The Future of Health Insurance

If Health Insurance is to be affordable for everyone, enrollment of everyone must be required and the cost must be tax-deductible!

One needs to understand that insurance companies do not control the cost of medical care.  Insurance companies are simply a third party that collects premium from those insured and guarantees payment to medical providers when their insured’s utilize medical services.

For Medical Insurance to be affordable, some control over provider costs is necessary.  This can be best achieved at the consumer level.  Consumers should be incentivized to acquire medical services with the same responsibility as they currently exercise for an appliance, automobile, or residence; comparison shopping.  Comparison shopping for the most affordable medical service would require medical providers to operate on a competitive basis.

Currently, this is not possible because too much of the cost of medical care is handling the superfluous burden of reporting required by various government programs, and the resultant cost-shifting required of medical providers to operate profitably.  The Government is currently responsible for reimbursement of over fifty percent of the nation’s cost of health care!  Since various government programs reimburse medical providers at less than actual cost, the difference between Medical Provider operating costs and the government underpayment currently has to be transferred to insurers and private payers to cover the medical providers’ overhead and profit margins.  This additional administration increases the current cost of consumer medical care by more than thirty percent!

If all consumers of medical care were required to show proof of payment at the time of acquisition, insurance or actual payment, this could eliminate the need for cost-shifting.  To accomplish this, Government Paid benefits at every level need to be eliminated!

Employer furnished Group Medical Insurance should be eliminated.  This would result in larger pools of insurance for individual and family coverage ultimately reducing the cost of insurance for everyone.  Each individual would be responsible for the purchase of their own medical insurance.  Those who cannot afford the cost of medical insurance could be issued Tax credits based on their income, and indexed for inflation, to be used for the purchase of medical insurance. Individually owned medical insurance could be issued without consideration of medical history.  Answers to medical questions would not prevent anyone from obtaining medical insurance.  Answers would determine how the medical risk would be covered and the ultimate cost.  Larger risk pools with the increased  revenue would permit Guaranteed Issue on an affordable basis.  Insurance could be obtained on a nationwide basis.  Premium adjustments could be made based on the cost of care on a geographical basis.

As employees move from job to job, state to state, their insurance would follow them!  Individually issued policies would be owned by the insured and portable.  This would eliminate the need for COBRA, another expensive required government program!

Medical Providers would be required to bill each individual’s insurance provider for medical services rendered.

No Government Agency would be responsible for direct payment or any reimbursement of medical care, for any age consumer!

Savings would result at the Government Level since they would no longer be responsible for managing the cost of medical care and the resultant medical payments.  Consider the amount and cost of claims administration that would be reduced at this level.

Savings would be realized at the Provider Level since they would not have to deal with any government agency and the required reporting!

Savings would be experienced by the insurers attributable to the larger premium pools available to pay claims.

Savings could be expected by the consumer proportional to the shopping practices exercised when medical care is needed.

Finally, medical insurance should cover the expenses for what it was originally intended, only that arising out of accident or sickness.  Lifestyle choices: smoking, alcohol, drugs, obesity, etc. and the resulting cost of care should be the responsibility of the consumer.

Summarizing,

1. Each individual would be responsible for the purchase of their own policy the cost of which would be Tax-deductible.
2. Tax-credits would be provided to those individuals and families who fall below certain income levels, indexed for inflation.
3. Medical Providers would have the option to provide or deny care to those who cannot show proof of payment, or afford to pay.   This puts the responsibility for the cost of medical care back in the hands of the consumer and the medical provider, rather than cumbersome Third Party Administrators and inefficient government bureaucracies!
4. Finally, the cost of health care could be reduced by requiring everyone to purchase High Deductible Medical Plans with Health Savings Accounts.  The cost of these plans, while being indexed to inflation, could be reduced periodically by similar indexing of the out of pocket expense requirements.  HSA’S permit the insured to pay for routine out of pocket expenses with tax-deductible funds.  These funds are a result of the savings of the cost of a High Deductible Plan when compared to the cost of a Traditional Medical Plan.  One can only hope that when the insured is spending their own money for health care, they would be incentivized to shop for the most affordable type of care.

Would you prefer to pay increased prices for Government subsidized benefits and and experience rationed care, or have access to any type of medical care when needed at an affordable cost?

About The Author

Robert E. Patterson

Registered Health Underwriter    E-mail: RobertP876@aol.com    866-419-7840