We’ve built a culture of third party healthcare payment that has obliterated the idea of health care as an individual responsibility. So, even if we throw money at the uninsured, without personal initiative, it is just throwing good money after bad.

We can see this in Medicaid. Despite having access to healthcare, recipients continue to be sicker than the rest of the population. You cannot improve the health status of a population that does not prioritize and take responsibility for their own individual medical care.

It is so frustrating that my current home state restricts individual offerings so as to prohibit HDHP/HSA policies. They also mandate some coverages, such as for substance-abuse treatment, that lifestyle choices render me unlikely to ever need. I’m looking forward to a transparent national market, but do realize the potential difficulties with such should any consumer-protection issues arise.

I will soon be employed again by another staffing agency which offers some employer coverage. I am hoping that this time it will be a little better than my last such limited-benefit policy, which was great for basic needs ($10-15 copays) but had a lifetime cap of just $45,000 which could be exhausted with just a few days in the hospital. When I had that coverage (2004-06), I did take better care of myself than I might have in an HSA situation, where on my low income I would have tended to be very miserly.

I do worry about exposure to catastrophic illness, and wish that I had enrolled in the VA system before their embargo of January 2003. Veterans such as myself who have no disabilities or service-connected conditions can still enroll, but eligibility is now means-tested by both income and assets. Because my financial situation has deteriorated seriously in the past two years, I believe that I can now qualify.

If rates are higher than expected for the average consumer, then the likely culprits are things like excessive mandates to cover various services, or guaranteed issue without sufficient restrictions to prevent gaming the system.

Underwriting will only result in low premiums for some individuals. It’s not fair to compare a best-case quote to the average case.

That said, I’m not in favor of a government mandate for community rating. I just hate to see it blamed for the portion of high costs that are generated elsewhere. After all, employer-provided coverage is community rated, and while expensive it’s generally not as bad as Dana’s New Jersey experience.

I do think that any successful attempt to reform to the tax code will have to recognize that the employer exclusion is effectively a tax subsidy for community-rated insurance. It will be hard enough to reform the exclusion to end regressivity and employment discrimination without the added burden of overturning a 70-year precedent for preferential treatment of rate-adjusted coverage.

I’d like to see the two types of coverage continue to coexist: individual underwritten coverage with no preferential tax treatment, and a modified community-rated option with premiums roughly 2.5 times the cheapest underwritten rate, but which qualifies for a 20- or 25-percent tax credit to reduce the after-tax cost to equal the high end of underwritten policies.

But we do need an active, true health market. Unfortunately, the laws in New Jersey of guaranteed issue and community rating have made the rates high for everyone. The mandated policy benefits do not permit HDHP/HSA plans for individuals.

Rates in states that permit underwriting and HDHPs have more affordable options available. For example, A 57 year old, healthy non-smoking male in my area can get a popular major medical HDHP for $152 a month.

My state (NJ) has had a well-intentioned legislature that has attempted to guarantee availability for everyone. As a result, the cheapest individual policy I could obtain was a 40% co-insure EPO costing over $350/month. {Premiums on a traditional indemnity policy for my age and residence were in excess of my take-home pay!} I had to give it up last year after exhaustion of my unemployment benefits made keeping it unsustainable. For low-income families NJ has a subsidy plan similar to NY’s Healthy NY, but money in the budget ran out in 2000 to provide for single individuals; you can only qualify in NJ for this if you happen to have kids. [Healthy NY buys a single individual private HMO coverage for about $150/mo but only if you're earning about $12/hour or less.]

I would enjoy the opportunity to open a tax-sheltered HSA and get an affordable high-deductible policy to protect against catastrophic illness, but I haven’t been able to find an insurer offering this in my state. While HIPAA restricts employer-based policies from discriminatory practices, I think that this might be keeping me from employment opportunities at small enterprises. At 57, I could easily skew the group premiums if most of the workers are half my age.

Divorcing health care financing from employment would be a wonderful boost for our economy, because it would raise job-market mobility and liberate thousands who are stuck in jobs they don’t like because someone in their family has a health problem. A robust private insurance market would be created if the government would scrap Medicaid in favor of subsidized HMO plans for all. The government will need to remain involved with Medicare, because the risk profile for this group, like that for real estate in flood plains, does not lend itself to a profitable and competitive insurance environment.

Interestingly, the uninsured spent five times more money on transportation; and three times more on entertainment, than on health care. The under insured spent twice as much on recreation and nearly four times as much on transportation as on health care. As a percent of their total expenditures, the uninsured spent less of their income on health care (2.9%) than those on Medicaid (3.6%), the partially insured (5.5%) or the fully insured (6.6%).

Undoubtedly, some of the uninsured have a tough time when illness strikes them unexpectedly. However, the above analysis suggests many are young and healthy; and use their income on other goods and services.

Unfortunately, the analysis has not been updated. But it makes for interesting reading: http://www.bls.gov/opub/mlr/1995/03/art4full.pdf