Tuesday, June 9, 2009

Basic Fundamental Principles for a “New” Private, Market-Based Health Care Insurance In The US

What kind of government do you want to have going forward into the 21st century?

Is it one that is tied to laws and regulations first enacted over 25, 50, 75 years ago? What kind of nation would we be if we still had laws and a government more in tune with the realities of the 18th century than today?

That is one reason why we have been reminding you that each new legislative session can not be tied or beholden to the decisions of any past Congress. If we were, we could never move forward as a nation or an economy.

Thomas Jefferson went so far as to say "a little rebellion every now and then is a good thing". (letter to Madison, post-Shays Rebellion, 1/30/1787) His very fervent belief was that each generation should decide for themselves the shape and type of government they should have, not their grandparents or ancestors.

We are of the belief that the time has come to revamp our government programs in a revolutionary Jeffersonian manner along some pretty basic, simple lines such as the following:

  • Defend our nation
  • Assist those people who are truly in need due to economic circumstance or physical impairment, not based solely on age-eligibility requirements
  • Balance our budgets so our kids and grandkids won't have to do it for us
  • Quit living beyond our means on borrowed money from China and our poor kids, (once again, they are getting it stuck to them)

With those underlying principles in mind, we are asking your indulgence to ‘suspend belief’ about the current confusing maze of health care practice and laws as we 'dream about what a 'perfect' health care insurance system would look like in America.

Did America ever have a “perfect” health care system? Probably not. Not back when people used to pay for medical services by bringing produce or animals as “payment” in the old frontier days. Nor when millions of seniors and poor people went without health care prior to the advent of Medicare and Medicaid in 1965. It may have been a ‘simpler’ health care system back in the day but those were also the days when a doctor would take one look at a cancer patient and say: “Good luck and say goodbye to your friends and family” without the benefit of the panorama of miracle drugs and procedures of today.

But a ‘more perfect’ health care system has to be out there, doesn't it? We think it is and it might be sitting right there right in front of faces, only hidden by all the confusing laws and regulations. With the same amount of public money currently being spent on health care and no additional taxes, we can cover everyone with a basic health 'insurance' plan (emphasis on 'insurance'), as long as we drop the barriers, such as strict adherence to universal age eligibility and fear of reprisals from the AARP, that have impeded such progress over the years.

In our opinion, a 'more perfect health care insurance system' is doable and will leave the basic underpinnings of the free market intact with the freedom to choose your own doctor for future generations to come.

We have laid out three fundamental premises finding fault in the current convoluted health care ‘insurance’ (sic?) system. We believe the current system: 1) violates every insurance financial principle known to mankind (a); 2) is not a true “insurance’ program at all but rather a ‘pre-paid health care payment system’ (b); and 3) is wasteful and inefficient in the sense that the majority of it is paid for by third-party providers, such as employers, which drives up utilization rates and costs unnecessarily. (c) Plus we have learned why health care plans coverage devolved to corporations during the wage-and-price controls of WWII. (see also (c) again)

The number of Americans who go without health insurance for the long-term is not 44 million but closer to 24 million (d) so the 'problem' is at least 50% as large as trumpeted by politicians.

Oh, and we also have examined why the costs of health care are so high in the first place due to our collective national over-consumption of unhealthy, fattening, sweet processed foods, alcohol and tobacco products multiplied by a severe lack of exercise by most Americans. (e) We could eliminate close to half of all the costs in our $2 trillion annual national health care bill if we would just do the right thing and return to the sensible eating portions and non-processed foods,stop drinking and smoking so much and get out and walk a mile or so every day.

Other than all that, the system is great and working well. (Which, in terms of delivering amazing technological breakthroughs and pharmaceutical solutions, the US is the clear leader in the world today. Maybe because we have imparted such an amazing array of destruction on our bodies that we are a veritable living ‘petri dish’ experiment for scientists to work on).

Here is the platform we would propose on which to build the “new” privately-based system:

1) Establish a base mandatory health insurance plan that everyone has to have, similar to the same conditions of buying car insurance in order to drive or home insurance when you buy a house.

2) Make it a ‘true’ health insurance plan that covers the cost of the extraordinary health claims that occur in catastrophic cases such as cancer, heart attack/stroke or accident which would bankrupt any normal family living in America today.

3) Bring everyone from the oldest senior citizen to the poorest low-or-no income family back into the general population pool so that the basic fundamental principles of having the vast majority of healthy people subsidizing the smaller percentage of ‘unhealthy’ people each year will apply.

4) Assign a given monetary value for health care insurance coverage to each person, similar to the GI Bill that has worked so well over the decades, based on their income and actuarial risk profiles due to relative age differences and regional adjustments and pay for it out of the existing Medicare and Medicaid budgets.

5) Let the private health insurance market set about competing for each of these new independent decision-making clients and provide group health insurance coverage on a competitive basis which would further drive down costs.

This ‘new’ approach would push the decision-making for joining health care plans back to the individual level where it rightly belongs. It would also assign a tangible actuarial economic value to each person that would cover their expected risks and potential costs when folded into a large pool of healthier people whose premiums would help subsidize the costs of those who fall ill each year.

With the new biometric devices that are out there in the market right now, or soon-to-be on the market, the highest risk new patients out of the number of people who will get sick in the next upcoming year can be identified. Steps can then be taken at an early stage to put them on a diet, exercise program or enroll in a ‘wellness’ program to try to avert the onset of a serious disease outcome.

The amount of money exists out there in the existing Medicare and Medicaid programs to cover these costs. We will try to explain how in later postings.

(a) Use Insurance Principles
(b) Do we have a Health 'Insurance' System?
(c) Do You Buy "Gutter-Cleaning Insurance for Your House?
(d) What is the Deal with 44 Million Uninsured Americans?
(e) Americans Need to Lose Weight and Get Healthy

1 comment:

  1. Yes , we need to continue to change with the times. But one change that we don't need is the loss of freedom. That is exactly what is happening now. Do you want your grandkids to experience freedom or read about it in their history books? ( if the government allows it)!

    ReplyDelete