270,000 in Greater Cincinnati without health insurance is unacceptable

By Edwin Richard "Rick" Smith, III

Improve healthcare by creating a state administered group that all could join. Provide a sliding scale for Medicaid premiums as people earn more money, rather than cutting benefits entirely. Focus on preventative and alternative therapies. Provide programs to reduce smoking and obesity.

Your second reaction might be "Get a job!" Would it surprise you if I told you that 600,000 of these uninsured Ohio neighbors are working? It should.

Our system of healthcare is broken. I can't tell you that I have all the answers. But I can tell you that I will no longer allow this issue to be ignored. I don't want to wait until Ohio becomes like Texas, where 27% of all working adults do not have health insurance.

My plan addresses two issues:

1. The availability of health insurance
2. The cost of health care

Increasing Health Care Availability

This is an issue that is very important to me. In 1996 I left Cincinnati Bell Telephone to run a small company, Intracellular Imaging Inc. I continued my health coverage from CBT through the COBRA plan. In 1998, when my COBRA was set to expire, I tried to get individual health insurance for my family. I was turned down by two insurance companies! I could afford the premiums, and my family did not have anything unusual in it's medical history.

But then an interesting thing happened. Another employee said that his COBRA coverage was expiring as well. Once we had two people wanting coverage?yes, just two?suddenly we had a "group", and we got insurance right away. Today, insurance companies are denying coverage using the most lame (no pun intended) excuses - someone has severe acne in the house?someone had back surgery 25 years ago.

My solution is to give the insurance companies what they want?a group. My plan would create an insurance pool that any resident could join. Employers could also buy into the group. A handful of plans would be developed based on different premium levels. For example, a $75/month plan might have a $2,000 deductible, but cover 100% of charges above that (this is similar to what President Bush's Health Savings Account plan calls for). For $1,200/month, a family might be able to buy a plan like those Cinergy or Procter & Gamble offer. Insurance companies would be integral to developing these plans.

This plan is not single-payer, universal healthcare coverage. People must pay premiums, and insurance companies would provide coverage. All insurance companies would be invited to serve this group. However, they must offer all the plans developed by the State of Ohio, they must accept anyone, and they must cover all pre-existing conditions.

The Ohio State Senate has introduced a bill, SB 272, which does create a pool, but it is a high-risk pool only, and premiums are mandated to be at least 25% higher than the standard individual rate. This is a stop-gap measure at best.

There is another very important thing that my plan does. It gives all Ohio residents access to the prices that the insurance companies have negotiated. Many of you may not know that uninsured people pay the doctor or hospital's "rack rate" - the highest rate for services that anyone can pay! Those least able to pay are charged the highest rate! Take a look at your last insurance statement. You will see the amount that the doctor or hospital requested (that is the "rack rate") and the lower amount the insurance company agrees to pay. Uninsured people pay the higher amount, which is often double the insurance company negotiated rate. My plan would allow everyone to pay the lower amount, even if they have not reached their deductible.

There will likely be some citizens earning too much to pay for Medicare, but not earning enough to afford the lowest state plan premiums. For these people, I recommend changing the way the Medicare system works. It makes no sense to cut people off Medicaid when they cross the income threshold. This provides the wrong incentives - to either take their wages in cash (so it won't be reported) or to stop working. There should be a sliding scale of premiums, so that people are always better off earning more money. In the long run, this will help people wean themselves off the Medicaid program and save money.

Lowering the Cost of Healthcare

Just offering insurance to everyone does not address the root cause of our healthcare crisis - the rising cost of care. The cost of healthcare makes our businesses less competitive and it is straining the State budget.

38% of the Ohio state budget (including Federal funds) is spent on Medicaid, which is more than is spent on primary/secondary education and higher education combined. In FY 2000, just 28% of the budget went to Medicaid. From 2000 to 2005, primary/secondary school funding increased by 31%. Medicaid spending increased 71%! Unless we can control the growth of this healthcare spending, it will limit what we can spend on education, public safety, roads, and everything else we want the government to do.

The good news is that the last budget slowed the growth in Medicaid spending. The bad news is that it did it by denying coverage for people making between 90% and 100% of the federal poverty level. Therefore, now an individual working full-time with a non-working spouse and one child is no longer available for Medicaid health insurance if he/she earns between $6.79 and $7.53 per hour. What is the Legislature going to do the next time it needs to cut costs? Cut out people earning over $6.00 per hour?

Again, we are not addressing the root causes of our healthcare crisis. My plan will address costs in two ways - support less-expensive alternative medical techniques and increasing an individual's accountability for his bad habits.

1. Supporting Alternative Medicine - The use of alternative medicine - everything from acupuncture for pain relief to zinc to reduce the severity of colds - is skyrocketing in this country. Alternative Medicine is no longer just for Chinese immigrants and Voodoo doctors. Children's Hospital in Cincinnati offers a Holistic Health Service. Middletown Regional Hospital offers classes in Healing Touch and Guided Imagery.

The problem is that there are not enough clinical trials of alternative therapies and medications to inform doctors and patients when these may be superior and/or more cost effective treatments. I propose that the state budget fund clinical trials for the most promising therapies in Ohio's medical schools. Those treatments which prove to be effective should then be licensed and incorporated into the state-funded health system. I am confident that this investment will pay handsome returns.

2. Individual Accountability - No More Support of Bad Habits - Smoking and obesity are costing the state (and you) money. The Centers for Disease Control and Prevention estimate that the avoidable direct medical costs of smoking account for about 7% of all healthcare costs in the U.S. Obesity accounts for about 5.5% of all healthcare costs. If we apply these percentages to the Medicaid budget, Ohio spends $1.2 Billion each year because people could not stop smoking or keep their weight down. That is $105 out of your pocket for every person in your household!

I know that we will never get people to completely stop smoking or overeating. However, the state can no longer afford to pay their extra medical costs. Therefore, I propose that we establish penalties in the Medicaid and State-administered group plans for smokers and obese citizens.

Initially I had proposed capping spending for these individuals at the average amount spent on people without these problems. I know this sounds harsh... especially for a Democrat, but people have to realize that their individual decisions are costing society as a whole. I speak from first-hand experience. My father, who almost never went to the doctor, was diagnosed with small-cell lung cancer in April 2001. He smoked for most of his adult life. Medicare (not Medicaid) spent at least $400,000 treating him for a disease that took his life in September 2003. At the time, I said, "Do whatever it takes to keep my Dad alive." After I had a chance to think about it, I thought "My God, how many times is this happening around the country?", and I realized that as a society, we simply cannot keep paying these medical bills.

My physician friends have objected to this spending-cap idea, because tobacco can be more addictive than heroin, and many obesity cases are caused by hormonal, not behavioral, problems. HOWEVER, we must make it clear that to individuals that the State expects people to stop smoking and get in better shape. We should have a carrot-and-stick approach. We need greater funding for aggressive treatment programs, because this will ultimately save the State money. There also needs to be some penalty in healthcare coverage for people who either don't seek treatment or cannot change behavior.