Friday, January 9, 2009

Tennessee's innovative approach to health care reform

Not that I endorse all of this, but here's Governor Phil Bredesen (D-TN) in the WSJ on his state's laudable and creative efforts to reform health care.

The point of posting this:
a.) to describe the particulars of the TN reform
b.) to illustrate the usefulness of state-based reform (vs. national attempts at reform)'s the problem: a comprehensive health-insurance policy for her costs about $5,000 a year, and someone has to pay that. That's a real number that won't go away with group purchasing or by beating up insurance companies. Ms. Landry can't afford that, and in a world of trillion-dollar deficits it's hard to see how the federal government can either.

We need a national health-insurance solution, but isn't it sensible in the meantime to make sure everyone has a basic health plan before we give a few more people a perfect but expensive one?...

CoverTN, which began in 2006, is a health-insurance plan for those who are self-employed, or who work for small businesses that can't afford a traditional policy.

One part of this is quite innovative: starting with cost and then going to benefits-- instead of vice versa!

It is not free health care. Rather it is a limited plan with shared costs. In devising this plan, we didn't start out the usual way -- by defining what benefits we wanted -- but instead set how much we wanted to pay. And then we began a competitive-bidding process to see how much health care we could buy. We initially set the amount we would pay at an average of $150 a month, and split the responsibility for that premium three ways. The company would be responsible for $50, the individual for $50, and the state for the final $50.

The bidding was vigorous. It was ultimately won by BlueCross BlueShield of Tennessee with a benefit package that meets a great many -- not all -- of the real needs of the uninsured at a cost far below conventional plans....


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