Health Care Reform

I have often posted about what I don't think we should do to reform health care in the U.S. I think I should post on what I thinnk we COULD do to reform health care.

First lets define the problem. Roughly 50 million people in the U.S. have no health insurance. But lets first put some context to that number. Lets subtract the following from it:
1. Illegal Aliens--15 million
2. People who could afford(make over $75,000) insurance but choose not to purchase it--10 million
3. People who are eligble for Medicare/Medicaid and do not sign up for it--10 million

That leaves about 10-15 million peopole who, through no fault of their own, cannot get or afford insurance. Some would claim it closer to 5 million.

Tort reform would be on the top of my list. It is easy to do. Estimates run from 3-10% of every dollar spent on health care goes to lawsuits. This does not even include the millions spent on defensive medicine. Remember though that tort reform is to limit puative damages, not compensatory damages. This means that a person injured by malpractice will still be able to sue for millioins of dollars, if that is what is needed to pay forthier medical care. They will only be limited in how much they can get in as punishment from the doctor.

Pre existing conditions are a tougher nut to crack. I know a person who bought a boat, but didn't buy insurance on that boat....until they day he crashed it. You can't wait until you get sick to buy health insurance. Unless of course you want the insurance companies to go out of business. The only way to get rid of pre existing conditions is to require everyone to have insurance. If we would go to this kind of model I think it should be based on people being required to have catastrophic insurance that pays after the first $5,000 or so of medical expenses. The government could subsidize people who could not afford this.
It goes without saying though, that insurance companies should NOT be able to rescind your insurnace when you get seriously ill becuase you forgot to mention on your application that you had acne when you were 20.

Insurance is part of the problem
If you have insurance, you are not the actual customer in the economic sense. You don't care what it costs. If your doctor wants a test every hour on the hour, you have no incentive to even question it. Think if car insurance covered oil changes, and regular maintenance.....how much more would insurance cost?

This is what I like about HSAs and other types of catastrophic insurance.
With High Deductable Health Plans(HDHP) you are put back in the economic equation, yet if you get seriously ill or injured, you are still covered.

Real insurance competition.
In the U.S. there are about 6,000 health insurance companies, yet Americans are severly restricted as to which ones they can choose by the state they live in. Open up the whole country to all of the insurance companies.

Allow insurance tax deduction
Allow insurance to be tax deductible. This will help to lower the costs of insurance.