IMO, this is why you’re health insurance should be YOURS! That means YOU Purchase it and YOU take it with you from job to job.
Here’s the scenario:
1) You graduate from College, get your first job, and purchase health insurance a la carte and from a nationwide list of health insurance companies. If its a good job that previously used to provide health coverage, you would be paid that money and any monies used for purchase of said health insurance would not be taxed as income.
2) If you were allocated $8,000 for health insurance and spent $5,000 (costs would have dropped because of the ability to shop a la carte and across state lines) you can put the remaining $3,000 in a tax free health savings account.
3) After 5 years, you get a more attractive position at another firm that offers a better salary and more money for health insurance($12,000) You’re married now, and your costs are $9,000 annually.
So at the end of 10 years, you’ve had excellent coverage, and have $30,000 in a health savings account. You’re chances of a pre-existing condition are less because you’ve had this insurance since you’re 22. You go from job to job and take it with you.
Now if you had a medical condition since childhood, you would obviously have to spend more for insurance, but the a la carte and buying across state lines would make insurance so much more affordable. In addition, the health savings account would be quite beneficial.
The motivation behind ANY legislation re: the health insurance business should have been reduced costs and improved care. THIS LEGISLATION WILL RAISE COSTS AND REDUCE THE QUALITY OF CARE!
The United States of America has the best health care in the world. The liberals have been able to reframe this as a debate about health CARE when its really about health INSURANCE! De-regulate at the state and federal level and let the buyers and sellers set the prices for insurance.
PS: I live in NY state. If you purchase health insurance, there are reportedly 41 conditions you MUST be covered for when buying insurance. A 22 year old has to be covered for the same 41 as me at 50. This is nuts!
I don’t take the insurance provided by my current employer as I am retired and covered by my previous employer. By not taking the insurance, I am saving my current employer $19,000 for a family of four policy. By NY State law, I can not use it as a secondary policy at a reduced rate as that is prohibited. In addition, I can not be paid that money to put it into a health savings account. So, in theory, I make $51,000 and my co-workers make $70,000.
GET THE GOVERNMENT OUT OF THE WAY!
Believe me I agree.
I liked the general thrust of your idea, and in fact have advocated something like that for years myself.
However, you wrote: “Now if you had a medical condition since childhood, you would obviously have to spend more for insurance....”
Here’s one solution to the pre-existing condition problem that is free-market oriented. Consider first that if anyone in your family has a condition and you get a job with an employer who provides family health insurance, your family member’s pre-existing condition is usually automatically covered anyway. In other words, insurance companies are always routinely taking on such patients as people shift from job to job.
The problem is that if you try to enter the individual market, as you advocate (and I completely agree) then insurance companies WILL deny coverage for pre-existing conditions. Furthermore, in the present individual market, if a number of people get sick in the pool, the pool will start to shrink as premiums escalate to cover them over time. The healthier people just go elsewhere for coverage.
So, what we need to do is first get employers out of the picture, transferring their present health insurance payments to the employees pre-tax, as you advocate (and I agree.)
Next, and THIS IS THE KEY to the whole pre-existing condition mess: By law, whether state-wide, region-wide, or country-wide, dictate that very large pools be formed segregated into 5-year age ranges and sex and not much else, and then again by law dictate that as long as one continues to pay the premium on ANY health insurance policy they will always retain a status of an INSURABLE INDIVIDUAL.
That is, no company will be able to consider their pre-existing conditions when offering them a policy for, say, a 38-year-old male. They will have to price all policies of a certain deductible, copay and coverage at the same rate for all 36-40 year old males who apply provided those applicants hold the status of an “Insurable Individual”.
At the onset of the law, every person would be an “insurable individual” and would have a grace period of, say, 90 days to get insurance with any insurer doing business in the state, region or country (depending on the scope of the law.)
Here’s the next key part: Anyone who failed to pay their insurance company during the grace period, or who later let payments lapse, would LOSE their status as an “insurable individual” and would be subject to being denied coverage for a pre-existing condition or to having to purchase an additional rider paying extra to do so.
Here’s the next key: If ever an insurance company decided that a person’s pre-existing condition no longer warranted denial of coverage for the condition, and the person paid for a policy from them, that person would then again become a fully “insurable individual” once again and no other insurance company could treat them otherwise if they later went insurance shopping.
And finally the last key point: The status of “insurable individual” would become the personal goal of most responsible people. Those who are irresponsible would either suffer the consequences or would have more responsible people looking out for their interests. Those without the means to pay could look to the government to PAY THE PREMIUMS on a bare-bones policy so that they would retain their status as an “insurable individual” until they eventually become able to pay their own way.
Summing up: Giant pools combined with the concept of an “Insurable Individual” would create the backbone of a system on which government could look out for the less fortunate among us by simply covering the premiums on a cheap policy. People would be able to take the risk of going uninsured if they wanted, but most would see the wisdom of at least buying a very bare-bones policy in order to retain their status as an “Insurable Individual”
Grandparents and parents would even start savings account for the kids and grand kids to ensure that they got off to a good start when the entered the insurance market at the age of, say, 21. Kids would enter with the status “Insurable Individual” and would only lose it if they screwed up and didn’t pay premiums. Schools and parents would be drumming into their kids’ heads from age 16 on the importance of retaining that status, and most probably would. Government could then focus on those who just couldn’t. Medicare and Medicaid could be done away with.
Most people would pick HSA plans with high deductibles and copays, the insurance companies would once again be insuring primarily against catastrophic losses, doctors would start quoting single prices for procedures instead of listing every band-aid and cough drop on the charges, and health care costs would plummet due to consumer shopping for services using their own money. Nirvana. America. Wow!
Instead we get Obamacare....sigh