Random Numbers

I have been doing some deep thinking about health care and insurance, rather than making instant judgments, and I think I see where the whole issue is screwed up.  All of the ideas in attempting to increase coverage and lower costs rest on the fallacy that the government, by dictate,  can cause costs to come down.   If anyone can show me where costs have been made lower by government intervention, they are welcome to try.  I believe I can refute any such argument.  Sometimes we accept higher cost in exchange for certainty, as in recruiting a professional military loyal to the nation rather than hiring mercenary companies loyal to themselves, but that is not the same thing as lowering costs.  And the point of loyalty is key in this debate.  As of right now, many insurers and HMOs have little incentive for loyalty to the individual patient.  With large plans sold institutionally third-hand through an employer, the layers of buffers between the payer and payee are so great that many, if not most, insurance plans are bloated with stuff the customer does not want and will never need.

The plans I have seen currently being worked on all seem to be moving the point of loyalty toward a centralized bureaucracy and further away from the individual.  This is entirely the wrong direction.   Bureaucracies are terrible at serving individuals.  They have no choice but to be terrible, since at the numbers they have to deal with, people become simply numbers on a spreadsheet.  Their whole function is to make those numbers look good, not in attaining individual results.

If we as a nation are going to do something to increase health coverage for the un-and-under insured, a better way is available.

Move the control point down.

My rough draft plan would take time to implement, and it won’t be cost-free in the beginning, but I believe that it would change the insurance and health care environment so that savings and efficiencies would occur as a natural effect, rather than trying to force savings at patient expense.

Part 1:

Issue an assignable tax credit to all persons making twice the poverty level or less for  the express purpose of purchasing health coverage.  By assignable I mean than a qualified person can purchase his plan by signing a statement of credit over to an insurance company, an HMO, a medical co-op, or any other health care service.  The IRS will pay for the plan.   All plans must provide a catastrophic plan, but that should be the only qualifier.

Kicker 1: if you purchase a plan that costs less than the full credit, half the difference is payed to the purchaser.  That means if you save the government money in your heath care purchases, you get to keep half the savings.

As incomes rise on this plan, the credit slides over to a deduction, from full credit, to ¾ credit and ¼ deduction, to half-and half, and so on, until the upper middle to moderately wealthy people only get the deduction, also with additional money deductible for paying less.

Persons rejected due to prior conditions may apply for an additional credit/deduction for a health plan at any company except the company that issued the rejection.

Expensive?  Maybe(and maybe not, see part 3), but a hëll of a lot cheaper this way than creating a “universal coverage” health care system that would result in health care being universally bad (with the exception of government workers, elected officials, and the very rich).

Part 2:

Some people, even with an assignable tax credit, will not bother to get coverage.  Others will not be able to pay the deductible for catastrophic care.  It is important that all medical charges be individualized, so a way to pay for unexpected costs for these people is called for.

If an uncovered person needs care, he will have to pay for it somehow, so I propose that uncovered bills be paid through a loan directly from the government.  The recipients will have their tax refund applied to pay the loan and even wage garnishments (like what is done for guaranteed student loans) if they do not keep up payments.  We may have to swallow some loan forgiveness, but I doubt it will break the bank and interest (kept artificially low, but not too low, say 3/4 the going rate) on the loans that get paid should cover the forgiven loans.  Criteria for such loans and forgiveness of same can be worked out politically, and will as such be bad enough to encourage people to attain coverage.

After parts 1 and 2 have been established, begin phasing out the deduction for employer-based coverage.

Part 3: Congress should use it’s enumerated interstate commerce powers to forbid states from disallowing interstate purchases of insurance or health care.  It should set up an insurance inspection agency whithin HHS that is specifically forbidden to set coverage mandates, but only empowered to prevent fraud and process loans.

That’s all I have so far.  It isn’t perfect, but would be far more responsive to the people than massive bureaucracy.  I am open to suggestions on how to improve on this idea.   Please leave comments.