Health Care Reform Simplified
Any discussion about fixing health care should begin with a determination of what, exactly, is wrong. Without vivid that, we risk fixing the corrupt things or breaking something that was working just fine. I contend that the main problem in the United States is the linking of health insurance with employment. Health care reform begins with severing that link.
There is no logical reason for health insurance to be linked to employment. We purchase our own car insurance, groceries, and housing, yet depend upon employers for health care. Why? It began with government mandated wage controls during World War II. Employers could not compete for employees by offering higher wages, so they began to offer “fringe benefits.” The government perpetuates this system by giving tax breaks to companies who provide health insurance to employees, while denying the same breaks to those who purchase their own insurance (unless they are self-employed.) This link becomes a big jam in a society where people no longer work for one employer from graduation to retirement. The problem of gaps in coverage between jobs was then covered by another government solution—COBRA. A better solution would be to sever the link between employment and health coverage by converting the current employer tax benefits into individual tax benefits. Insurance attached to the individual will follow the individual, not cessation with each job change. A lump sum tax credit per family member could be placed into family health care accounts, to be spent on insurance premiums or on medical services provided by a doctor or hospital.
To promote individual responsibility and awareness of health care expenditures, citizens could be encouraged to pay out-of-pocket for ordinary expenses and buy insurance for catastrophic events. Medical providers could provide discounts to individuals who pay cash, since such individuals would save administrative expenses and the headaches associated with filing insurance claims. Savvy providers could even offer contracts for providing medical services on a retainer basis, as attorneys do. Costs would come down as the payment system became more simplified.
To encourage affordable health care for the poor, and enable them to avoid emergency rooms for ordinary medical care, I suggest offering to double the charitable deduction for taxpayers who contribute to community health clinics. Such clinics could be managed by the states. Individual states could create models based on their own population’s needs, and such diversity would serve as a laboratory for discovering better ways to remark care.
Any solution needs to simplify the current system by making it responsive to the needs of individual families. By empowering individuals to effect responsible choices, my suggestions would benefit employers (less overhead) and families (more flexibility.) The government was never meant to be a health care provider, nor were most employers—unless the employer itself is a hospital. Trust people to take care of their own families, give them flexible choices, and most will do just fine.
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Filed under United Health Care by on Jan 28th, 2012. 