A Healthier America

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First off, my solution is an incremental plan, so it would not immediately affect anyone over 30, but I will address it.

For most of the population between the ages of 18 and 40, Health Savings Accounts offer, at least, part of a solution. They are the individuals money and they can take them from job to job without loss of benefits. Right now, if I pay into an insurance plan, say $5,000.00 to a really good plan over the course of several years and never use it, then switch jobs, I lose everything I’ve paid in (and the insurance company keeps it as profit) and have to start over. Maybe the job I pick up doesn’t have as good of a plan, so I’ve been downgraded and never saw the benefit of paying for the higher rate insurance. I think that is stupid. Secondly, because HSA’s are the individuals money (not someone else’s, which is the case with a public plan AND the current system), they are more likely to perform their own personal cost vs benefit when it comes to things like prescriptions. I think this is absolutely necessary; we have created a culture of over-prescribing unneeded medications out of convenience. This is why drug companies constantly run ads on the TV and “wine and dine” the doctors who prescribe them.

So, let’s say that $200 a month, or roughly 10% of one’s income, is placed in an HSA (this can be split with employers or not. I recommend not. Health Insurance contribution by employers is part of the employee’s compensation package, if the employer is not making the contribution, that amount is then added to the employee’s monetary income. Either that, or the employer can front a year’s worth of funds to establish the HSA so there is an immediate balance in case it’s needed. These are specifics, however, so let’s stick to the general idea. The particulars will certainly require a significant amount of negotiation, so we’ll discuss them later, if you would like). That equates to $2400.00 annually. Now, because this is a savings account – it can be non-profit or for profit – it will accumulate interest. Over a decade (when our hypothetical citizen reaches 30), he’ll have $24K in contributions to the account, not counting interest. As his income increases over time (as most people’s do), his contributions may increase. So, let’s assume that he is contributing $300 per month during his 30’s, and has yet to need any significant medical procedures. Now, he has $60K in his HSA, and so on. That money can be used to pay for prescriptions and minor care as the individual ages. Clearly, most people will dip into that to one degree or another over the course of the 10 years, but few will actually deplete it, or even come close. This will cover urgent, but not life threatening illness and/or injury. A husband and wife can pool their HSA if they so choose, but again, this is getting into the particulars. For most routine doctors visits and general health maintenance, the cost is out of pocket. Doctors will then be forced to set their rates according to what their market can pay, not get what they can from insurance and bill the patient for the rest after the fact (screwing up your credit because they told you it was covered by insurance, but neglected to mention only half…don’t get me started).

That being said, in the world of health care, $24K, $48K, $72K is chump change when it comes to major procedures. That’s where catastrophic insurance comes in to cover severe illness and injury. These plans are relatively inexpensive, much like life insurance plans, and have a very high deductible, usually $1000 to $5000, or even $10,000 dollars. If the individual is seriously injured or becomes ill, the catastrophic insurance is used and the HSA covers the deductible. When it comes to major procedures, maintenance cost should be included. For example, let’s take a pacemaker installation; the procedure costs $200K, follow-up work costs another $50K, and initial prescriptions $24K, and maintenance medications $200K over 20 years, whatever. The total cost of the procedure is not $200K, but $474K. This would be covered by the catastrophic insurance policy, which cannot deny any required procedure the patient may need.

While I hesitate to support a government option in any respect, I understand that some form of government contribution is going to be necessary (practically and politically) in order for the system to function. Hence, I propose a state program that will make contributions to the HSA’s of children and students, neither of whom can generally afford insurance coverage of their own. This could be administered through the school they’re attending, but would stop upon graduation, as they are expected to GET A JOB. They will also be expected to make their own contributions from part-time pay earned while they’re going to school. Once government contributions cease, compulsory contribution ceases as well, but the HSA doesn’t go away. It will stay and accumulate interest until the individual decides they’re going to use it. Perhaps the government should withdraw the unused funds, leaving a set balance in case the individual does need it shortly after entering the workforce.

For the unemployed and those who cannot afford to put $200 a month into an HSA, there are a billion charities all over the place that offer assistance (part of the problem is that there are so many, which increases the administration costs of non-profits), and I think that just a fraction of the money people donate to the non-profits advocating one side or the other in an attempt to influence the current debate, that would cover many of those who cannot afford health care. Americans are willing to donate to good causes, but few people see the direct benefit of their donations and non-profits have become a new way for some to make money without having to actually work (look at the CEO of many of the big non-profits, they make BIG money). I also think the government needs to do a better job of regulating the aforementioned non-profits, but I digress. Government should not be the first option, I generally believe people who are capable of working, but unable to secure gainful employment, should exhaust all other option and only turn to the government as an absolute last resort. That being said, if charities are unable to support, they may turn to the state for temporary HSA contributions until gainful employment can be secured.

For the chronically ill and in firmed (i.e. unable to work due to mental illness or physical ailments), various programs administered by the states can cover them, much as they do now (although the quality of care is dismal).

The system would have to be phased in over time, with a separate set of temporary overhauls affecting the older age groups and designed to prep (if you will) the future generation for the HSA system. Ultimately, the goal is to eliminate programs like Medicare, Medicaid, etc. and to have a sustainable system (neither one of those programs are remotely stable), even into retirement. I’m not suggesting a system where we cut out the elderly, not at all, but I believe we can devise a system that remains privatized and insures everyone adequately.

I believe emergency care should be provided to the public just like police or the fire department. If your house catches on fire, the government will put it out, but rebuilding and replacing lost belonging is your responsibility. ERs will stabilize you, the rest is up to you.

Ultimately, any prevention program will hinge on the individual, unless they’re going to be forced into being healthy by government authority, which is my fear with a government administered system. Now, I imagine that since HSA funds cannot be used for anything other than health related expenses, people will be more apt to use them for preventive medicine. If the catastrophic insurance payment rates are lower, in comparison to today’s system, it is possible that our system could shift to a focus on maintenance, since that’s where the higher profit margins will be (all of which would be relative). Also, marketing programs would need to be implemented to raise awareness. I truly believe, however, that our diet is mostly to blame for the cost of health care. If we overhaul the system to something similar to what we’re discussing and clean up what we eat, we will have a stable, sustainable, and private system that benefits the individual instead of industry and interest groups.

There are also a number of other repairs unrelated to the health care industry that do affect our health, the first being diet. We’ve trained ourselves that food comes from the supermarket, most of which is heavily processed and extremely high in sodium and a ton of unpronounceable nonsense. It is a proven fact that high sodium diets are a contributing factor to hypertension, which leads to heart disease, which is the number one cause of death in the US. I also suspect it is closely related to diabetes in this country, although I am unaware of any study proving as much. The decades between death and the first signs of hypertension and/or diabetes is loaded with extremely expensive medical treatments, everything from drugs to procedures to, in many cases, surgery. All this prolongs the life of the patient, but doesn’t solve the problem; we eat too much junk, in my opinion, because of government subsidies for the massive farming/industrial complex that processes food for a national (and global, for that matter) market. This is a problem, not that such foods exist, just that it’s just about the only thing you can find at the supermarket. In the last few years, I’ve found myself rapidly become much more of a Loyalist Agrarian; support your local farmers, it’s healthier and tastes SO much better than the processed junk. Again, I’m off on a tangent.

Another fix we must implement is tort reform. Law suits are out of control and cost doctors a ridiculous amount of money in malpractice insurance. Cap awards, increase criminal punishment for malpractice if it is that much of a problem, but every time malpractice pays out, we must cover it. It’s that simple. Also, we need a federal standardization of health care regulations, not 50 different regulations or one set for each state. This creates a massive administration overhead which we, again, must pay for in insurance premiums. A regulatory overhaul here will instantly bring down administration costs lower than any government agency could.

So, in a nutshell, is my suggested solution to both our current system and the impending failure of the proposed government reform.

My biggest problem with government administered health care for everyone is the fact that the one entity with a monopoly on force is now responsible for the health of the individual. The implications of that are scary. I don’t trust the current system anymore than I trust a government system. There needs to be more of a balance. Keep the system largely private while government institutes regulatory overhauls, that’s its job. Not to administer, but to regulate. There’s huge difference between the two.

I also want to submit that I am fully aware my suggestion is incomplete and imperfect, as any system is going to be, which is why I believe a public dialogue is required to fix this problem. I am open to discussion on this and certainly not dead set on really anything I have outlined in the aforementioned text. If we’re going to fix this problem, we need to let go of our ideological differences (not our principles, I’d never advocate that) and have an honest and genuine discussion. I am eager to read your thoughts.