John Cochrane Nails It

The country can have a vibrant market for individual health insurance. Insurance proper is what pays for unplanned large expenses, not for regular, predictable expenses. Insurance policies should be “guaranteed renewable”: The policy should include a right to purchase insurance in the future, no matter if you get sick. And insurance should follow you from job to job, and if you move across state lines.

Why don’t we have such markets? Because the government has regulated them out of existence.

Entire editorial in The Wall Street Journal worth reading.

Comments (13)

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  1. Joe Barnett says:

    The president likes to say that health insurance is a death spiral.

  2. Devon Herrick says:

    Critics point to the unpredictable nature of medical care and a lack of transparency as a reason self-insurance (paying cash below the deductible) doesn’t work. But a good part of the reason there is no transparency and receiving medical care is unpredictable is because third-parties pay 89% of all medical bills.

  3. Dr. Steve says:

    Obamacare is 2,000 pages and is a mess plus I think is unconstitutional.

    This is two pages and is something that would never be questioned regarding constitutionality. Plus this would work.

    The problem is it gives power to the individual not government and the elite. Do we trust freedom today?

  4. Brian says:

    We need a few key regulations, but yes, the bulk of legislation, regulation and interventions that needlessly keep prices up etc….needs to be removed.

  5. Don Levit says:

    In 1986, Blue Cross (and similar insurers) were stripped of their not-for-profit status, with the passage of IRC section 501(m). The primary reason was that the Blues had evolved into their for-profit competitors.
    I have much material from the IRS on this specific issue, as well as other for-profits, like debt counseling agencies and museums – over 30 pages of rulings, papers, etc.
    They all say the same main idea: to fully earn not-for-profit status, you must distinguish yourself from the for-profits. Specifically, in the insurance realm, you distinguish yourself by offering non commercial insurance. What is non commercial insurance? Insurance that is not available commercially.

    According to IRC section 501(m), to be a 501(c)(3) or (c)(4) insurer, you must offer products not available to the public.
    That is what 3 of my partners and I hope to do this year.
    We will be getting the financials from Milliman, an actuarial firm, this week or next. We plan to tweak these figures to provide an attractive product not available commercially. We plan to form a 501(c)(4) as a subsidiary of a for-profit life insurer that primarily sells annuities for teachers’ retirement plans in Texas.
    According to a recent study by the BLS, public sector employees and employers are paying over 11% of their salaries for health insurance. We plan to cut hat number at least by 50%, to make more room for 403(b) annuities.
    Don Levit

  6. LSmart says:

    Watch out. Part of ObamaCare is having the states set up Health Insurance Exchanges. 49 states have already taken grants from the federal govt to set them up.

    Whether it’s state-run or federal-run, government-run health care is coming our way.

    Call your state representatives and your governor and tell them NO. Tell them to return the “bribe” money from the federal government.

  7. Molly Crocker says:

    I am among the uninsured, but that’s because I have MORE choice than with insurance. I often hear this on the phone: “It could take several weeks for us to get approval from your insurance company before we can make an appointment. Oh, you’ll pay for it at the time of service? I see an opening on Tuesday.”

    The Crocker plan.

    1. Reduce the need for insurance! Allow me to roll over my Flexible Spending Plan from year to year, or pay into a savings account that’s MINE, not yours. I shall most certainly listen more closely to my doctor if it can save me money.

    2. We leave-share at work for fellow employees who have run out of sick-days. We should be able to share a limited amount from our Flexible Spending Plans as well, and be able to share beyond my employment pool.

    3. Disconnect the doctors from the insurance company. They should NEVER have to consult first before treating to see what will be treated. If you want to buy insurance, then YOU, the patient, should be wrestling with the insurance company for reimbursement.

    4. There’s a credit card with very low interest that helps pay for some medical procedures. If it gets you back on the road, you would be a good credit risk.

    What about the uninsured? Well, tell me how Obamacare is going to make people who have no money pay for insurance? Many of them are homeless by choice. How are you going to cure that? There are community health care centers around the country that are serving the poor pretty well. Obamacare will regulate them out of existence. The answer is local support, local control, local understanding and action on local problems. Yes, YOU need to be looking out for your neighbor, and stop assuming that paying your taxes is a contribution to the ‘charity’ of Obamacare.

  8. mary anne epley says:

    Molly Crocker has it right on. What a way to go! THANKS, Molly

  9. James Schwarz says:

    O’Bama’s Healthcare plan is UNCONSTITUTIONAL!!!!!

    The Supreme Court should STRIKE DOWN THE ENTIRE ACT!!!!!

    Then a NEW Healthcare Bill should be written, which covers ONLY HEALTHCARE, not all of the other garbage that the writers of this pathetic bill put in it!!!

    O’Bama stated that his healthcare bill copied the Massachusetts bill . . . . which was only 15 pages long!!!!!!!!! NOT 1,500!!!!!!!!!!! And has provisions that do NOT kick in for decades down the road!!!!!!!!

    Healthcare is an issue that needs to be resolved once and for all.

    But, most of all, the people deserve a health care bill written using common sense and common language that does NOT require a lawyer to interpt its meaning!!!!!

  10. Josephine O'Connor says:

    If this “health care” law is so wonderful how is it that all the Congress exempted themselves from it, Obama is exempt from it and Obama started exempt his followers, Unions etc. Before the ink was dried on the paper. Frankly I don’t want over paid flunky Federal or State bureaucrats to dictate my medical care or for my family. Neither do I want them to tell us it’s time to die.
    So if the Congress can exempt themselves from a “law” how is it the majority of us Americans have to obey the law. Just on that exemption alone I say this is not a law. Throw it out!!! Jo

  11. Liliana Wells says:

    Molly Crocker has it right. Even with over 2000 pages, the bill is ambiguous and wasteful. That’s par for the course of government run programs.

  12. John Bischop says:

    Why does truth have such a ring in it?

  13. Val says:

    Health care in ten easy steps.

    1) We must be free to buy insurance from any company in the U.S.

    2) Medical prices are transparent so people will know what things cost.

    3) Antitrust laws to prohibit secret insurance company/provider contracts. These do nothing but corner the market and obfuscate prices.

    4) No price discrimination based on whom is paying the bill.

    5) Manage risk through a reinsurance system.

    6) Twelve-month waiting period.

    7) Equal tax treatment between individual and employer-provided plans.

    8) Everyone has an HSA and high-deductible policy. Insurance companies are not involved until things reach a catastrophic level. Prior to Obamacare, a high-deductible plan was available for as little as $35 a month for a 25-year-old (in my zip code). That price is now $96.

    9) Beginning at age 30, insurance premiums increase by 10% a year for every year someone remains uninsured (or not on public aid, etc.). That’s what Medicare does. If seniors understand it will cost 10% more per year for every year they delay, 30-somethings can learn the same.

    10) The HSA/high-deductible model should be used also for Medicare. If people began amassing a health savings account when young, Medicare could be phased out except for those too sick to have accumulated an account. Medicare payroll taxes would fall and Medicare recipients would regain their health care freedom.

    Competition and free markets would bring prices down and raise quality. Of course, such a common sense idea will never float. There are simply too many vested interests getting fat off the current system.

    BTW, are you aware that the Comparative Effectiveness Research law is now assessing a monthly $0.11 fee per person on a policy? CER is the Life Valuation Panel that will decide what care you will get. Your doctor is becoming more and more irrelevant.