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Health insurance should be based on proven system for life insurance

  • Published in Letters

To The Daily Sun,
There is much dithering about the "Conservatives Have No Plan" to replace Obamacare. Why don't we try a capitalist approach to the system with minimum government interference?
We should model health insurance on the same proven system that offers life insurance. It could be a stand-alone policy or an adjunct to a life insurance policy. Policies could be either whole health or term as they are for life insurance. Rates would reflect either the current risk in a term policy or the life-long risk for whole health. Rates would be lower the earlier you buy the policy. For whole health, premiums in excess of the immediate risk pool requirements would be invested to provide for the more expensive late-life incidents.
Rather than only three options, all of them expensive, as there are for Obamacare, the health policies would have multiple options. There would be a bare bones low cost policy, there could be paid-up options. Special situations would be covered by a la carte options. The options would be priced separately. This would create a forest of opportunities and it would be a challenge to select the right mix. Most citizens are competent to make rational decisions to meet their needs because they are familiar with their particular needs. Insurance agents could be helpful in selecting an appropriate program.
I suspect that there would be legitimate functions for the federal government. There ought to be some percentage limit on the amount of "excess premiums" that can be invested in the company that issues the policy. The balance of the premiums would be invested in domestic or foreign stocks, bonds or hard assets (real estate, minerals etc.). Customers should receive annual accounts on the profitability of investments. Profits in excess of actuarial needs could be used to reduce or eliminate premiums or rebated to the policy owners.
Those who decide not to buy health insurance should be required to post a bond and to establish a Medical Savings Account. Those who need care and cannot purchase coverage would receive essential treatment. These humanitarian treatments would be passed on to the paying clientele as they are now.
I have not mentioned obvious steps that could reduce the cost of health care.
The logical first step would be to establish tort reform. This will not happen. Lawyers contribute heavily to political campaigns, and too many congressmen (forgive the transgression) and senators are lawyers.
Another step toward sanity would be to allow purchase of health insurance across state borders. Some states have created artificial and expensive barriers to efficient competitors coming in state to compete. The best requirement is financial soundness of the competing companies.
It is apparent that strides in medical treatments have outstripped the traditional methods for approving new protocols. (I'm under the impression that allowing the quest for perfection, delays adoption of what is merely better. Perfect is the death knell for better. People are saved from some problems and others die while waiting.)

Employer sponsored health care should be taxable, and the employer should determine how much, if any, contribution will be offered. Of course, policies will be portable because they belong to the employee. People are naturally more careful when they spend their own money.
There are already clinics that are less expensive than emergency room and perhaps preferable to co-pays to physicians. (Physicians should not be dealing with minor cuts, bruises, and colds.) We will have to see how this trend develops, or will government bureaucracy and tort lawyers stifle this logical step.
Of course, I am a cynic. If these steps were offered to Congress, they would pay enthusiastic lip service, but by the time they polluted them with adjustments they might be just as screwed up as Obamacare.

Dale P. Eddy