UpDate - Vol. 13, No. 8, Page 8
October 21, 1993
Economics professor suggests individual health card

     If you love taking the old VISA or Master Card out of your wallet to
pay for purchases, Laurence Seidman, professor of economics at the
University of Delaware, has an idea for you--a new piece of plastic
designed to purchase health care.
     Seidman, a proponent of a plan he calls US Health Card, gave the
opening address of the College of Business and Economics' Management
Development Breakfast Series Oct. 7 at Arsht Hall on the University's
Wilmington campus.
     Under this health care system, every household in the country would be
issued a government credit card. When health care expenses are incurred,
the health provider sends the bill to the government. The government pays
the bill in full and in turns bills the patient for a fraction of the bill,
based on the household income--information available to the government from
income tax forms. There would be a limit to the amount a household would
have to bear, based on ability to pay, and there would be an annual limit
on how much expense a household would have to bear.
     The system, Seidman said, would be financed by taxes, which would
replace today's premiums to private insurance companies so the burden on
individuals would remain the same. He also said private insurance companies
could be employed by the government to process the paperwork and bills.
     "They would no longer be selling insurance," he said, "but they would
be doing a lot of business."
     Seidman said he has "no illusions that there is a flawless approach"
to the health care problem. Still, he said, the country's current system of
private insurance without government interference would only work in an
unrealistic society where everyone has similar health prospects, everyone
has similar income, everyone is a risk adverse planner (someone who would
buy insurance) and everyone had the same level of medical knowledge for any
given medical situation.
     Seidman praised the Clinton administration's commitment to getting as
many uninsured people as possible into a group for shelter but questioned
specifics of the plan, such as the ability of Clinton's proposed health
alliances to include high risk people and the individual's right to find
the best specialist in a given field if that specialist is not a part of
the alliance the patient joins.
     Seidman said he was "absolutely against price controls on doctors and
hospitals. "When someone puts forth a greater effort or has the ability to
be a higher quality producer, that individual ought to be compensated for
it," Seidman said.
                                                  -Beth Thomas