There’s plenty of discussion elsewhere in this forum about the problems of health care in the U.S. This is my plan for a solution. I’d like constructive criticism. What are the weak points and how should I fix them? What are my omissions? What do you object to? Where is my rationale weak? It's rather lengthy, but please take the time and read all the points and let me know what you think. Thanks for your input!!
The Problem
The rapidly escalating cost of healthcare and health insurance; the growing lack of coverage and reduction of benefits; the growing numbers of uninsured; the detrimental effects on the nation’s overall health.
The Solution: Universal Health Insurance
A public-private partnership to provide health care to everyone regardless of income or employment. The principal features of the plan:
1. Every person in the country covered by health insurance consisting of two programs: Basic coverage and Catastrophic coverage.
2. The private sector providing health care much the same as currently.
3. The government as sole payer for catastrophic health care expenses, and for basic health screening and pre-natal screening.
4. Insurance companies providing Basic health insurance to cover the risk up to the catastrophic limit.
5. Subsidized Basic coverage for those unable to pay.
6. Everyone is required to be insured.
7. Everyone is required to have annual health screening.
8. Regional claims processing subcontractors to coordinate claims and payments.
9. Federal government as the malpractice insurer.
10. Reduce duration of patent protection on new pharmaceuticals.
About this Plan for Universal Insurance
Catastrophic Coverage
The Federal government will be sole payer for catastrophic health care expenses. For example, expenses over a per person per year cap will be paid in full by the government.
Basic Coverage
Private insurance will be the payer for health care expenses less than the catastrophic cap. Insurance companies will bid for a contract to be single payer for a given region. They’ll compete on the basis of best service and best payments to providers, and least expense to the insured. They’ll contract for a schedule of fees paid to providers and for premiums, copays, and deductibles to the insured. They may or may not offer dental and/or vision insurance as part of the Basic program, or as add-ons. Contracts will run on a yearly basis. Since the insurance companies won’t do their own claims processing, substituting one company for another will be fairly easy. The need to compete annually will keep this a competitive market.
Health Screening
The Federal government will pay for one basic health screening exam per person per year, and one pre-natal health screening for a pregnant woman. Perhaps basic vision and dental exams could be included, since they can escalate into significant health problems.
Fees for Services
A Regional Medical Board will set a fee range for every medical service. The actual payment to the provider will be somewhere in that range depending on their contract with private insurance. Those same fees as contracted for will apply to claims over the catastrophic limit. The fee schedules will be posted on the internet for public access.
Mandated Coverage
Every person is required to participate. A person who isn’t participating will be denied medical service. Any provider providing service to a non-participant will do so either at their own expense or on the basis of a cash arrangement with the patient.
Subsidies
Those who are unable to pay for the Basic health insurance may be subsidized by the public sector through a means-test program and direct payments of insurance premiums to the insurance company, and copays and deductibles to the providers.
Federal Malpractice Insurance
Providers will be insured against malpractice by Federal malpractice for a modest no-profit premium. Perhaps there could be a provision to assess physicians a penalty for multiple malpractice judgments. Tracking malpractice claims centrally should also deter doctors with high numbers of claims from picking up and beginning a new practice in another state. Since the risk is shared over a wider base and since it’s expected judgments will be limited in size and reduced in number, the premiums will be much less.
Patent Protection
Reducing the time a drug company can patent their new products will lower the cost of prescriptions and new medical devices. They will also not be allowed to renew patents on minor or superficial improvements.
Adverse Selection & Pre-existing Conditions
Adverse selection is an insurance term which refers to people who are sick buy insurance but those who are healthy don’t. Insurers contend with this by refusing insurance to those with “pre-existing conditions.†Since the risk will be borne by the entire population, as well as the cost, these two terms may be stricken from the health insurance lexicon.
Sliding Catastrophic Cap
Obviously people require more health care as they grow older. The flip side is young people who are healthy don’t use much health care. But to go along with this, young people starting out in life usually can’t afford to spend a lot on health care, either, and a major medical issue could burden them for a very long time. This situation would typically be addressed by graduated insurance premiums; greater for the higher risk. But since the risk is set by the cap, perhaps another way to address this would be a sliding catastrophic cap: lower for young people, higher for older people. The thinking here is that the sliding cap would compensate for the age-related cost of care; the Basic plan premiums for older people will be higher because of the higher cap, but the catastrophic costs will still be shared equally by the entire risk pool.
Health-Care Consumer
By paying for their own insurance, by publishing the costs of their care, by being offered Health Savings Accounts, it’s expected the patients will behave more like consumers: seeking the best service at the lowest cost, and not using more service than they need.
Shared Risk
Universal insurance will accomplish what insurance is supposed to accomplish: reducing the risk for any one particular party by spreading that risk over all parties. Pre-existing conditions, adverse selection, denied benefits, exhorbitant premiums, and cost-shifting will all disappear.
The Players
Federal Government
Primary and only payor for Catastrophic Plan claims. Subsidize insurance premiums, deductibles and copays for those unable to pay.
State & Local Governments
Relieved of current obligations to Medicare and Medicaid states and localities will be able to reduce state income taxes and local property taxes to the extent they’re now required to pay the states’ shares of these programs.
Insurance Companies
Primary payor for the Basic Plan. Contract with providers for service fee schedule and with insured for premiums.
Claims Processors
Regional claims process services receive claims from providers and are responsible for verifying the claim and services rendered, forwarding claim to insurance company, receiving payment from insurance company, and remitting payment to providers. The insurance company with the regional contract may NOT also be the claims processor for the same region (but may for a different region with a different insurer).
Providers
No change. Except: back-office and malpractice expenses will be greatly reduced. And physicians will actually be able to practice medicine instead of jumping through hoops to satisfy insurance company requirements or government Medicare requirements. They’ll be paid rapidly and a rate they agreed to be paid.
Employers
Employers will no longer offer insurance as a standard employee benefit, but may offer Health Savings Accounts with which employees can accrue funds to pay for their basic health insurance and copayments and deductibles, also other medical services not offered or paid for under the local Basic plan contract.
Patients
Responsible for purchasing Basic Plan insurance, getting annual screening, and paying copayments and deductibles (if able to pay).
Advantages of this Plan
1. Providing health care for everyone will improve the overall health of the nation.
2. The private sector continues to provide health care service, as that’s something they’re already doing well.
3. Competition for the Basic plan should foster good service and low cost.
4. Limited risk will dramatically reduce insurance company costs and thus premiums.
5. No uninsured will dramatically reduce provider costs and they won’t have to pass on these costs.
6. Federal malpractice insurance will dramatically reduce provider costs. Doctors who get too many judgments will lose their license to practice in all states.
7. Required health screening should catch health issues before they become expensive.
8. The Medicare, Medicaid, and Veterans Administration health care systems will be terminated since they have no purpose under universal coverage. The payroll withholding tax current assessed for these purposes may be eliminated.
9. Reduced patent protection retains a profit motive for new drug development but without excessively long periods of being able to price the product at non-competitive levels. Perhaps patent protection can be on a sliding term such that the protection is in place until the company has recovered the cost of development plus a modest margin.
10. A single regional claims processor will dramatically reduce paperwork for all system participants and thus the cost of filing claims and speeding payment, and taking out all the middle-men takes out each entity’s profit margin. Also divorcing processing from insuring removes conflict of interest.
11. The Regional Medical Board, consisting of a mix of providers, will be familiar with health care costs in their area and be able to set fee schedules realistically.
12. Requiring patient participation through insurance premiums, copays and deductibles, and publishing fees will get the patient involved as a medical consumer, fostering an awareness of the cost and competing for the best service at the lowest cost.
How this Plan Will Be Paid For
Because payroll withholding for Medicare will be eliminated for both employees and employers, there should be more take-home pay for employees . Those who are able will pay for the full cost of the Basic insurance plus their copays and deductibles. Employers may provide Health Savings Accounts as an employee benefit. The subsidies plus the catastophic expenses plus malpractice awards plus claims processing will be paid through additional tax levies to be determined.
Basic Plan – insurance premiums assessed against the insured. Those who can pay will be required to pay the full amount, plus their deductibles and copays (except for the free annual screening). Those who aren’t able to pay, or are only able to pay a portion, will be subsidized by the Federal government.
Catastrophic Plan – will need to be paid for by taxes. Since there won’t be any more payroll withholding for Medicare there will be almost three percent more take-home pay in an employee’s paycheck, assuming the employer passes on their half of the tax. Since the government is only picking up the health-care expenses over the cap, plus subsidies, and is no longer in the business of providing Medicare funding, hopefully the net tax increase (as there probably will be) will be small.
Note: About Non-participants
There will always be some who refuse to participate. Do we deny them access to the medical system? If we say no, then we destroy the whole concept of universal shared risk. My response is we do deny them because they have no insurance. If they want to work out some cash or barter arrangement, let’s look the other way when providers are willing to provide service under these arrangements. There will always be some willing to do that, so non-participants won’t be going without health care.
Final Note: Illegal Aliens
I know this question is going to come up: will illegal aliens be covered? My answer is yes, and my reasoning is this: they’re already here in the country and they’re already getting public assistance and health care. Under this plan they’ll at least be paying into the system through premiums for the Basic plan and their taxes, and they won’t be taking services out of the system as uninsured patients. Perhaps we’ll need a provision that they don’t get any services until they’ve been working and paying their taxes for a certain number of months. The secondary option is the same as outlined under non-participants.
The Problem
The rapidly escalating cost of healthcare and health insurance; the growing lack of coverage and reduction of benefits; the growing numbers of uninsured; the detrimental effects on the nation’s overall health.
The Solution: Universal Health Insurance
A public-private partnership to provide health care to everyone regardless of income or employment. The principal features of the plan:
1. Every person in the country covered by health insurance consisting of two programs: Basic coverage and Catastrophic coverage.
2. The private sector providing health care much the same as currently.
3. The government as sole payer for catastrophic health care expenses, and for basic health screening and pre-natal screening.
4. Insurance companies providing Basic health insurance to cover the risk up to the catastrophic limit.
5. Subsidized Basic coverage for those unable to pay.
6. Everyone is required to be insured.
7. Everyone is required to have annual health screening.
8. Regional claims processing subcontractors to coordinate claims and payments.
9. Federal government as the malpractice insurer.
10. Reduce duration of patent protection on new pharmaceuticals.
About this Plan for Universal Insurance
Catastrophic Coverage
The Federal government will be sole payer for catastrophic health care expenses. For example, expenses over a per person per year cap will be paid in full by the government.
Basic Coverage
Private insurance will be the payer for health care expenses less than the catastrophic cap. Insurance companies will bid for a contract to be single payer for a given region. They’ll compete on the basis of best service and best payments to providers, and least expense to the insured. They’ll contract for a schedule of fees paid to providers and for premiums, copays, and deductibles to the insured. They may or may not offer dental and/or vision insurance as part of the Basic program, or as add-ons. Contracts will run on a yearly basis. Since the insurance companies won’t do their own claims processing, substituting one company for another will be fairly easy. The need to compete annually will keep this a competitive market.
Health Screening
The Federal government will pay for one basic health screening exam per person per year, and one pre-natal health screening for a pregnant woman. Perhaps basic vision and dental exams could be included, since they can escalate into significant health problems.
Fees for Services
A Regional Medical Board will set a fee range for every medical service. The actual payment to the provider will be somewhere in that range depending on their contract with private insurance. Those same fees as contracted for will apply to claims over the catastrophic limit. The fee schedules will be posted on the internet for public access.
Mandated Coverage
Every person is required to participate. A person who isn’t participating will be denied medical service. Any provider providing service to a non-participant will do so either at their own expense or on the basis of a cash arrangement with the patient.
Subsidies
Those who are unable to pay for the Basic health insurance may be subsidized by the public sector through a means-test program and direct payments of insurance premiums to the insurance company, and copays and deductibles to the providers.
Federal Malpractice Insurance
Providers will be insured against malpractice by Federal malpractice for a modest no-profit premium. Perhaps there could be a provision to assess physicians a penalty for multiple malpractice judgments. Tracking malpractice claims centrally should also deter doctors with high numbers of claims from picking up and beginning a new practice in another state. Since the risk is shared over a wider base and since it’s expected judgments will be limited in size and reduced in number, the premiums will be much less.
Patent Protection
Reducing the time a drug company can patent their new products will lower the cost of prescriptions and new medical devices. They will also not be allowed to renew patents on minor or superficial improvements.
Adverse Selection & Pre-existing Conditions
Adverse selection is an insurance term which refers to people who are sick buy insurance but those who are healthy don’t. Insurers contend with this by refusing insurance to those with “pre-existing conditions.†Since the risk will be borne by the entire population, as well as the cost, these two terms may be stricken from the health insurance lexicon.
Sliding Catastrophic Cap
Obviously people require more health care as they grow older. The flip side is young people who are healthy don’t use much health care. But to go along with this, young people starting out in life usually can’t afford to spend a lot on health care, either, and a major medical issue could burden them for a very long time. This situation would typically be addressed by graduated insurance premiums; greater for the higher risk. But since the risk is set by the cap, perhaps another way to address this would be a sliding catastrophic cap: lower for young people, higher for older people. The thinking here is that the sliding cap would compensate for the age-related cost of care; the Basic plan premiums for older people will be higher because of the higher cap, but the catastrophic costs will still be shared equally by the entire risk pool.
Health-Care Consumer
By paying for their own insurance, by publishing the costs of their care, by being offered Health Savings Accounts, it’s expected the patients will behave more like consumers: seeking the best service at the lowest cost, and not using more service than they need.
Shared Risk
Universal insurance will accomplish what insurance is supposed to accomplish: reducing the risk for any one particular party by spreading that risk over all parties. Pre-existing conditions, adverse selection, denied benefits, exhorbitant premiums, and cost-shifting will all disappear.
The Players
Federal Government
Primary and only payor for Catastrophic Plan claims. Subsidize insurance premiums, deductibles and copays for those unable to pay.
State & Local Governments
Relieved of current obligations to Medicare and Medicaid states and localities will be able to reduce state income taxes and local property taxes to the extent they’re now required to pay the states’ shares of these programs.
Insurance Companies
Primary payor for the Basic Plan. Contract with providers for service fee schedule and with insured for premiums.
Claims Processors
Regional claims process services receive claims from providers and are responsible for verifying the claim and services rendered, forwarding claim to insurance company, receiving payment from insurance company, and remitting payment to providers. The insurance company with the regional contract may NOT also be the claims processor for the same region (but may for a different region with a different insurer).
Providers
No change. Except: back-office and malpractice expenses will be greatly reduced. And physicians will actually be able to practice medicine instead of jumping through hoops to satisfy insurance company requirements or government Medicare requirements. They’ll be paid rapidly and a rate they agreed to be paid.
Employers
Employers will no longer offer insurance as a standard employee benefit, but may offer Health Savings Accounts with which employees can accrue funds to pay for their basic health insurance and copayments and deductibles, also other medical services not offered or paid for under the local Basic plan contract.
Patients
Responsible for purchasing Basic Plan insurance, getting annual screening, and paying copayments and deductibles (if able to pay).
Advantages of this Plan
1. Providing health care for everyone will improve the overall health of the nation.
2. The private sector continues to provide health care service, as that’s something they’re already doing well.
3. Competition for the Basic plan should foster good service and low cost.
4. Limited risk will dramatically reduce insurance company costs and thus premiums.
5. No uninsured will dramatically reduce provider costs and they won’t have to pass on these costs.
6. Federal malpractice insurance will dramatically reduce provider costs. Doctors who get too many judgments will lose their license to practice in all states.
7. Required health screening should catch health issues before they become expensive.
8. The Medicare, Medicaid, and Veterans Administration health care systems will be terminated since they have no purpose under universal coverage. The payroll withholding tax current assessed for these purposes may be eliminated.
9. Reduced patent protection retains a profit motive for new drug development but without excessively long periods of being able to price the product at non-competitive levels. Perhaps patent protection can be on a sliding term such that the protection is in place until the company has recovered the cost of development plus a modest margin.
10. A single regional claims processor will dramatically reduce paperwork for all system participants and thus the cost of filing claims and speeding payment, and taking out all the middle-men takes out each entity’s profit margin. Also divorcing processing from insuring removes conflict of interest.
11. The Regional Medical Board, consisting of a mix of providers, will be familiar with health care costs in their area and be able to set fee schedules realistically.
12. Requiring patient participation through insurance premiums, copays and deductibles, and publishing fees will get the patient involved as a medical consumer, fostering an awareness of the cost and competing for the best service at the lowest cost.
How this Plan Will Be Paid For
Because payroll withholding for Medicare will be eliminated for both employees and employers, there should be more take-home pay for employees . Those who are able will pay for the full cost of the Basic insurance plus their copays and deductibles. Employers may provide Health Savings Accounts as an employee benefit. The subsidies plus the catastophic expenses plus malpractice awards plus claims processing will be paid through additional tax levies to be determined.
Basic Plan – insurance premiums assessed against the insured. Those who can pay will be required to pay the full amount, plus their deductibles and copays (except for the free annual screening). Those who aren’t able to pay, or are only able to pay a portion, will be subsidized by the Federal government.
Catastrophic Plan – will need to be paid for by taxes. Since there won’t be any more payroll withholding for Medicare there will be almost three percent more take-home pay in an employee’s paycheck, assuming the employer passes on their half of the tax. Since the government is only picking up the health-care expenses over the cap, plus subsidies, and is no longer in the business of providing Medicare funding, hopefully the net tax increase (as there probably will be) will be small.
Note: About Non-participants
There will always be some who refuse to participate. Do we deny them access to the medical system? If we say no, then we destroy the whole concept of universal shared risk. My response is we do deny them because they have no insurance. If they want to work out some cash or barter arrangement, let’s look the other way when providers are willing to provide service under these arrangements. There will always be some willing to do that, so non-participants won’t be going without health care.
Final Note: Illegal Aliens
I know this question is going to come up: will illegal aliens be covered? My answer is yes, and my reasoning is this: they’re already here in the country and they’re already getting public assistance and health care. Under this plan they’ll at least be paying into the system through premiums for the Basic plan and their taxes, and they won’t be taking services out of the system as uninsured patients. Perhaps we’ll need a provision that they don’t get any services until they’ve been working and paying their taxes for a certain number of months. The secondary option is the same as outlined under non-participants.
You mentioned non-participants in your OP.
