In keeping with Ronald Reagan’s idea that when faced with an important issue that affects us all, if you take counsel from ordinary citizens “The People” always know best. This simple plan, offered by an ordinary citizen (Nathan Sass) addresses the tackling of the actual cost of actual health care. Not the government’s taking over of the providing of health care or the reform of the health insurance industry, but the real life dollars and cents cost of actual health care. Which is the actual root of the health care crisis we all face. It is my distinct privilege to submit for your approval the Nathan Sass Health Care Solution.
The left and the right agree on some basic principles when it comes to health care: cover the most people (ideally everyone) and minimize the cost all without reducing quality and availability.
The left advocates “universal coverage” underwritten by the tax payer, while the right advocates for largely more of the same present system with limitations on elements of costs (i.e. lawsuits). With all due respect, both positions are wrong and do not address the core cause of the problem of rising health care prices.
The solution is to eliminate 3rd party payer insurance, whether it is provided by private firms or the Government.
Consider this. When a consumer goes to his provider and is covered by insurance, he has little reason to consider the costs of his “purchase”, save perhaps his co-pay. The provider likewise has very little incentive to keep his prices low, as it has little impact on his “sales”. Both parties are acting as they should, and it’s all because they are insulated from each other by the 3rd party payer (insurance companies, Medicare, etc.).
Try as they might, insurance companies can only put minimal pressure on providers to reduce their prices. In the end, they understand whatever reductions they cannot achieve through provider negotiations, they will simply pass along to the insured in the manner of higher premiums. Only then does the consumer see the impact of his or her purchasing decisions.
Today every major insurance company could be converted to a more market driven and economical Medical Finance Company without forcing them out of business.
Here’s the plan:
1. Medical Insurance companies will convert to Medical Financing companies.
2. These companies will offer a low cost annual membership (perhaps as low as $100 – $200 per year) that includes preventative care.
3. Legislation will require that employers will increase cash compensation to employees the equivalent to at least 75% of the total cost of health insurance premiums for that employee. Employers will be allowed to retain remaining share of health insurance premiums up to 25% of total premium costs of health insurance.
4. Potential members are not subject to credit checks to qualify.
5. Each member is provided a “credit card” tied to their Health Care Financing organization. They will use this card to pay for services at the time they are rendered, regardless of provider or type of service, subject to the cardholder agreements.
6. The Finance Company charges a minimal interest on the balance (i.e. Prime plus 1) and the debt is legally non-dischargeable in the same manner student loans are today.
7. A limited once per lifetime means tested repayment by the Federal/State Government of total incurred debt will be made available. This would be the only forgiveness of such debt allowed by law. Repayment would be made directly to the Medial Finance Company.
8. Consumers pay their balance down as they would any other debt, with monthly means tested mandatory minimum payments. Incentives for faster repayment can be offered at the Medical Finance Company’s discretion. Members can also deposit cash funds into their account for use as prepayment. These funds would be able to be withdrawn as cash at any time by the member.
9. Finance Companies can leverage their in force agreements with providers and offer their members the ability to use their “volume discount pricing” if they so choose. These providers will not constitute a limited network and will only be presented to members for the purposes of offering additional discounts over “street” prices.
10. Employers can provide the membership to their employees as an employer funded benefit and would be responsible only for the payment of annual membership fees.
11. Employer funded memberships are the property of the Member, and can be taken with them should they change employers or become unemployed. Members will be responsible for annual fees should they leave their employer in this case.
12. The Federal and/or State Government(s) agree to assume the costs for child birth and for catastrophic/chronic care for specified conditions (i.e. Cancer, HIV/AIDS, etc.) using funds previously set aside for Medicaid and/or Medicare. Medical Finance Companies would notify HHS/State of eligible charges and HHS/State will provide payment directly to Medical Finance Companies.
13. Catastrophic/terminal conditions eligibility and definitions will be enumerated specifically through the controlling legislation. The initial list of conditions and all subsequent member appeals for procedures not on this list will be reviewed by a panel consisting of appointees of the Executive Branch, Legislative Branch, AMA, and medical finance companies in equal proportions. Review panel member’s term durations to be set forth in the controlling legislation.
14. Low income individuals will qualify for Federal/State subsidies on their annual membership costs in the form of income tax credits.
15. Medical Finance Companies are permitted to market optional life insurance plans to their members that are tied to their balance and traditionally underwritten
16. Annual paid interest will be considered a tax deduction for income tax purposes, graduated based on income level, further reducing the liability of the low income consumer.
17. Medical Finance Companies are free to provide financing for any medical related procedure, including dental, vision, discretionary, cosmetic and/or non mandated procedures. The costs are borne by the member in the same manner as any traditionally covered procedure. States retain the right to regulate minimum procedure eligibility regulatory oversight.
18. Members choose where they wish to have their prescriptions filled, and the costs may be charged to the Medical Finance account or paid out of pocket, at the discretion of the member.
19. The need for Medicaid (i.e. Badger Care, etc.) will be eliminated. An appropriate portion of the funding will be redirected to cover items described in #7, 11, 12 and 13 above.
20. Medicare will be phased out. Any person who does not attain the age of 50 in the calendar year of passage will be ineligible for Medicare. Anyone age 50 or older will remain eligible under current rules and procedures.
21. Medicare funding and payroll taxes will be directly tied to membership levels, eventually fully phasing out at the passing of the last eligible Medicare member.
This plan provides low cost of entry for the consumer, places the consumer in total control of their health care decisions and give them the added power of full knowledge of price as a component of their decision making.
The costs to the taxpayer for heath care will be reduced significantly over time, and coverage will be available for nearly 100% Americans, regardless of age, income level, or employment status. Furthermore, disparity of quality of care between the lowest and highest incomes is reduced or eliminated.
Finally, no one is required to participate. If any individual chooses, they may pay on their own, but with the benefit of the market driven downward price pressures reducing their costs to the same level as those participating in a plan.
This is a proven plan in ways we see daily, but perhaps fail to recognize. Today Lasik Eye Surgery costs a national average of $1,800 per eye. In 1997, costs per eye were far more expensive, sometimes up to $4,000 or more per eye.
But since insurance does not cover Lasik, providers were forced to compete with each other on price, as well as other factors, and reduce costs. In the end, consumers and providers both win with higher quality, lower costs and lower prices.
There is ample reason to believe that this model can be used to provide the same results for all medical related expenses.
In the end, we all win.
