I feel that the debate on Health Insurance in the recent elections and their entire diagnosis of the problem is flawed. Are they trying to help insurance companies by trying to insure everybody or help Americans by getting the costs health care costs down? Look closely and you would realize they are doing the former.
There are 2 real problems that we face - costs of procuring health services and the leech called insurance. A quick search on the web reveals that countries like UK, Sweden and Japan spend anywhere between $1650 to $1850per capita for health, we spend $4500 and even then we have been ranked 37th in overall health performance and 24th in health attainment. According to Insurance Information Institute, the single largest reason to be unable to afford health insurance is cost. So instead of pressurizing insurance companies to find ways to reduce premiums, the debate on this is going towards trying to cover everybody, which in turn, they claim, will reduce the cost of insurance premiums. This could not be true. From 1987 to 2006, the % uninsured grew from 14% to 16%. Increase of 2% in 20 years! Meanwhile insurance costs went up at least 3-4 times. How can then insuring the uninsured decrease the cost of health insurance? Here is a different plan that addresses the situation to some extent.
Imagine one being affiliated to a medical facility (MF - hospital/clinic etc) within one’s county. This MF is a typical not for profit promoted by the government. In-stead of insurance premiums, you pay a fee, charged to you like electricity by this body. This fee works largely like premiums do – less for healthy and more for not so healthy. It covers you for all emergencies or any medical need without any complications of deductibles, co-pay etc. If you are out of the city/county, an associate MF covers you. Since people from one county will continue using services of another county within the state or outside (as people travel), these MF continue to adjust their books internally. A lot of this sounds like the insurance, especially the fee being like premiums, so what is the benefit?
The healthcare plan
If it sounds like insurance, why have insurance? After all, insurance is just the middleman that works on laws of probability. They think that the costs of those claiming will be offset by the revenues of premiums earned and still leave them some margin. To collect premiums on time and settle claims belated after paying less or nothing, they have an army of employees. After paying for all administrative costs and salaries, they still make money. (Note that compared to other businesses, insurance companies have a much longer life span, and rarely ever, go bust.) So if we just avoid them and pay the so called premiums to the hospitals/clinics, we should be paying less. Further, the practice of inflating prices to leave room for negotiation with the insurance companies, will go away bringing the costs down.
Net positive premium will be used to improve reserves and facilities, net negative will be underwritten by the government. This way, it is finally the tax payer’s money going directly to cover their costs rather than going to insurance companies first, who keep their cut and question all your claims.
