Free-Market National Health Insurance

Patients would pay 50% of every medical bill out of their own pockets, subject to a limit: 25% of family income above the poverty level. Government would pay the other half. Although the author doesn’t say it, the government today is paying for almost half the cost of private health insurance through the tax system, so this would not be a huge departure from the current way care is paid for now. Plus, there is this:

The features of this program that promote a more competitive free-market among health care providers include: (1) no restrictions upon people’s choices of doctors and other health care providers; (2) no restrictions upon what proven health care is prescribed; (3) no restrictions upon what providers charge; (4) no restrictions upon how much providers are to be reimbursed for what they charge, except for care not subject to the normal constrains of supply and demand; (5) no restrictions upon entry into the medical profession, except as is necessary for quality control; (6) a large co-payment that motivate people to be prudent health care shoppers; and (7) transparency regulations that enable people to be prudent health care shoppers. This is not a program of national health care; it is a program of national health insurance only.

What do you think, folks? An improvement over what we have today? Post at the Health Affairs Blog.

Comments (8)

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  1. Bob Hertz says:

    Many good points here, but two questions:

    a. Preventative care is to be free.

    If that means a $125 annual checkup with a nurse or junior Md, that sounds fine

    If that means a $5,000 Mayo Clinic physical for each person, look out.

    b. The 10-70 rule could raise its ugly head.

    70 per cent of costs in most health plans come from the 10% of persons with heart disease, cancer, stroke, car accidents, psychosis and addiction, premature babies, etc.

    They blow right past any deductible. Not addressing their costs would mean that this program would save very little money at all.

    Bob Hertz, The Health Care Crusade

  2. steve says:

    Can I be on the panel of distinguished doctors? Seriously, how do you choose them and who chooses. I think it would be great if we stopped paying for care that does not work. Getting it past the interest groups is hard.


  3. Linda Gorman says:

    And how does one determine income? Over what period? And what about wealth? Making this work would require extremely invasive reporting.

    Finally, why is this plan superior to the consumer directed plans that were developing before ObamaCare? And the ones that would have developed quickly if the tax treatment of employer provided and individually purchased insurance had been available.

    Not to mention what would have happened if Medicaid and Medicare reform had been taken seriously.

  4. Greg says:

    Yes. An improvement over what we have today.

  5. Greg Scandlen says:

    I’m not sure why a 50/50 coinsurance would be better than a universal deductible with an HSA. I guess I have a well-earned paranoia that if the government pays for 50% of every transaction, it will have 100% knowledge of what each of us is doing. Then President Bloomberg can really crack down on those who are misbehaving in his opinion. Sorry but my trust in this government has reached 0%. I would prefer to keep my own money and pay my own bills.

  6. Gabriel Odom says:

    “Consider a family of four. Suppose that this family’s annual income is $53,050, about the median for U. S. households these days. The 2012 poverty guideline for a family of four within the 48 contiguous states is $23,050. Thus this household’s yearly cap on co-payments for 2012 would not be reached until it owed $7,500, a considerable amount indeed.”

    This is still less than the $20,000 in insurance premiums that same family would be expected to pay under ObamaCare (See page 56 of this IRS pamphlet: )

  7. Bob Hertz says:

    Gabrial– thanks for including the IRS memo. The pages that you cite are such bureaucratic gobbledygook that at first I thought this might be a satire.

    But it is not. This will be a disaster.

    However, and this is just a reminder, a family making $53,000 is not expected to pay $20,000 a year. If they do not have employer coverage,the subsidies will kick in and their real cost is about $4000 a year plus the out of pocket limit.

    Only first they have to be sure they are eligible for the subsidies!

  8. Floccina says:

    Much better than ACA but of course much prefer this:
    The state would provide insurance to all Americans but the annual deductible would be equal to the family’s trailing year adjusted income minus the poverty line income (say $25,000 for a family of 4) + $300. So a family of 4 with a trailing year adjusted income of $30,000 would have a deductible of $5,300. A family of 4 with a trailing year adjusted income of $80,000 would have a deductible of $55,300. Middle class and rich people could fill the gap with private supplemental insurance but this should be full taxed. This would encourage the middle class and rich, who are generally capable people, to demand prices from medical providers and might force down costs. They could opt to pay for most health-care out of pocket while the poor often less capable would be protected.
    It is not a perfect plan but it might help. Some deregulation of health-care would also help the poor gain access. The gauntlet that Doctors have to run these days to get to practice seems like an anachronism in today’s world. Let smart people get to practice medicine after on the job training. Let the medical businesses decide who is qualified to practice medicine. 12 years of training to tell if my child has an ear infection is overkill and reduces access to health-care for the poor.
    Another benefit of my plan is that it would encourage capable Americans (the rich and middle class) to be a counter weight politically against the providers.

    Why stop at 25% on income? Seems much too low to me.