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A sensible health law

There has been a lot of talk about repeal and replace.  I think in the public arena we need to have a clear option ready, and this is one crack at it.  Likely this sounds like someone else’s, but if I have read it somewhere before then I don’t know who to credit.

Each citizen should be allowed an account into which up to 22K should be allowable each year tax free (half the median household income). Money could be drawn out for

1) Education
2) Medical Expenses
3) Retirement
4) Up to 88k toward a home purchase as long as 44k remains in the account

The 22k should be allowed from any source (self, employer, family, neighbor) and the withdrawals need not be for the account holder or dependents. That is, you want to pay for your niece’s college or daycare out of the account go right ahead. You want to pay for your pastor’s heart surgery, go right ahead. As an employer you want to put in a hefty amount into the account as a benefit that is your prerogative. If you want to offer a benefit package of greater value than 22k then you would be able to offer an additional amount to anyone of the employee’s choosing (spouse, child, elderly parent, etc.).  All other benefits (each and every health care plan) would be fully taxed.  This would encourage people to purchase their own high deductible health insurance and to drive down the prices in the industry by balking at how much they have to pay for surgical gloves during a normal delivery ($60 in my case for just the gloves).  Since the insurance would be purchased individually there would be no loss in coverage when changing jobs.

The final issue would be having to re-purchase insurance when moving since many insurance plans are basically tied to a geographic area.  But have no fear – there is a solution.  Home and Auto insurance pay the policy holder rather than contractors based on the financial damage done.  The law could move health insurance in that direction so that a given payout is made for a diagnosis of lung cancer based on the average treatment cost.  Most insurance plans would probably pay ~80% of the average treatment cost for any diagnosed disease/injury above a deductible (probably $4000) leaving the rest to come from the individual savings account.  This payment would be made directly into the account, and if the payment amount is insufficient the recourse would be similar to disputing payouts for insufficient reimbursement for home flooding.  This would not be tied to any region or network of doctors.

Medi– would be moved to a system that pays individuals directly as well at a means tested lower level (treatment cost*(1-(individual’s household income)/(median household income))-(total assets above median household income).

So you can have 44k of assets exempt (home equity), but everything above that needs to be sold or given away before asking the government for help.  The payout for a family making 44k would be 0% of the average treatment cost while the payout for a family making 4.4k would be 90% of the average treatment cost.

(#4 is not critical, I just think it might be worthwhile)

The entire law would take maybe 100 pages and would be easy to understand.

How could this be improved?

* Note – for all the liberals who think that the poor would not be served under such a system, offer that if they so desire they will have the option to put up to $22k of their own money into anyone’s account each and every year and can do so for as many people as they want.

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