Tuesday, November 18, 2014

Affordable Medical Insurance

Now that the Affordable [sic] Care Act has been revealed as a legislative scam and may shortly be facing its legal and political comeuppance, let’s think about what real reform might look like. Once again, I claim no special expertise, nor do I think that I have all the answers, but there has to be a better solution than another legalistic monstrosity like the ACA or some bureaucratic nationalized monopoly. Here are a few ideas that I’ve gleaned from my observations.

Provide a tax credit for medical insurance and divorce said insurance from employment. The income tax isn’t going away anytime soon, but we can protect the employees while ending the dysfunctional relationship between employment and medical insurance and bring the ultimate consumers back into the decision-making role. (Using my present employer as an example, that would mean a $5,000 to $10,000 raise per year for every employee.) The market will provide a range of options from costly, comprehensive health-management plans to inexpensive, catastrophic insurance policies.

Eliminate statutory barriers in the interstate insurance marketplace. Laws and regulations that hinder insurance providers from operating across state lines artificially reduce competition and drive up costs in disadvantaged markets. We sign onto international free-trade agreements, but we don’t even have free trade within our own country.

Establish a non-profit public insurance corporation as a moral equalizer. If an agency operating at cost can provide better service at lower prices than can “greedy,” profit-driven insurance companies, then the market will force down overall prices. A public option can also guarantee access to insurance for customers with pre-existing conditions and for other uninsurable individuals.

Finally, you’ll notice that I’ve been talking about medical insurance. Health care is a more holistic concept and can’t be properly insured, because insurance is a means of mitigating unpredictable financial risk. Health care involves routine, predictable expenses, so trying to allay such costs through third-party agency is less efficient and thus more costly overall. That, of course, is exactly what we have been doing, which explains why health insurance is so ridiculously expensive.