Last night, President Obama, you asked for a better approach:
“If anyone has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know. Let me know. Let me know.”
I’m glad you want to know, and I’m happy to help.
You definitely need a better approach. The recent proposals in Congress, including guaranteed issue plans and strict limits on how much rates can vary based on age, sex, and smoking status, would do the exact opposite. Rates would go up on almost everyone, and would at least double on young people. And there are of course many other concerns about this much government involvement in health care. There is definitely a better approach you can take.
The most important thing to do is to get the consumer more involved. With our current system, doctors and hospitals don’t even post prices, and in fact its hard to get a price even when you ask. High deductible plans that work with health savings accounts (HSAs) have already been set up by millions of Americans. These plans provide a tax incentive for people to save money to pay their own medical expenses, and it gets them more involved in shopping for the best value. This places competitive other health care providers to lower their prices, and increase quality and convenience.
The next step is to let insurance companies offer whatever type of coverage they wish to offer, and let consumers purchase whatever they want to purchase. This is a voluntary transaction between two parties, and there is no need for the government to interfere with it. Get rid of government mandates forcing insurance companies to pay for certain things.
It is true that in some states there is not enough competition among health insurance companies. Remove restrictions on competition by letting any American buy health insurance from any insurance company, even if the plan is based in another state. This will open the market wide open, and increased competition means lower prices.
Structure things so people purchase and own their own health insurance, and get rid of the perverse tax incentives that cause most people to have health insurance that is connected to their employment. That way people don’t lose their coverage when they change jobs. This will also increase competition as individual consumers make the choices that will give them the best value.
Make it possible for good physicians to practice good medicine without worrying about multimillion dollar lawsuits. Not only does this directly increase the cost of medical care, but it causes doctors to order unneeded tests to protect themselves, further increasing medical costs.
Start there. Prices will plummet. Then help out those who cannot afford health insurance with vouchers that will enable them to shop among the plans and find the best value for their needs.
Let people protect their insurability, and help the uninsurable. We are a wealthy and compassionate nation, and we can afford to take care of those who cannot take care of themselves. But first encourage personal responsibility, not dependency. Encourage people to save for the future, to shop for the best value, and to take care of their own health so the money in their HSAs grow.
Do this, and you will not only get wide support, but you will radically improve the way health care works in this country. If you would like to discuss these ideas further, just give me a call, I’d love to talk.