Universal or affordable? Can we have it all? (yes..)

In order to fix healthcare we have to first understand the problem. There is no health insurance in the U.S., only health clubs. Families pay thousands of dollars every year whether they use healthcare services or not just so that if they do require services they would not have to pay out of pocket. These health clubs have high premiums, deductibles and often cover only up to ceiling of “benefits”.

Free market proponents are correct that this situation disconnects consumers from providers, prevents competition and leads to astronomic prices and waste as a direct result. Any solution that aims to fix healthcare costs by reducing prices and waste must include competition through out-of-pocket payment by consumers.

A sensible alternative for health clubs is real health insurance also called catastrophe insurance. Such insurance guarantees that a family will not be responsible for more than say $5,000 per year. As a result, the premiums are much lower and the first $5,000 are paid out of pocket competitively.

Universal coverage raises the question of “the right to health care”. On the other hand, universal catastrophe insurance lowers the bar by providing “the right not to be financially destroyed by health care”.

Single payer is often conflated with single provider or government healthcare club like in the U.K and Canada. Such systems suffer from black markets and turn into low quality, long wait systems. However, a governmental catastrophe insurance does not require a single provider at all. It only requires the IRS to pay premiums for all.

A universal single payer catastrophe insurance will lead to competition, affordability, and accessibility. Best of all, it can be done on top of the existing system without essentially repealing or replacing anything.