A few thoughts on Sebring’s health care plan

Back in January, I noted Republican Congressional candidate Dan Sebring, who’s challenging Democratic Rep. Gwen Moore in the fourth Congressional district, didn’t have much in the way of a health care reform plan, other than proposing a three-tiered health care system:

I would like to see a three tiered health care system. One where participants would take and annual “means test” to determine their financial ability to contribute to their own health care costs. Families and individuals living in poverty and haven’t the ability to contribute to their own health care costs would not have to pay the cost of health care.

Families and individuals who it has been determined by the “means test” to have the ability to make a co-payment towards the cost of their health care would have to make a co-payment towards the cost of their health care based on their ability to pay. Families and individuals for whom the “means test” has determined can afford to buy private health insurance would be required to either buy their own health insurance or pay the full cost of their own health care. To participate in this health care system you must take the “means test” and you must be a legal resident. While no one would be refused medical treatment, non-participants would be required to pay the full cost of their own health care.

Since noting in January that Sebring’s health care reform plan lacked any substantive details, it’s been pointed out to me that Sebring has now adopted a health care reform plan written by Nathan Sass, who just happens to be an employee of health insurance company Wellpoint. Sebring’s new health care reform plan has 15 points, and while I’m not going to touch on each of the 15 points, there are a few I believe are worth picking apart.

1. Medical Insurance companies will convert to Medical Financing companies.

And no doubt these new Medical Financing companies will be as motivated by profit as they were when they were health insurance companies, so no doubt they’ll find ways to turn a profit at the expense of their customers.

5. The Finance Company charges a minimal interest on the balance (i.e. Prime plus) and the debt is legally non-dischargeable in the same manner student loans are today.

The debt is legally non-dischargeable…in other words, individuals or families who accumulate medical debt won’t be able to erase that debt if they file for bankruptcy, putting them on the hook forever, especially if they’ve already used up their “once per lifetime” repayment of that debt as noted in point 11 of the Sass/Sebring plan. No doubt health insurance companies would love this point in the Sass/Sebring plan.

7. Finance Companies can leverage their in force agreements with providers and offer their members the ability to use their “volume discount pricing” if they so choose.

As my wife (who read the plan with me) asked, what’s to stop providers from simply opting not to accept the particular insurer/finance company’s plan? How would the medical finance companies have any more leverage than insurance companies have right now?

10. Recognizing the moral imperative that no person should be faced with massive debt when entering or leaving this world, the Federal Government agrees to assume the costs for child birth and for catastrophic care for specified conditions (i.e. Cancer, HIV/AIDS, etc.).

This is certainly a great idea, but here’s the problem: what about all those costs for treatment that doesn’t include childbirth and catastrophic care for specified conditions? The cost of medical treatment for even non-catastrophic situations can be steep, as evidenced by my wife’s recent trip to the emergency room for a broken ankle/torn ligament, a trip that ended up costing several thousand dollars for a visit by a doctor, a few x-rays of her ankle, and a prescription for pain medicine. Given that our family visits the emergency room a couple of times a year, we’d incur several thousands of dollars of medical debt per year under the Sass/Sebring plan, leaving us with minimum monthly payments that would continue to go up and up and up, and no doubt that debt would take just as long to retire as credit card debt if only the minimum monthly payment is made.

11. Low income individuals can qualify for Federal subsidies on their membership costs, and a limited once per lifetime repayment of incurred debt by the Federal Government should they chose to exercise it. This would be the only forgiveness of such debt allowed by law.

While I certainly agree individuals and families with lower incomes would need subsidies to help cover their membership costs, I can’t help but wonder what happens when they’re unable to pay their monthly payments if they incur health care costs? If they need a subsidy to cover their yearly membership cost, they’re not likely to be able to make monthly payments towards whatever costs they “charge,” and while a one-time debt forgiveness plan is great, what happens after that? If these cards you’d give to folks to charge their health care costs are run like credit cards, once folks hit 60 or 90 days overdue on their payments, they’ll be sent to collection, and if they’ve already used up their once per lifetime repayment, they’re essentially screwed. What’s more, as noted in point 5, this debt would be non-dischargeable, meaning individuals and families would be stuck with the debt forever if they had already used up their “once per lifetime” repayment of debt by the government.

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8 thoughts on “A few thoughts on Sebring’s health care plan

  1. There are two parts to any plan, strategic and tactical. Your argument is flawed as you’re trying to pick apart the tactical when the only thing you have posted is an overarching stratgic plan – and one that is based purely on speculation that Sebring is referring to or planning to use Nathan Sass’ plan. You make assumptions to a few of these points without any valid reference and using pure speculation. Perhaps you should ask what the tactical approach to his plan is then make comments about it.

    For example, #5 claims the debt is non-dischargeable. Nathan Sass may make this argument, but where is this on Sebring’s site? It’s nowhere. All debts are dischargeable except for federally backed debt like student loans. This would require another re-write of the bankruptcy codes which I don’t see happening any time soon.

    #11 regarding subsidies, you make an assumption again that low income earners will have to bear the full cost of their services, whereas this is not mentioned anywhere on Sebring’s site. If the strategy is for low income earners to receive a subsidy, wouldn’t it be logical these same people would be billed on more of a sliding scale to the point if their income is low enough that they wouldn’t incur any costs for services?

    Stop making assumptions like most of the other idiots in this city. Get off your ass, make some calls or send an email to find out both the strategic and tactical, then make comments when you have all the information. Parts of your blog are beginning to make you look incredibly ignorant. But I will continue to come back because you and your readers do at times make valid points on topics, and are good for an occasional laugh.

    And finally, regarding your wife’s ER visit for a broken ankle…there is a website called Vimo.com – found it in Mens Health magazine. There is a section that lets you look at what hospitals charge for services, and a section that shows what people have negotiated prices down to. Scroll to the bottom where it says ‘Compare Hospital Procedures’ and look up anything. It’s good to have this type of information when dealing with anything medical, especially if you have a high deductible of no insurance. In short, people have to stop looking at the black and white numbers of a medical bill and start thinking of or using ways to save money on this stuff.

    1. Tom, here’s a link to Sebring’s health care issues page…scroll down to point #5, where it clearly states any medical debt would be legally non-dischargeable.

      http://www.dansebringforcongress.com/HealthCare.html

      As to your point about my wife’s ER visit, something like vimo.com would be great, but my HMO doesn’t allow me to go to any hospitals but those in their network, so it’s not as if I can “shop around.”

  2. Interesting posting, considering I provided Zach an extensive explanation of several of these concerns via email. The exchange is posted at http://thedinnertable.blogtownhall.com/2010/03/15/email_exchange_with_zach_from_blogging_blue.thtml

    Zach, to say the least, I am disappointed in your honesty.

    You intentionally disregarded major points in the plan as it suited your needs. You also imply that my place of employment has any bering on this at all. It does not, and I do not speak for Wellpoint. I am only leveraging knowledge gained while working in the industry, something you, Russ Feigold, Nancy Pelosi and President Obama lack in spades.

    Let’s take your issues one by one, shall we?


    And no doubt these new Medical Financing companies will be as motivated by profit as they were when they were health insurance companies, so no doubt they’ll find ways to turn a profit at the expense of their customers.

    Umm, yeah. These companies will be profit driven, as are hospitals and doctors right now. (Not for profit means no shareholders, not that they operate at a loss, BTW.)

    Is your point that medical care should be provided at no cost, meaning no doctor or hospital gets paid ever, either? That’s an interesting plan. Ask the Soviets how that worked for them.

    Since the accounts work like any Visa/MasterCard account, only with limited and fixed interest rates (item 5 of the plan) and no credit limits, I fail to see how services could be denied to any account holder. There would be no approval necessary. Want to see your doctor? Go right ahead. Need an operation? You make the call when, who, and where.

    Do you live in a world where Visa calls you and tells you what stores you can shop at? I know I don’t. But every once in a while they offer “member discounts” that I can use if I WANT to.


    The debt is legally non-dischargeable…in other words, individuals or families who accumulate medical debt won’t be able to erase that debt if they file for bankruptcy, putting them on the hook forever, especially if they’ve already used up their “once per lifetime” repayment of that debt as noted in point 11 of the Sass/Sebring plan. No doubt health insurance companies would love this point in the Sass/Sebring plan.

    Yup, there is a trade off here, as you so willingly ignore. The interest rate is capped by legislation to the Prime rate plus (present rates would likely be 4.25% – 5%). That means no 19.99% credit card style interest. In exchange for requiring low interest and not allowing credit checks to qualify (item 3 of the plan) for the account, there must be some security for the finance company.

    Or are you saying that they should not be allowed to charge interest, allow people to build a balance, never pay for it, and then bankrupt out of every 7 years?

    I’m not sure, but I think that won’t really work, since no one would ever give you an account in that scenario.

    As for the accumulation of debt, you ignore several other important points. 1) Interest paid is 100% deductible from income taxes. 2) Payment schedules and maximums can be established as part of the legislation. 3) The legislation could include provision to prevent credit reporting and collections, as I indicated in my answer to you.


    As my wife (who read the plan with me) asked, what’s to stop providers from simply opting not to accept the particular insurer/finance company’s plan? How would the medical finance companies have any more leverage than insurance companies have right now?

    Hmm…did you not read my email? I answered this question directly well before you posted this.

    As I explained (and have posted publicly), the reference here is to a discount plan off the “street price”. No one is required to use any network, physician or pharmacy at any time, as the finance company has no right of approval.

    The underlying premise is that restoring the relationship of the consumer and provider will result in downward price pressure, especially for common procedures.

    If I had an ABC Inc. account, and can use their discount network to get the same thing for $50, or pay $55 somewhere else, I MAKE THE CALL. It’s my money I am spending, and can do so as I see fit.


    This is certainly a great idea, but here’s the problem: what about all those costs for treatment that doesn’t include childbirth and catastrophic care for specified conditions? The cost of medical treatment for even non-catastrophic situations can be steep, as evidenced by my wife’s recent trip to the emergency room for a broken ankle/torn ligament, a trip that ended up costing several thousand dollars for a visit by a doctor, a few x-rays of her ankle, and a prescription for pain medicine. Given that our family visits the emergency room a couple of times a year, we’d incur several thousands of dollars of medical debt per year under the Sass/Sebring plan, leaving us with minimum monthly payments that would continue to go up and up and up, and no doubt that debt would take just as long to retire as credit card debt if only the minimum monthly payment is made.

    Again, you ignore the point.

    The point is to bring the market forces back to health care. Today there is are no market pressures on price, since we “spend” other people’s money (insurance companies/government) and don’t pay attention to price unless we happen to have huge deductibles.

    Your wife’s unfortunate experience would be entirely different if 100% of the population paid using money they perceived as their own and paid close attention to price. Do you really think hospitals would be able to justify $10 aspirin and $1000 x-rays to the general public when they are fighting for customers? (And yes, even in your wife’s case, you had some choice as to where she was treated, so don’t go there.)

    And I’m sorry, but part of the free market is paying your bills. Even if it takes some time, that is a fundamental element of our system.

    I believe this plan makes that as painless as possible, and with the life insurance provision (item 12), an individual can be assured that when they pass on, they do not leave debts for their heirs. Such life insurance is generally very inexpensive, as the risk pool is enormous and the issuer is essentially guaranteeing repayment of outstanding debts.


    While I certainly agree individuals and families with lower incomes would need subsidies to help cover their membership costs, I can’t help but wonder what happens when they’re unable to pay their monthly payments if they incur health care costs? If they need a subsidy to cover their yearly membership cost, they’re not likely to be able to make monthly payments towards whatever costs they “charge,” and while a one-time debt forgiveness plan is great, what happens after that? If these cards you’d give to folks to charge their health care costs are run like credit cards, once folks hit 60 or 90 days overdue on their payments, they’ll be sent to collection, and if they’ve already used up their once per lifetime repayment, they’re essentially screwed. What’s more, as noted in point 5, this debt would be non-dischargeable, meaning individuals and families would be stuck with the debt forever if they had already used up their “once per lifetime” repayment of debt by the government.

    I addressed this directly in my email to you, which you conveniently ignored. Delinquent accounts are an issue, and there are multiple methods for dealing with them. Remember that mandatory minimums could be indexed for income, credit reporting and collections disallowed, and methods such as tax refund diversion can be used.

    This plan is not full legislation, but a framework to build legislation upon. It can be updated, modified and worked with over time as issues arise.

    Seems like you are more interested in making the Federal government the largest insurance company in the world than you are in addressing the issue of price in health care.

    That tells me all I need to know about your “analysis”. You just want someone else to pay your bills.

    Thanks anyway. I will sleep well knowing I made a good faith effort to engage the other side, even if you weren’t.

    1. Nathan, I chose to address the points in your plan that I found the most wrong with. You say that’s dishonest; I say that’s me focusing on what caught my eye in your “plan.”

      As for your assertion I want someone else paying my bills, I’ll just note I work for a living, as does my wife, and we pay all our own bills. I know it’s easy when all else fails to just label all liberals as being lazy folks who simply want a government handout, but trying thinking past the latest conservative talking points.

    2. when I have a bit more time I will read your linked post as well…thanks for the comments

      1. Ed, don’t bother reading Nathan’s linked post; it’s essentially identical to what he posted here. Nathan’s mad because I tore apart his points; that’s all.

  3. “Seems like you are more interested in making the Federal government the largest insurance company in the world…”

    I think the feds are already the largest health insurance provider in the world…if not at least the largest in the US.

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