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I’ve argued for the replacement of Medicaid/Medicare with reimbursement for a basic policy for exactly this reason. Right now, poor people get insurance but not health care, because no one wants to take Medicaid. I think giving them a policy from the companies that hospitals are happy to see is something that would sell big among those people, and maybe even break the current voting patterns.
I agree with this list and wonder if it would also make sense to have government matching of HSA contributions up to a certain amount, as some employers provide. If you’re below a certain income level or have a preexisting condition, additional funds could flow to the HSA. In that scenario, a poor person comes to the doctor not as a poor Medicaid patient, but on pretty much equal footing with everyone else. This type of system would have to replace all existing medical assistance programs (as John said) in order to be anywhere near cost effective.
The idea of inheriting accrued HSA funds makes more sense than it might at first appear. I’m familiar with a family that had an angry split over end-of-life care for a family member. Some members insisted the afflicted would not want to have their lives extended for little chance of hopeful positive outcome while others insisted no amount of money was too much to spend for even the slightest chance. Of course, that money being spent wasn’t their own money, and I’m sure they would have thought differently if they were not spending someone else’s money. Knowing that money is affecting one personally should push toward more rational end-of-life decisions (where most medical costs arise) for family members, and for me personally, knowing that my passing would leave my family in a more secure financial position would make the end more comfortable for me.
This is exactly what I was thinking of in point 8, but I decided to leave it to readers work out the second-order implications.
One devil’s advocate note: the VA has a lot of experience and expertise dealing with a lot of issues that are almost exclusively combat related, that ordinary hospitals aren’t as accustomed to dealing with. I would like to see that capability preserved in some manner.
Sorry to quote myself, but by government I would push as much of this as possible down to the state level.
One other thing I might also add is to encourage Direct Primary Care arrangements. My wife and I pay a reasonable subscription price to a doctor’s group that gives us access at pretty much any time. The focus is on preventative care, and health monitoring, and I’ve lost 43 lbs and improved all my bio-markers substantially. It’s a completely private arrangement and no insurance is involved, but since we have an HSA, that’s not been an issue.
Go big or go home. Perfect!!
I’m pretty despondent that it won’t happen right. It’s getting harder and harder in the trenches.
Nope. Or rather, let that be up to the veteran who chooses to spend his money of their services. Veterans with service-related conditions should have the corresponding funds directly deposited in their HSA. Let the former VA providers compete for those dollars.
What’s the unique value of a government-based Health Savings Account? Why can’t a person establish a plain ol’ savings account with a private bank, and thereby be more sure that the money can be spent without restrictions?
The advantage is just that contributions to the account and accruals of interest and capital gains in the account are tax-free. I would prefer that all savings accounts be tax-free, but if we’re going to tax savings, I’d prefer that savings for as many things as possible (health care, education, etc.) be tax-free.
There is a precedent for this in that in most of Europe health care is exempt from VAT.
John,
Sign me up right now. All systems go, just launch the damn thing.
Regards,
Jiim
I have not thought this through carefully, but: Aside from the ‘why does everything good have to be a government entitlement?’ points, these worries occur to me.
This is a big part of why ‘why does everything good have to be a government entitlement?’ is relevant.
Yeah, I’d sign on to this plan in a heartbeat.
Yes. Yes. Yes.
Can we please get this on the main feed so we can share it far and wide.
Please and thank you.
John, I hate to go all Instapundit on you, but I see insufficient opportunities for graft.
And it feels like a B. Add some charts and graphs to bulk it up a bit.
Shakespeare for everybody!
Most or all of this is true, but it’s also largely true of the existing system. I think the point is to remove the government as much as possible from the health care provider side of the system and put the money directly into the hands of the consumer where at least some market forces may come into play. In the current system, very few people actually pay for health care directly, so this would be a movement toward that.
This contains many elements of the Singapore healthcare system with which I have experience. It is one of the best healthcare systems I have ever been treated under.
With HSA’s, the expertise would go to where it is most needed, the expertise field would grow and veterans would become motivated patients.
Likely the best in the world overall, maybe Swiss but that’s a debate. Not perfect but nothing is.
The element I like about it the Singapore system is the 401k style HSAs with funds that are transferable to heirs. The system that developed around it is wonderfully simple in the way it controls costs: people are responsible for their own money
Currently, health insurance has more than a deductible attached to it? What does your plan say about co-pays? I assume you just get rid of them. Why have a yearly limit but not a life time limit? It seems to me that a major accident might break the bank still in a year. I guess it depends how big the yearly limit is, but if it is very large it’s basically unlimited then anyway.
How do you keep mission creep down. Once you make this national system what prevents the government from tweaking it and arguing that it should negotiate with health providers because it can achieve more cost saving?
This is exactly what I had in mind on a different thread when I said we need radical reform – not going from “A” to “B”, or even “A to “Z” – we need to go from “A” to “11”.
So assuming we all agree something like this makes sense – is there any realistic* possibility something like it could actually be introduced and advanced in Congress?
*Realistic – on a scale of 1-10, where 1 is “Somehow Trump won the election” and 10 is …I don’t even know what to posit as 10 – interstellar alien invasion defeated by a virus written on a Mac a la Independence Day?
Lots of good ideas here and good discussion. Just what I come to Ricochet for. Thanks, John.
I tackled the situation here and this was essentially the conclusion that I reached. Queuing for the indigent seems preferable to the current system where all comers are treated as equals regardless of their ability to pay.
This gives the poor the illusion that they have the right to healthcare far above their ability to pay for it, which is socially corrosive.
Yes, co-payment would be eliminated, as the universal insurance is a pure reimbursement of expenditures in excess of the deductible. Co-payment seems to me to have nothing to do with insurance but rather a scheme intended to reduce frivolous expenditures in a third-party payment system (which is what “health insurance” in the U.S. really is). Do any other kinds of genuine insurance (fire, auto) have co-payment? There is no co-payment in health insurance in Switzerland—you pay everything up to the deductible, then they cover anything beyond it. (One small exception: if you have a prescription for a drug for which a generic alternative is available and you prefer the prescribed brand, you have to pay the difference in price. I believe this is a recent innovation; I never encountered it until about a year ago.)
I suggested a yearly limit because you can’t fund unlimited benefits with finite revenue. The absence of a life limit is because that would be untenable in the face of stories about people dying because they reached it and couldn’t receive life-prolonging treatment. If I were designing it, I would not have a step function yearly limit but rather something like an exponentially smoothed moving average over time (kind of like income averaging for the income tax) so that you would “bank” credit when you used less than the limit to use when hard times befell you. However the limit was calculated, it would create an opportunity for private insurance to kick in over the limit. Since the limit would be rather high, this “hyper-catastrophic” coverage would probably be rather inexpensive.
I don’t have an answer to avoiding mission creep. That has been a failure mode of every government program since antiquity. The goal should be total separation of medicine and state; implementing a true insurance (reimbursement) system would certainly be an improvement over what exists today. But just as auto and homeowners’ insurance companies may require multiple bids for repair work, there will probably be some constraints imposed on health care providers. But placing the patient in the position of a customer, and providers as vendors who must post transparent prices has to be a substantial improvement over the total opacity of the present system.
I’ll ask again – are we just building castles in the sky, or could something like this ever actually happen? John, given your background I assume you have some connection, however tenuous, to the political power structure in the US. Can you plant a bug in someone’s ear?
Disagree, Insurance companies are incentivized to minimize expenses, while maximizing premiums. According to economic theory, competition among insurance companies ought to drive premiums down.
Yes. Not sure what I was thinking putting insurance companies on that line.
Yeah, I agree with this. I think the healthcare safety net should be a definite “floor” of care. I believe that in most countries that have a public healthcare provision, you receive much better care if you have private insurance (and it’s also apparently the case here with Medicare supplemental insurance), which is as it should be. Although I would prefer a completely private system with little or no government involvement, that doesn’t appear to be feasible in this country anymore. The next best thing is to ensure everyone has very basic level of care and if you want better care, you pay for it from the fruits of your successful endeavors.
One of the best benefits of something like this is that, with a high deductible, doctors will once again work for patients rather than insurance companies and the government, as is the case now.