For probably the last two years, I have been reading (and writing) about health care reform. Well Patient Protection and Affordable Care Act (PPACA) (Obamacare) passed and while much of the law does not go into effect until 2014, on a daily basis you can read reasons for it and against it.
Some reasons you hear for it are..
-it is a basic human right
-there are 50 Million Americans without insurance
-it costs too much
-insurance companies make too much money
Some of the reasons against it are…
-I should not be required to buy anything
-Our Country can’t afford it
-“I do not need health insurance”
What if this was the design of health insurance in this country. We can mix it and match it..
If we made it similar to Auto Insurance, where the states have a “state minimum” liability” that was required by law. With Auto insurance that is usually all that is required by the state, the bank who holds your car loan might require more, and you as a consumer might also desire more coverage.
Let’s say the Federal Minimum coverage was a $10,000 deductible. I am a 45 year old male non smoker in the Chicago Suburbs. I could get a plan like that for about $60 per month (that is about the cost of a cup of coffee at many places). Now I personally have a $5000 deductible H.S.A plan for my family and I, but let’s just stay with the basics.
Everyone would be required to have a minimum of a $10,000 deductible. If you want a lower deductible you pay for that, if you want doctor visit co-pays and prescription coverage you pay for that.
Now here is where it would get interesting, if you have insurance for at least 18 months you can have no exclusions or increased premium for health medical conditions. You can change carriers as you wish as long as you always have coverage. If you do not have insurance, or have chosen not to buy it for any reason, you may have an exclusion rider on that condition for up to 18 months. After the 18 months, the exclusion is removed (If it is a law to have insurance, you should not go anytime without it, but some people do not have auto insurance in their required states as well).
The insurance companies would have a lifetime maximum of $5 million dollars on an insured. The United States Government, which seems to want to insure everyone at a lower premium, would then become the insurer for anyone whose medical bills have exceeded the $5 million.
The other part that needs to change is the 1986 law known as the Emergency Medical Treatment and Active Labor Act. Actually, in many ways it is a good law. It basically says you cannot be denied emergency medical care regardless of your ability to pay for it. That to me is the reason why people do not have health insurance and why hospital care costs so much. Some come and do not pay, so the ones that do pay, have to pay more to cover the ones who cannot pay.
No I do not want to see someone die, because the hospital is waiting to see their insurance card, but maybe the time has come to stop giving the “free pass” in those situations. Maybe if you are unable to pay, you can negotiate something less, but do not absolve the entire bill. The hospitals have to run like a business as well. Again, if they have the “minimum health insurance” their maximum exposure would be $10,000. Even if you had to make $100 per month payment the hospital would be paid though it would take 8 years to pay it off.
People make the argument that you can choose not to drive so you do not have to buy auto insurance. I agree with that, unfortunately everyone at some point will need medical care. We all participate in the medical system whether we want to or not.
While I sit on the constitution as the bill might be unconstitutional on a Federal level, on a state level it is not. So a State minimum coverage could work and might be the way to fix our broken system.
Thanks for reading.
Eric Wilson is President of I Sell Health, Inc. A Chicago based insurance agency. He has represents clients in Illinois, Wisconsin, Ohio, Indiana and New Hampshire.