October 25, 2005

$11 Health Insurance?

Yesterday's big news was that Wal-Mart has decided to offer an even lower-cost, high-deductible insurance plan. In The New York Times Michael Barbaro writes about the $11 plan (which is actually $25 in most places):

Wal-Mart said that under the plan, monthly premiums would cost between 40 percent and 60 percent less than those for any existing Wal-Mart insurance policy, and that individuals could visit a doctor three times before paying a deductible, an arrangement aimed at encouraging workers to seek preventive care. In the past, workers have had to pay a deductible before their insurance kicked in.

Those who participate will pay a $1,000 deductible, the maximum under Wal-Mart's insurance for 2005. Monthly premiums will be, on average, less than $25 for an individual, $37 for a single parent and $65 for a family. The $11 premium, for individuals, will be available in a handful of areas, Mr. Fogleman said.

But the plan is unlikely to cover a complicated illness or expensive hospital stay during the first year, when there is a $25,000 insurance cap. (The cap is lifted for the second year.) Out-of-pocket payments range from $300 for prescriptions to $1,000 for hospital stays.

Now, I think that this is something to make one pause and think about carefully. Yes, the deductible is high. Yes, there are other deductibles and restrictions. Providing a health insurance plan with a high deductible in tandem with HSA provides a disincentive to preventative care, so having a three visit exclusion is pretty important. It's smart thinking, meant to increase preventative care but to limit unwarranted visits (such as going to a doctor repeatedly to harrass them into prescribing antibiotics, etc.).

Wal-Mart has tried to offer an option that is truly low-cost, not just low-cost-that-we-can-see, or paid-for-by-higher-prices. Of course, blog reaction is mixed. How does Wake Up Wal-Mart respond?

“Wal-Mart’s so-called Value health care plan offers nothing but an empty promise of higher deductibles that remain unaffordable and out-of-reach to most Wal-Mart workers. With Wal-Mart’s poverty-level wages, the average worker would have to spend up to 40% of their take-home pay to purchase the family option of this so-called Value plan. No wonder Wal-Mart admits the taxpayer-funded public safety net is often a ‘better value’ than their own inadequate health care plan.”

Well, OK... Go there to check their calculations, and see and interesting comparison to Wal-Mart's current plan. But I should note that many Americans on the left have long demanded, and have seen enacted, government programs that help the poor (and now the middle class) pay for and "access" medical care. These programs have not been a "safety net" for at least a generation; they are now a dominant feature of medicine in the US.

Wal-Mart Watch is more on point:

Wal-Mart Watch credits Wal-Mart for recognizing that their employee health plan is inadequate for their employees and unfair to taxpayers forced to support their use of Medicaid. We call on Wal-Mart to go further and address the full range of deficiencies in their plans, from affordability to eligibility to out-of-pocket costs to waiting periods. This is a company that can well afford to remedy those problems.

It think it is important for people to recognize that it is both impractical and undesirable for Wal-Mart to pay for all the healthcare expenses of its associates. It is the social expectation and tax policy preference for employer-provided medical care that must change. Paying for your own healthcare is not evil. Out of pocket costs are not evil. People should pay for their own regular routine medical care. Of course it is a tremendous challenge to provide world-class healthcare to people of low means, especially those with prior health issues.. If the cost of this care is beyond the means of somebody whose best alternative is working at Wal-Mart, there are several policy options that can be used; Wal-Mart is blamed for shifting the costs of care onto the taxpayer, but WMW wants Wal-Mart to shift the costs of care onto the consumer. How is that any less "unfair"? All policy options that redistribute to the less fortunate require shifting the cost of the care to others, making them worse off. What I'm trying to say is that you cannot force Wal-Mart to take its profits and pay for medical care without negative consequences: in this case, 1) Wal-Mart deciding to raise its prices, making consumers worse off, or 2) shifting its compensation packages towards greater benefits and lower wages . It is not clear to me that paying for healthcare with higher consumer goods prices or lower cash wages is a desirable or enviable policy outcome, even if it does lower the taxpayer burden.

Others have more interesting discussion. The Arkansas Daily Blog thinks a single-payer universal plan is the solution for giving the poor healthcare. I'd agree that coverage under such a system could be made universal, but I'm fairly certain that costs in terms of dollars and waiting times for doctors would go up, up, up!

For other reactions I think are reasonable see Left in the West and Economists View.

Posted by Kevin at 9:38 AM

September 1, 2005

Med-Point Express

The Shouth Bend Tribune has a great piece on Wal-Mart's new healthcare facility in Mishawaka, IN:

MISHAWAKA -- It doesn't feel hospital-like with its decor of earthy tones. And there's no 20-minute wait for a doctor after the nurse takes you back and checks your temperature.

The nurse is your doctor.

Patients know up front what a visit will cost from the menu board on the storefront.

Cough: $45.

Pregnancy test: $21.

Strep screening: $20.

Insect Bite: $38.

Seasonal flu shot: $22.

And the entire visit will take 15 minutes maximum at Med-Point Express, the new retail-based primary care clinic that opens Monday in Mishawaka.

Nurses will be evaluating, diagnosing and treating about 30 common illnesses including sore throat, sinus infections and ear infections.

The clinic is sandwiched between a nail salon and portrait studio in the front of the Wal-Mart superstore at 316 Indian Ridge Blvd. It is a new trend in medical care -- fast medical care that is affordable as well as convenient for customers.

Inside Indian Business has an audio interview with a Senior VP of Memorial Medical Group.

Posted by Kevin at 1:19 PM