There are around 300 million people in the US. About 50 million, or one in six, is without health insurance coverage. Health insurance costs are growing at double digit rates, and have for many years.
A Proposal
Eliminate State Governance: Every State regulates health and other insurance providers. This was quite relevant when companies were small and most employees were within one state’s boundaries. Now, of course, even very small companies are multi-state if not international.
A significant cost of providing health and other insurance coverages is compliance with the regulations of the 50 states. Each company must establish a separate corporation in each state with executives and management. Each state has its own special requirements and coverages. Various states require certain coverage for chiropractic, psychological, psychiatric, pregnancy consulting and other care and services. This complexity alone prohibits new creative insurers from competing with the huge established providers. Open competition drives prices down and options up. Establishing a national regulatory framework that preempts State regulation would dramatically reduce the cost of health insurance immediately.
Allow Open Cooperation: If any group of individuals, businesses, charities, unions, trade associations, etc could band together to negotiate national and even international group health, life, disability, workers comp and even liability, auto and casualty insurance coverage for their members, including whatever services and care the membership deemed valuable, one would drive substantial reductions in the price of health and all other insurance.
One auto mechanic cannot afford coverage for himself or his employees. If the national trade association of auto mechanics were permitted to band together and negotiate group rates, they could all afford reasonable insurance with the coverages they deem important. Charities would band together to create huge groups of uninsured individuals and provide affordable coverage that delivered only the coverage these individuals want and need. This is not allowed under today’s laws. Negotiating power for purchasers will reduce insurance prices significantly.
Provide Catastrophic Coverage: The government should provide only coverage in the event of major health problems. If an individual’s illness or injury exceeds some set minimum, we will use $150,000 for these purposes, then the government will pay for all future medical and prescription costs for the patient.
The risk to insurance providers would be capped at $150,000 and so basic insurance premiums would be much lower and more people could afford coverage. Doctors working on patients whose medical costs have exceeded $150,000 would be employees of the government as to this work, subject to the negotiated rates, etc. Doctors could opt out and transfer patients to doctors in the system. Most would remain, just as most accept Medicare and insurance company negotiated rates at present.
For this work, they would be immune from medical malpractice liability, eliminating the extreme costs of that coverage for this higher-risk work. Mistakes would be addressed by a government medical panel and the physician would be disciplined accordingly, including criminal penalties for situations were punitive damages might otherwise be granted.
If one elects government coverage, the patient understands that he or she has no right to recover against the doctors if there is malpractice, but he or she also knows that the government will cover medical bills, prescription costs and other medically required items for as long as required. An individual with means could opt out of the government provided system.
All costs now expended by the government on Medicaid, Medicare, Social Security Disability and other programs would be rolled into this program.
Wellness: Different costs, underwriting requirements and the like would be encouraged rather than discouraged as they are now. Those who are smokers or obese would pay more. Groups would strongly encourage members to quit smoking, lose weight, exercise and get healthy or risk being removed from the group entirely. HIPAA would be amended to allow the group to monitor participants with chronic but manageable diseases such as diabetes, to make sure that the members are taking their meds and monitoring important vitals. Because of the government cap, the costs of health insurance associated with these diseases would not be as significant.
Brokers: Insurance brokers would be held to a higher standard. Broker malpractice would be expanded. Kickbacks, a common practice today, must be eliminated. At present, when a broker reaches certain annual premium levels, the insurance company pays that broker a bonus. These are often very substantial. They are obviously designed to convince the broker to sway the decisions of insurance purchasers toward a certain provider even if that provider is not right for them.
Conclusion:
Freeing the system of undue regulation, permitting greater creativity and providing negotiating power to the purchaser will dramatically reduce insurance prices and increase the number of people covered. Adding catastrophic coverage for all cases above a certain limit will also reduce ordinary coverage prices and make sure that everyone is taken care of if they suffer major illness or injury. In the end, it should be affordable for the government and dramatically increase the number of Americans who have coverage, which will ultimately help the medical community and everyone wins (except perhaps malpractice plaintiffs’ attorneys).
