Wednesday, November 13, 2013

Repeal and Replace! But with What?

Here is my idea on a simple way to give all US Citizens access to health care either through government programs Medicare or Medicaid or through ownership of private health insurance.  That is an objective which seems reasonable, I think, even to most who would label themselves “conservative.”  I’ve hinted at it before, but the objective here is to flesh it out more completely.  I propose the following legislation:             
  1. It shall be unlawful for private health insurance companies to deny coverage or payment of benefits because of pre-existing conditions.
  2. It shall be unlawful for private health insurance companies to cancel health insurance for any reason other than non-payment of premiums. 
  3. It shall be unlawful for private health insurance companies to charge different premiums on any bases other than age and gender of the insured, benefits promised, and deductibles required.
  4. It shall be unlawful for private health insurance companies to put annual or lifetime maximums on the benefits from any health insurance policies.
  5. It shall be unlawful to limit operation of private health insurance companies or availability of any of their policies to certain states.
  6. Individuals and families with annual incomes in any given year below the Poverty Level are fully qualified in the following year for coverage under Medicaid.  (Medicaid would have to be a federal rather than a state controlled program.)  
  7. Individuals and families with annual incomes in any given year at 100% to 300% of the poverty level are eligible for tax credits equal to a percentage of their health care insurance premiums. See the sliding scale below:
  8. The cost of the tax credits in any given year will be fully paid for the following year by an income tax surcharge on individual and family incomes greater than 1000% of the poverty level.  The percentage of that surcharge will be calculated each year to closely approximate the needed funds and adjusted year by year to exactly do so over the long run.
  9. The cost of Medicare and Medicaid services in any given year will be fully paid for the following year by Medicare premiums plus a flat payroll tax calculated each year to closely approximate the needed funds and adjusted year by year to exactly do so over the long run.
  10. Charges by health care providers, including physicians and hospitals, must be published, advertised, and transparent, and individuals who chose to pay their own bills within 30 days of billing must get “most favored nation” status, charges as low as any insurance company or the federal government pays for the same service.  All charges must be based on the total service provided and results accomplished rather than on individual items.  (Hospital "Charge Masters" are abolished.)
  11. Employers may or may not provide compensation to employees specifically for purchase of health care insurance, but all policies are owned by individuals, are completely portable, and continue whether employed or not. 
  12. Other than the above, neither the federal government nor state or local governments may make any  rules or regulations about what is to be included in or excluded from health care insurance policies or the costs of such policies or the benefits paid by them.

Now that legislation would create a true competitive nationwide insurance company scramble to design policies and establish premiums to attract policy holders, would avoid the need for billions in software development and associated turmoil for a government "roll out," and would keep the IRS out of the mix except for handling, with existing procedures and at no additional cost, the tax credit refunds claimed.  

It would make insurance available to all, though some individuals would, of course, still have to make choices about whether to buy health care insurance or spend the money on vacations, electronic toys, new cars, booze and cigarettes, but that would be just fine.  Of course many would still choose not to buy insurance until and unless they become sick, but that too would be OK.  They would risk having to pay their own bills while they go through the process of buying insurance, and, if they are in the income range to receive tax credits, the taxpayers would save some money during the time they take that risk.  Such risk takers may go bankrupt, and that would be fine also.  If their income gets low enough, they can get Medicaid.

Some policies would offer annual checkups, birth control pills and devices, and other routine lower cost items and some would not.  And that would be just fine.    Some would cover abortions, and some would not.  Policies would have different deductibles, ranging perhaps from zero to seemingly ridiculous sums like $50,000 for a wealthy person who would just as soon pay his or her own bills except in catastrophic cases.

I expect that such a program would be so successful, that it would eventually replace Medicare, putting those of us over 65 in the same program as our younger fellow citizens.   Health care spending would no longer add to the federal deficits and debt. And spending on health care in the US would decline as a percent of GDP.

And, most importantly, Individual freedom, personal responsibility, and free market competition in the health care industry would be preserved.  And the regulators would be very busy making sure all the items above are being obeyed.

Note: Of course I don't have enough information to do the math on exactly what would be reasonable for the reimbursement schedule in the chart above and what the impact on tax payers with larger incomes would be.  If such a plan as this were put forward, there would be much number crunching going on by policy wonks and the Congressional Budget Office and some reasonable level would be agreed on.  I bet it wouldn't be too much different from what I am proposing.  




3 comments:

  1. It was an interesting suggestion President Obama made yesterday, to let the insurance companies ignore the Affordable Care Act for a year in which case he promises to ignore their illegal acts. I say "suggestion" because it is clearly a stretch of presidential power for him to be able to do that without and act of Congress. It, after all, is not his law in spite of the fact that it has come to be known as Obamacare. I'm guessing the insurance companies are going to ignore his "suggestion" as they should. It may be time for a little study on the rise of presidential power, a result, most likely, of failures of Congress.

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  2. Yesterday I posted an anonymous comment and then replied to it. That just resulted in another anonymous comment which reminded me that my intent is not to post anonymous comments.

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    1. If anyone wants to contact me directly, my email address is on the site. But I don't reply to anonymous emails either.

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