John Mackey, the founder of Whole Foods has ticked off a bunch of his lefty, granola-crunchy customers with a Wall Street Journal op-ed offering a set of free-market health-care reforms as an alternative to the massive expansion of government being called Obamacare.
Mackey lists eight proposed reforms to current laws as well as a diagnosis of why we’re in such dire straits over health-care costs in this country. The eight reforms are:
- Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs).
- Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits.
- Repeal all state laws which prevent insurance companies from competing across state lines.
- Repeal government mandates regarding what insurance companies must cover.
- Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year.
- Make costs transparent so that consumers understand what health-care treatments cost.
- Enact Medicare reform.
- Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren’t covered by Medicare, Medicaid or the State Children’s Health Insurance Program.
See the whole article to read his explanation of each of these points. I especially like the first suggestion, which is what they do at Whole Foods. They pay 100% of the premiums on high-deductible insurance for their full-time employees (30 hours or more) and then up to $1,800 in health-savings accounts (HSAs) which the employees can spend on health-related expenses, including the deductible for the insurance, which is $2,500. Even with that $1,800 the company is saving money over traditional insurance. In addition, the HSA unspent balances rollover from year to year so the HSA balance could quickly reach $2,500 depending on how the employee spends money. Yet even without the rollover, there is only a $700 gap between the HSA and the deductible.
Melanie and I have been discussing this, especially since the claims and explanations of benefits and bills have been coming in for Melanie’s pregnancy, Benedict’s birth, and subsequent care. We’re not ones to rush to the doctor or emergency room at the drop of a hat, but it occurs to us that out-of-pocket expenses would deter more people from getting expensive treatments for routine and minor problems. Insurance would be there only to cover the cost for unusual and expensive ailments.
Meanwhile doctors could afford to charge their patients an out-of-pocket price they can pay. When we took Sophia took her pediatrician for treatment of her nursemaid’s elbow, we saw the doctor for all of about 5 minutes while she popped it back into joint. And yet our health insurer was charged $160! I don’t necessarily blame the doctor. Melanie—who once worked as an office manager for a psychiatric practice—said it’s common for doctors to submit higher prices to the insurers because the insurers are aggressively pre-disposed to rejecting claims or paying only a portion of what was asked. It’s a dysfunctional system. And because it’s so comprehensive and expensive, it encourages people to use it for relatively trivial needs.
If our home insurance worked like our health insurance we’d file a claim every time a light bulb needed changing or when the toilet stopped up or the exterior needed painting. Sounds great until we relize how quickly the home insurance system would collapse under the financial weight of all those claims.
Mackey makes the point as well that while we often hear people speak of the “right” to health care, what we actually have is a right to access. Nowhere in Christian moral principles or in the US Constitution is there a right to free or essentially free health care for everyone regardless of ability to pay. What we have instead is an obligation, you and me, to provide in Christian charity for the poor among us. This is what Catholic hospitals and charities once did so well, but even they have become distracted by the diseased and dysfunctional system we have now that does more to serve the interests of health-care executives, the politicians they fund, and the union bosses pandering to their membership than it does to serve the average American.
I just wish there were more CEOs and influence-wielders like Mackey willing to step up to the plate and offer a chance at real reform.
Barney Frank’s Pollyanna attitude
To add a bit to Mackey’s call for Medicare reform, Massachusetts Democrat Congressman Barney Frank spoke to the Boston Herald about Obamacare town halls the other day and came up with this defense of the proposed medical-industry reforms:
“I have been reading recently about denunciations of government-run health plans and how they will lead to socialized medicine and the end of choice of medical care. They were all comments about Medicare in 1965. We had this debate (about Medicare) 44 years ago and I think it’s proven to be very good.”
Oh really, Barney? How good is Medicare? How well is it faring? Well, the experts are predicting that it’s headed for bankruptcy in 2017 at last check. Oh yeah, Barney, it’s great. Just like when you told us in 2003 that Fannie Mae and Freddie Mac were not in crisis and that, in fact, they should expand their programs to grant mortgages to people who couldn’t afford them. That one worked out wonderfully too.
As usual, you’ve found the root of the problem. That IS the problem: The dr/insurance relationship is so dysfunctional the rates are outrageous. What if there were insurance ONLY for catestrophic events? What if doctors had to compete for our dollars? Wouldn’t we, as consumers go the the dr that not only gives us good care, but that we can afford?
This idea that insurance is a “right” is so out of wack. It isn’t a right, but obama keeps saying it is, so good people find themselves in a false quandry : Well we don’t want to pay for it, but what about those poor folks who can’t pay for it? Shouldn’t the gov’t take care of them?”
No. Charities is the answer, not government. I am all about caring for the poor, widowed, orphaned, etc, but not through our secular government. No stinkin’ way. We need to care for our brothers and sisters, but not as a society through our tax dollars, but as individuals giving our tithe to the Church and charities.
This is an excellent article and I’m glad that it’s drawing so much attention. I especially appreciated that the Whole Food’s HSA rolls over. Encouraging savings—what a concept! With many HSAs, you have to closely estimate how much you’re going to deposit, or you’ll lose it at the end of the year (which is why I’ve never bothered to start one.)
We won’t have true reform with attention to subsidiarity. If people were spending their health-care money as they saw best, and didn’t need an insurance company’s approval, I think we’d see many more creative offerings of services people really need—like drop-in mini-clinics and house call services.
Right now charities are struggling to stock the soup kitchens, do you really think they will be able to cover medical expenses for the poor as well? I’d sooner see social security disappear than medicare. What’s needed is some kind of reform. Theoretically at least govt competition in the marketplace could be a good thing. Medicare is a legitimate govt function if ever there was one.
HSA’s that don’t roll over are rediculous and help to encourage problems; I’ve always wondered who participates in programs like that? Sounds like what Mackey is doing is more than fair.
Government doesn’t compete in a marketplace. it sucks the air out of the room so that it’s the only player left.
You’d have to make a case that Medicare is a legitimate government function. I say that it’s not.
And with the right reforms of the regulation of charity and health services there would be enough money for charities to care for the people who really need it. Right now government regulations make that nearly impossible.
The Catholic charities don’t appear to be complaining that regulations are strangling them, they are complaining that the govt isn’t making enough money available to charities. If the govt doesn’t pony up, and the people can’t cover the bill, then the poor will be left to rot.
Because most Catholic charities have forgotten the difference between charity and government welfare. Charity is an act of love. Government handouts put a middleman in between the giver and recipient. It used to be that when we had poor people in our neighborhoods, the people of the neighborhood and the parish took care of them. Now we turn to government bureaucrats and wash our hands of them.
If government removed the twin burdens of overregulation and overtaxation, there would be a lot more money available to give to charities.
Once again, when government gets involved it sucks the air out of the room.
Sorry, but that sounds like an excuse to avoid one’s Christian obligation to charity. Most churches don’t come anywhere near meeting the tithe. The tithe is a percentage figure, so there’s really no excuse for not meeting it. If church goers can’t afford to be charitable within their own communities, how many people do expect will be charitable to the society as a whole?
When nearly 50 percent of the average family’s income goes to property, state and federal income, excise, sales, and other taxes is it any wonder people say to themselves, “Let the government do it”? Especially when the liberals are eager to accrue more and more power into government hands.
Out of the remaining 50 percent of income, people pay 20 percent of their total income for housing on average, and 10 percent of their total income for food, leaving 20 percent of total income for things like car payments, clothes, gasoline, appliances, heating fuel, electricity, water, home repairs, and so on.
Does that give an excuse to people not to give their first fruits to God? No, but it shows the pressures on the average family to make ends meet and that if we reduced the tax burden while educating people that charity is not a government function then we’d start to see a major difference, not just in how health care is run, but in how people in society as a whole treat one another and especially the poorest among us.
I just wanted to say that I am a Whole Foods customer and believe what John Mackey said about health care reform was right on.
Many of my friends who shop at Whole Foods do it because of the food and not some hand holding exercise supporting a political agenda.
If more people understood about business and health care they would say less about Johns’ comments.
One small fact: The third largest employer in the world is the UK Health Care System. The majority of the people on staff are managers, accountants and clerks, not doctors, nurses and other health care professionals. It is a failed system.
The Chinese Red Army is still the number one employer in the world.