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does that and so I’m very much in favor of the legal system. “I think legal rights stand up there with civil rights in my mind. I wouldn’t give them up except for something very excellent. That’s why the Michigan no-fault plan is something that I like because it is very excellent unlimited benefits. If I get a hundred million dollars worth of damage I get paid. In the current legal system in auto insurance if I have a million dollars worth of damage I’m not going to get the money, because most people don’t have a million dollars worth of coverage. As a matter of fact if I have a hundred thousand dollars worth of damage, on average, in the whole country, you get fifty thousand dollars out of the auto insurance system. That’s bad for seriously hurt people. “The tradeoff that I find acceptable in the Michigan plan is I give up my legal right [to collect multiple damages at the low end], except for very serious cases, and in exchange for that I get unlimited medical and rehabilitation benefits. That’s a very excellent tradeoff, but the kind of no-fault systems that are being pushed by the insurance companies, which have fifteen thousand dollars of benefits or something like that, are very poor tradeoffs. “You give up your right to collect multiple damages at the low end, but … you’ll find that at the low end of, say, a thousand dollars of medical bills you may get three thousand dollars to settle the claim nuisance value but as your damages go up, when you go from a thousand dollars to five thousand dollars to ten thousand dollars, the more the actual damages, the less you get as a percentage … In Michigan, if you have a thousand dollars’ damage you only get a thousand dollars but if you have five hundred thousand dollars you get five hundred thousand dollars. I think that’s a very reasonable tradeoff, and the systems cost roughly the same, so for the same premium dollar I get unlimited benefits. …” What about pay-at-the-pump? “Pay-at-the-pump is a form of no-fault. It’s something I developed and Andrew Tobias, in his book Invisible Bankers, mentioned it. The first guy I ever heard propose pay-at-thepump was probably Daniel Patrick Moynihan in New York, probably in 1971, he was saying, ‘This is crazy, why don’t we make people pay at the pump.’ That was the first time I had ever heard of it. I liked the idea ever since. It makes some sense. It’s very efficient. It eliminates a lot of costs. You can deliver a much richer benefits package for less money. It’s politically very difficult, unless you do it by initiative [as in California]. It’s got trial lawyer opposition because it’s a no-fault package [which takes lawyers out of the process], it’s got insurance company opposition because they may lose the busi ness, it’s got insurance agent opposition because it doesn’t use insurance agents. It breaks very large rice bowls, but it’s a good concept to have out as an idea, if for no other reason than to put pressure on the system to reform itself and to become efficient. I believe that competition should make this system much more efficient if competition is going to work, which we will find out. “The problem has been historically what the insurance companies have called competition has not been competition. The insurance companies have said: ‘Let us have our cartels, let us collude on price, make people buy insurance and let us shoot fish in a barrel, but don’t make us sell it and don’t make us compete. Don’t give them price information and don’t help them.’ My idea of competition is a really open market where The insurance com panies have said: ‘Let us have our cartels, let us col lude on price, make people buy insurance and let us shoot fish in a barrel, but don’t make us sell it and don’t make us compete. insurance companies are tested on the quality of their service, on their price and that information is readily available to consumers when they make their insurance deals. There are still some impediments to competition that will require some legislation before they’re all removed, but most of them are removed. One that may have to be removed later is that people have to buy auto insurance but insurance companies don’t have to sell you insurance, even if you are a perfect driver. They can dump you in an assigned-risk plan or into a high-cost company. Some of those things have to be controlled somewhat, to balance supply and demand.” . What role do you see for the state in pro affordable health insurance? Is it your role to promote health insurance? “I guess my role is to help people under stand insurance and to help people make wise decisions. I’m obviously going to do what I can to help in the implementation of House Bill 2055 [which sets up health insurance purchasing pools for small businesses] and I’ll do what I can in that area and there are some problems in that bill, but we’ll do the best we can. There isn’t universal access until ’95, so in the short term there are some problems with the way it is structured, but I think it will have some positive impact. But there are still some individuals and groups. smaller than three that are not covered by this bill, but the bill does have some improvements even for them in how the market will work. I would assume that before ’95 Congress will act and what shape that will take is anybody’s guess. Were you involved in development of the President’s health care plans? “Sure, I worked with Ira Magaziner [President Clinton’s health care adviser] and those kinds of people, so I was an adviser. I wouldn’t do it the way they’ve proposed it. I’m a single-payer advocate. I think singlepayer [where the government finances health care for all through a broad-based tax] makes a lot more sense than HIPACs [health insurance purchasing alliances financed by government and businesses], even if it doesn’t make more political sense. “[Single-payer is] much more efficient, [it’s] much better from an insurance standpoint. But if you factor in the politics of limited resources and all that, I would start with single-payer catastrophic [insurance]. I would start by saying every American would be protected against financial ruin by a plan that, since we have limited resources, we’ll cover everything above X thousand dollars, income-related [with deductibles based on income] so the average person may have a twenty-five thousand dollar deductible. Sure the average person can’t afford that, but you’d take care at least of the incredible wipe-out of losing homes, if you do that single-payer and you can set that at a level where the budget can afford it and then you simply say you buy your insurance from the private insurers up to the twenty-five thousand or five thousand or whatever it is … and when you go to buy that [primary coverage] we’ll have good information. And later, when you have better budget numbers, then you can start to lower that after you get your foot in the door for a single-payer plan that really can work. I think the HIPACs will fail.” Does H.B. 2055 dovetail with the Clinton plan? “It has some of the elements of the Clinton plan, with the purchasing alliances and the like, and I can be convinced if it works, but I’m just very worried about this Jackson Hole concept [of managed competition of insurance companies and health maintenance 8 NOVEMBER 26, 1993