Wednesday, August 27, 2008

Government run medical plans don't work!

Recent media coverage about the problems Connecticut's new Charter Oak medical coverage plan was having bring out the issue - medical plans which pay providers low government rates for services don't work.

Some insights:
+ Connecticut's payment level to physicians through the Medicaid (welfare) system had dropped to around 45% of what Medicare pays. During the 2007 General Assembly over 100 million was appropriated to raise the payment level. The result - it now around 57% of Medicare. It is obvious the new payment level is still way below a physician's normal service charge.

+ Now if you were a physician and were contacted by a health plan organization, you had no previous working relationship with, and were asked to participate in a plan that pays about 57% of Medicare what might your reaction be? Note: The primary welfare plan company did not bid on the new plan.

Is there a solution? Yes.
+ One effective and more economical approach for the state would be to provide premium subsidies to low income individuals. Thus those who need coverage could enroll in a individual medical insurance plan from a private company. This would go a long way toward lowering the number of individuals who are uninsured.

+ Change the operation of Connecticut's high risk pool so most of the treatment cost for individuals with significant on going medical conditions would be covered by the pool. Thus, these individuals would not be turned down when they applied for private company coverage.

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