Change the Insurance System to Fix Healthcare

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The current revisions of the ACA are stuck doing more or less of the same, and so a revision that is "outside of the box" is necessary.  This plan would

1)     Provide care that is affordable no matter what income a person has

2)     Eliminate red tape and bureaucracy

3)     Maintain the individual’s freedom to select their health care

4)     Infuse money to stimulate the economy and drive medical discoveries

5)     Provide basic medical care to all Americans

6)     Incentivize employment

7)     Integrate/utilize both private insurance companies and a single payer system.

8)     Lower drug prices by inducing competition directly at the doctor-patient interface.

9)     Promote savings to fund long-term care as the Baby Boomers age

10)  Increase the transparency of health insurance policies

And you can keep your doctor!

And if you are healthy –you can keep your money! (Or at least save it for a rainy day in your HSA.)

High deductibles and having many healthy young people among the insured can reduce premiums drastically.  This proposed reform of the health care system will work by switching the burden of costs from the insurance premium to the deductibles.   Sliding scale deductibles, based on five-year rolling averages of AGI, are incorporated into health savings accounts--high deductibles for the wealthy, and low deductibles for the poor.  A Single-Payer-For-All (like Medicare) premium is paid via taxation but, will be low because all people, including the young and healthy, are part of the base, and because the deductibles will be high for the people that can afford them.

Details:

All Americans upon birth are provided with insurance through a single-payer. Since the entire population is paying in, including the healthy, the insurance premium would be much reduced.  It should be collected as a tax.  The insurance premium tax should be based on income, but also capped for the wealthiest Americans, so that no one must pay more than what a “Cadillac policy” would cost in 2017 dollars.   There would be the option to buy "gap" policies from private insurers to preclude the use of a high deductible, etc.  However, with basic insurance for all, no one would be subjected to catastrophic health costs.  Deductibles could also be capped at a certain level, though the very rich self-fund their health care anyway. 

Health Savings Accounts would be universal, and all initial payments (i.e. the deductible) for health care would come out of these accounts.   Thus, the public would have some motivation to spend their health care dollars wisely, but would not be hit by catastrophic health bills.   Eventually, paying your doctor directly, just like mechanics, architects, lawyers, and even some “concierge doctors” now, will become the norm.  But their HSA funds will provide a cushion to make sure money is accessible when care is needed.

 Those that are impoverished but still employed could be rewarded for their employment by having their Health Savings Account subsidized—by the government. Or, employers could use tax-deductible contributions into employees’ HSAs as a benefit to attract good employees. 

 The deductible should be eliminated for those that are disabled and impoverished.  For the rest—based on a say five-year rolling average of AGI—the deductible should be high—Say 10% of their five-year AGI.   This yearly deductible amount is used to fund the Health Savings Account.    To make the bite of paying the deductible gentler, the HSA rules should continue with the provision that both the amounts going in and going out are tax deductible, and amounts not used can be saved and invested, and used for long-term care premiums, etc. 

Currently, insurance premiums are a very high, fixed and ongoing cost.  Lowering insurance premiums to the minimum should lower costs for those who are healthy.  But even if health needs are pressing, the amount spent for a small premium plus high deductible should be as affordable as 12 months of a high premium, a moderate deductible, no chance to contribute to an HSA, and no consideration of family income.  

Now, it is important to structure the HSAs in a manner that will improve the healthcare economy.  They should not be over-regulated.  One of the biggest frustrations now, for both doctors and patients is the “pre-authorization” by insurance companies.   The preauthorization is a layer of bureaucracy that is extremely inefficient, a waste of time and money, and at times endangers patients.   If patients are deciding what they pay for medications, then the financial decision is between the doctor and patient as it should be.  Patients can be counseled about the pros and cons, instead of the doctor having to waste time reviewing the patient's chart to determine that an arbitrary step therapy has been met.  The doctor instead will have more time to spend with patients.

Another way to make drugs more affordable is to allow patients to pay their deductible for whatever the doctor prescribes, whether a send out lab test, herbal supplements, vitamins or another health care practitioner, etc.  The integrative health care industry is preventative, treating conditions at the root rather than after a disease develops.   If a patient could use their HSA dollars to buy supplements that treat the cause of a problem, then the pharmaceutical companies would also be competing with lower cost solutions, and would, according to the law of supply and demand, lower their prices.  Further, with a high deductible, drugs would be marketed directly to the patient and doctor, instead of having to go through the bureaucratic insurance approval process.   This insurance approval is problematic.   When the drug cost is high, insurance executives get anxious and come up with all sort of hoops to prevent "their" money being spent.   By blocking the use of a drug, insurers reduce the number of people that pay, (the demand) and thereby, increase the necessity for the pharmaceutical company to charge high prices.  

Eliminate the insurance middleman, free more dollars to flow into direct health care, and all levels will benefit.  Doctors will not be bogged down by so much ‘preauthorization paperwork.  More pricing competition among drug companies will result in lower prices.  Insurance will still be present so that no catastrophic expense will occur to a family.  Financial catastrophes are obviously related to a family's AGI... and this plan has a sliding scale for deductibles which makes health care affordable and fair for all.

The current health insurance environment lacks transparency.  Patients are not able to compare plans because they do not receive the fine print until after they have purchased the policy.  Drug formularies are fickle, and companies raise prices midstream.  Further, no one can predict the future and know what policy really would be the best for them.  Therefore Single-Payer Insurance which provides comprehensive coverage, after a deductible is reached, and sets forth a clear description of its provisions would be a vast improvement over the current situation.



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