Great Medicaid Idea D.O.A. in N.J.

Medicaid is costing New Jersey taxpayers about $5 billion annually (with a like amount paid by federal taxpayers) to cover 1 million people yet only 40% of office-based physicians in the state are accepting new Medicaid patients, by far the lowest percentage in the nation, and many doctors are leaving the state because of the high cost of malpractice insurance.

Dr. Alieta Eck has, if not a solution, an intelligent response to the crisis:

  • Physicians would volunteer 4 hours per week, two operations or two deliveries per month, at/or referred by non-government free clinics (NGFCs)
  • The State would cover the physicians for medical malpractice for all their professional activities
  • Taxpayers could save $2 billion per year in Medicaid costs

Perfectly sensible yet behind the curtain:

New Jersey expects about $640 million in revenues from their Banking and Insurance Department, most of it through premium taxes on insurance policies which is a basically a tax on all New Jerseyans that the insurance companies collect.  In theory this money is supposed to pay for regulation of the industry yet only $63 million is expensed for that purpose and most of that is spent on being the insurers’ fraud detection department.  So it’s a lot of easy money that the state is bribed with to keep quiet by a monopolistic nontransparent industry (thanks to the McCarran-Ferguson Act of 1945) that sets its own rates (thanks to the NAIC) and is not about to surrender a profit center.

Checks will be written and calls will be made to ‘educate’ legislators and a sensible idea certain to benefit the majority of taxpayers, physicians, and the poor will die because too many have invested too much in the current dysfunctional system.

16 responses to this post.

  1. Posted by Ramparts on August 19, 2012 at 7:09 pm

    What a great sommon sense idea, something that actually REDUCES healthcare costs.

    Reply

  2. Posted by jimmer on August 19, 2012 at 7:13 pm

    And because it is so logical, reasonable, and even fair, we can be sure it will never get far in the legislative process.

    Reply

  3. Why pay for malpractice? Just feeds the beast. For one case in 1960, there are 300 now.
    “Texas has reformed tort law and attracting doctors with malpractice costs down 25%,” per John Gordon, author, ‘An Empire of Wealth:……’

    Reply

  4. Skip3house, in our plan, the state would simply protect the physicians who choose to volunteer, not purchase medical malpractice insurance for them. This is not unprecedented, as the state already protects the doctors who teach and learn in the medical schools.

    The federal government already covers physicians for the volunteer work we do in free clinics via the Federal Tort Claims Act. So extending that protection to the private practices of these same doctors would be small price for the state taxpayers to pay.

    If a patient feels he has been wronged, he would have to sue the state. And if there were true damages, the patient would be compensated.

    Uninsured patients, physicians who care for them and taxpayers would be the big winners.

    Reply

    • No one loses, especially the insurance profits and lawyers?
      Please consider tort reform. Regards

      Reply

    • Posted by Watch out. on August 26, 2012 at 12:04 am

      ” the state would simply protect the physicians who choose to volunteer”

      If enough doctors take the bait, then there will not be enough insureds to keep the malpractice insurance business going, as you need a large number of insureds to keep statistical averages stable (law of large numbers for those who care). In other words as the number of volunteers increases beyond a certain level, malpractice insurance will become impossible to underwrite so all the rest of the doctors will have to get their insurance through the state paying premiums by bartering services instead of cash. You will end up with a state monopoly malpractice insurer.

      A state monopoly insurer will have very little incentive to reduce premiums or increase payouts. So why will it be capped at 4hr a week? Maybe in a few years it will be 4 and 1/4 hours? Got a problem with that, buy some malpractice insurance if you can get it. I wonder how payouts will be determined? What if the gov thinks a doc is lazy and not giving 4hrs of ‘honest’ service in the 4hrs, see Honest services fraud for what might happen.

      I also wonder if some classes of doctors where the pay is high but malpractice risk is low will just refuse to volunteer?

      IMO if you want a state monopoly on Medical malpractice just impose it and pay premiums in money not barter.

      How is the IRS going to handle the free insurance premiums in exchange for 4 hours of work? Isn’t that a taxable event, it’s late and I cannot think of what to call it?

      Reply

  5. Posted by Tough Love on August 19, 2012 at 9:03 pm

    Great idea …. that doctors should volunteer their time …. but why stop there.

    So should lawyers, journalists, accountants, financial planners, butchers, bakers, candlestick-makers, cops, firemen, DPW workers, MVC workers, etc.

    Reply

  6. Posted by Eric on August 20, 2012 at 10:48 pm

    Tough Love:
    Attorneys are forced to “volunteer” their time. They are assigned pro bono work as a condition of practicing law in this beautiful state and also pay a client security fund amount to help pay clients who have been ripped off by other attorneys. Now they are even force to attend courses to maintain their licenses which is another revenue driver.
    Attorneys and doctors both are abandoning the Garden State in droves.
    Can you blame them for leaving this cesspool of corruption?
    Eric

    Reply

    • Posted by Tough Love on August 20, 2012 at 11:32 pm

      The reasons to leave will grow by leaps and bounds unless the pensions of current workers and retirees are significantly reduced and retiree healthcare ends (or is significantly curtailed), especially at the local level where property taxes pay for most of these costs.

      Volunteering is hardly a reason to leave and almost every profession has some form of continuing education requirements to maintain licenses/certifications. I’ve have volunteered my time for many years. No big deal and you meet some nice people.

      Reply

  7. Posted by Eric on August 20, 2012 at 11:55 pm

    Tough Love:
    There are no nice people. You have been deceived. Dogs are nice. People are not. Perhaps if you had volunteered longer, you would have seen their true colors emerge.
    Eric

    Reply

    • Posted by Tough Love on August 21, 2012 at 12:24 am

      Wow, and I thought I was cynical.

      I have volunteered for decades … with MANY very nice and intelligent people.

      Try it.

      Reply

  8. Posted by Eric on August 21, 2012 at 10:35 am

    Tough Love:
    Yes. I have volunteered to help displaced animals from natural disasters and cruel owners. It is both very rewarding and heart breaking.
    Perhaps my comments have been a bit jaded to say the least due to the prior owner abuse which I have encountered.
    It is a bit awkward and very humbling in having a Great Dane jump into your lap and look at you to take him home and I am over 6 feet.
    This is way off topic regarding medicaid and pension issues.
    Eric

    Reply

  9. Posted by Eric on August 21, 2012 at 3:53 pm

    Tough Love:
    Very interesting. As professor Michael Hudson says in his book, The Bubble and Beyond, debts which cannot be paid won’t be paid.
    By the way, it is a very good book, but not an easy read, even with a math background.
    Eric

    Reply

  10. Posted by I don't think the state gets to keep all that money on August 26, 2012 at 12:26 am

    ” $640 million in revenues from their Banking and Insurance Department”
    ” $63 million is expensed for that purpose”

    The states’ insurance departments are supposed to maintain funds to guarantee insurance companies obligations to insureds in case of insolvency of an insurer.

    http://www.njlifega.org/faqprint.cfm/

    Reply

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