Health Insured Puppets

Healthcare and health insurance are two distinctly different things.  Healthcare is the care provided patients for their health.  Health insurance is how the patient affords and pays for that care.  Our healthcare system is the finest in the world, though not without problems.  Our health insurance system is atrocious.

Eighty years ago laws were passed that allowed employers to provide health insurance to their employees and take tax deductions for that cost.  Thus began our system of third party payer, which is the root of all that is wrong with our system today.

I have a simple solution.

First, legislate the tax deduction for employers away, and mandate a payroll increase for all employees on the company plan.  This formula for how much to increase payroll is negotiable, but must be equivalent to the actual cost to the employer.

Second, allow anyone to purchase insurance from any provider.  Providers must be granted access to buyers all 50 states.

The cost of any insurance policy is roughly based on three factors: what is covered to what extent, risk factors of the insured and deductable or co-pay.  Sounds like car insurance, homeowner insurance, business insurance, and any other form of insurance.  Health insurance is really no different on its face.

What gets covered under any policy is determined by what risk is acceptable and at what cost to either party.  One case might be the following.  A  25 year old in good health may opt to purchase catastrophic care with a high deductible, and pay for routine doctor visits and pharmacy costs out of pocket, in exchange for a lower premium.  A 55 year with diabetes would likely opt for more complete coverage, and a lower deductible in favor or higher premiums.

Who among us thinks about what this doctor charges versus any other doctor?  None of us do, because we're not paying for the service, the insurance company is.  And we're not paying for the insurance, our employers are.  For the most part anyway. Is that how it works when you need body work on your car?  Not at all.  You'll go get estimates form3 different body shops and pick the one you think suits you best.  Who is paying for that insurance?  You are.

We act differently when we're footing the bill.  We act more responsibly when we have something to lose.  But when your employer picks the policy and the costs, what do you care?  You go to the doctor and if eh orders a test and says go to a certain specialist or lab for it, you do.  You do not ask about costs and services provided.  You follow blindly along with the doc.

What the Affordable Care Act (ACA) did was mandate higher levels of coverage in the form of pre-existing conditions, adult dependents to age 26, no limit payouts over a lifetime, while mandating same or lower premiums.  Economists will tell you every time that this formula is a disaster waiting to happen. 

The ACA does nothing to lower cost of health care or health insurance.  What it will do is put insurance companies out of business.  We still need to get creative with how to pay for coverage of for people who cannot afford the minimum necessary.  This is a start and I don't have all the answers, but I trust in American ingenuity to find solutions.  And when I say American ingenuity, I don't mean the government.

Rep. Paul Broun, M.D. (R-GA) has another idea.  Click here.