Two states’ child health insurance initiatives (free subscription required) show different approaches to the same problem; providing access to health care for the nation’s kids. South Carolina is adopting a scheme based on private insurers while Illinois is pursuing a plan based on public funding and management of the program.
And these are not the only states experimenting with different approaches: California activists are hoping to get an initiative on the ballot next November that would fund child health insurance through a higher tax on cigarettes; New Mexico’s Governor will propose universal health insurance for kids under 5 in his next budget; and Florida has already received approval for the privatization of much of Medicaid.
While Washington dithers over very minor changes to Medicare and Medicaid, the states are once again the laboratories for innovative ideas. These ideas can be differentiated into two broad categories; defined benefit and defined contribution.
The defined benefit programs are those that pay for any care that is consistent with the benefits outlined in the Medicare or Medicaid programs. Defined contribution plans are entirely different – they pay a set amount of money to a program state, or beneficiary that the program, state or beneficiary must use to cover as much of their care as possible.
The ideological distinction here is obvious – have the state responsible for funding the care that is needed v. make private enterprise, the insurance program, and/or the individual responsible for figuring out how much care they need.
With the present regime in Washington, expect the Feds to promote more of the defined benefit programs, and more privatization in the next two years.
While I am all for innovation, remember that administrative costs associated with private health insurance are several times higher than the costs of programs run by the government. The question remaining to be answered is “can the innovations and creativity of private firms deliver better results in terms of lower health care costs and healthier people despite their higher administrative expenses?”
Thanks to Tom Barrett of Choice Medical Management for the reference.
Nov
23
