy with the same benefits has to be offered to everyone. You can read more about the Dutch approach to health insurance here.

One thing that should be kept in mind is that the Netherlands is bigger than the State of Ohio, but not a lot bigger. Ohio has a population of 11 million plus while the Netherlands has a population of 16 million plus. The advantage of such an approach is that it people who have health insurance would probably be able to keep such coverage, increasing their comfort level with the concept. Another advantage for doctors and other providers of health services is that there would be a universal insurance policy with a standard amount of benefits. Consumers wouldn't have to worry about being denied coverage for pre-existing conditions.

Another advantage of this program is that insurance companies would be forced to compete with each other by becoming more efficient. Right now there is a big difference between the administrative costs for private insurance companies and Medicare. The administrative costs, as represented by the percentage of health care dollars going to such costs, are much higher for private insurance companies than for Medicare.
The change would be politically difficult, but probably easier than establishing a state-run insurance program. Democrats should think about adopting the Dutch model as the model for Ohio.

Ralph Regula Backs Health Insurance Companies Over Uninsured Children

Democrats in the House passed a bill that will increase the number of children covered by the States Health Insurance Program, (SHIP), while decreasing the amount of money paid to Medicare HMOs by the Federal Government. Republicans opposed this bill because (1). they don't think that the Federal government should be covering more uninsured children and (2). they think that private insurance companies should get Federal money even when, as in this case, the Federal Government pays 12% more for these private Medicare HMOs than it pays for traditional Medicare coverage. In short, as Paul Krugman recently wrote, they believe that insuring children is less important than helping private health insurance companies. Krugman was right when he called that philosophy "immoral."

Representative Ralph Regula, (OH-16), backed the Republican position and voted against expanding access to health insurance for America's children. Congressman Regula, we are sad to say, put the interest of private health insurance companies ahead of uninsured children. Think about that if he runs for re-election in 2008.

A State by State Approach to Universal Health Care

Earlier this month we posted an entry about the efforts of SPAN Ohio to create universal health coverage in Ohio based on a single payor system. This effort joins efforts in other states to achieve universal health coverage in the absence of any effort by the Federal Government to achieve this goal. These efforts are usually presented by the media as being evidence of some sort of "failure" by the Federal Government. There is another way, however, to look at such efforts.

One of the problems with the Clinton health insurance plan of the 1990s was that it tried to impose one structure on all of America. Quite frankly, such an approach has a multitude of problems. This is a very large and diverse country. The states range widely in population, culture, and demographic make-up. A plan conceived in Washington to cover every state is bound to be resisted since there is no guarantee that such a plan will work in every state.

Here's a different approach: why not advocate a plan that uses the taxing power of the United States government to achieve this goal without mandating any particular plan? Here's how this would work: the United States government would reduce the income taxes for the residents of any state that reaches the goal of universal health coverage for all its residents. How the states get there is up to them. Whether they want to get there is up to them. The Federal Government would develop the yardstick and apply it to the states. It would also publish tax tables showing the states that are getting a break on their taxes.

What this would do is put pressure on state legislatures and governors to come up with universal coverage. It would be very hard for Republicans to oppose politically and it would stop liberals and Democrats from having to work out the detail of a plan while trying to win elections.

Is it a perfect solution? No, but that's not the choice. The choice is between the status quo which leaves an increasing number of Americans uninsured and a plan that increases the number of insured Americans.