This new health care bill which has passed does not help reform any of the issues regarding cost. Though I am a Libertarian idealist, I can think of ways which provide state support for those who may need financial assistance. I understand in the ideal world, all government programs ultimately hurt individuals and I associate the programs that are intended to help those in need as reason those same people are in need. The reason is the cost. Government is a terrible system of allocating resources. Here is my Libertarian fix to this health care reform I hope those running for election in November will consider and try and implement.
The ultimate goal of any government program should be to lower the amount of individuals using assistance not grow it. With that goal in mind, first we need to look at where we are in order to create a plan of where we are going.
In scouring the internet to figure out the average cost of a Medicaid recipient since this is how the most of those not covered will be covered under this healthcare reform. This report gives us a quick idea of what the average cost per Medicaid recipient is. Keep in mind most doctors are now not even accepting new Medicaid patients even with the average cost being $10,918 per year in Arizona.
Rather than spending $10,918 per person on a plan that then requires the individual to not pay any money out of pocket, we can simply issue a voucher to that individual for that amount, deposited directly into an HSA. The Health Savings Account should be able to be used to pay any medical expenses including premiums as well as deductibles and medications. So now that we are depositing this money into a savings account, let’s now look at what a non government option would look like for individuals.
Using www.ehealthinsurance.com I simply did a quick look for insurance plans for someone who I consider expensive. So I could make this very difficult I used a female who is 55 years old living in Arizona. We can find the highest deductable where we can get the most bang for the buck if you will. This would be the United Health One Plan 100 policy. The choosing the highest deductible that this person could use the voucher with this plan makes the deductible $7,500 per year and has a monthly cost of only $156 dollars.. What this means is that after $7,500 is spent, the insurance company will pay for 100% of all medical expenses beyond that amount. This plan also covers prescription drugs in it as well. It would be important, that any money saved and not spent after one year from the HSA would be allowed to be withdrawn by the individual as earned income or rolled into an IRA. This way it is their money if they do not waste it rather than use it or lose it.
Ok so here is how it will work. Individual would be given the voucher for $10,918 instead of being forced to take an expensive government plan. This private insurance plan will only cost $1,872 per year. Subtract that cost from the voucher cost and the difference; $9,046 would be deposited into the individuals HSA.
Over the course of an entire year, under the policy above the most an individual could have to pay if they are sick would be the deductable of $7,500 leaving $1,546 left over to start since this is above what 100% coverage with all co-pays and deductable covered. I just saved America $1,546 per person already.
What is better about this plan is how it would empower individuals to save. The individual will be rewarded for living a healthy lifestyle. Those who smoke, eat unhealthy foods, and do not work out, are also those who need medical care more often. This means they will use their deductable money for health care. Those who live a healthier lifestyle will be rewarded financially. Consider if a married couple is actually healthy and just need their regular checkups. They may only spend $500 dollars for the year on medical expenses total. This would actually reward them for being healthy with over $15,000 dollars in additional income for the year.
Anyone wanting a free power chair will think twice about the cost since it will come out of their HSA savings and they will receive that much left in income at the end of the year. This plan would also lower lawsuit issues with doctors since individuals will decide for themselves if they should use their savings for medical tests. Doctors and patients will make decisions together rather than insurance companies or bureaucrats. If an individual decides not to get a treatment, they own that decision; therefore they will not likely sue the doctor since they made the decision themselves. This is who should decide if a service should be rendered or not.
In the bigger picture having a voucher will freeze the growth of medical costs. Clearly in this plan there is plenty of money to be saved. Giving the poor and needy vouchers rather than a plan they do not control savings leads to over use. They will think twice before going to an ER rather than waiting until the next morning to see their doctor. This will begin to turn this massive ship around. We need to control health care costs.
As a libertarian, I can support this because I have realized the transition is more important than an all or nothing battle. This model makes it easier to scale back the amount of subsidies i.e. vouchers are given based on need. If someone makes enough money, it would be reasonable to see the voucher amount decreased accordingly. The ultimate goal of this would be to get all individuals to the point of prosperity where they do not need subsidies. Attaching the welfare checks into the subsidies like this would be far more beneficial to society by rewarding healthy behavior.
This is a scalable plan that gets a handle on costs and will help unleash the free markets for health care. This will be good for individuals.
Matt
Everyone is reading about the 28 Kansas City Schools closing. What I find amazing how John Stossel reported on this terrible school system. Everyone is sitting around in shock while Stossel nailed it.
Here is Stossel’s amazing show from 20/20 called Stupid in America? He shows the Kansas City Schools at the 8 minute mark. I think we can finally say school vouchers and privatizing all education is the only way to make sure our kids are educated.
