Healthcare in America shouldn’t be this complicated
In America today we have an incredible complexity of health care options and these choices conspire to provide an avenue for massive abuse and costs.
In most states they regulate in many cases the rates that may be charged for medical procedures and they in many cases regulate the insurance rates as well. The intention is to prevent overcharges but it results in complexity and lack of transparency that is insane and illogical.
I get a blood test at a hospital that costs $500 that I know costs them less than $5. Due to the complexities of insurance, regulation the hospital charges this much to compensate for other things they can’t charge a fair value for. Everybody is gaming the system so it is like funny money. I don’t pay the $500 anyway because my insurance company covers it so there is no incentive for me to shop.
This is all a game that the regulators and insurance and providers are playing to outwit each other and find some way to make a little money here or there and we as consumers really are mystified. All we know is that if we had to pay $28,000 for the broken ankle that is charged we would go broke quickly.
Today there are literally thousands of insurance companies if you include all the different states, municipalities, federal agencies, legislatures, corporate plans, individual plans by state. Together there may be tens of hundreds of thousands of choices of which you qualify for only a few most likely at any time.
The plans of each of these tens of thousands of choices are 200 page documents describing in incredible detail what will be paid and what won’t be paid. How much will be paid at what times. What the limits are etc. In addition, to add complexity is the providers who will take this plan or that plan. Nobody can understand all this.
I propose what I think are simple logical reforms that no matter what party you might believe in makes sense to move forward.
All plans are regulated to provide a limited number of options.
Instead of a 200 page document that lists all things this would be reduced to 2 pages of choices. A plan would be able to say: We cover chiropractic or not. Maybe there could be a couple levels. We cover therapy or not. We cover this disease or not. If they cover it then there would be a set of rules regulated which says what that means and every insurer would have to abide by those rules. It would say we have co-pay of this or that and coinsurance deductibles etc. I believe you could easily specify all the legitimate options that people would want in 1 or 2 pages. There would be one 200 page document which described what these choices meant but this would represent a gross simplification.
Who provides the services — Let’s simplify
One of the most difficult things about the current plans I have discovered is managing who takes what plans. This could be simplified. Providers could simply designate a letter code to represent the compensations they would accept. For instance, some providers might say they only accept plans that will pay A level compensation or B level compensation etc… They would accept any insurance which provided that level of compensation.
This radically simplifies looking up if your doctor X will work in Plan A but doctor Y won’t. This makes it easy for the plans to say we pay anybody who accepts A.
This could also be a way to handle HMO’s. HMO’s could say they accept compensation plan Z. Only their insurance programs would pay plan Z levels. So, if you want to see those doctors you need to find plans which pay Z and that is only plans of the HMO. We need to limit the number of these compensation plans to keep the system simple. In order for providers to get enough customers they would be incentivized to accept levels of compensation according to plans that are well covered by some insurers otherwise they won’t have any customers.
I have previously argued everyone has to have insurance — not a choice sorry
Everyone as a resident of the US has to pay for insurance one way or another. This is simply not an argument. My post here explains why and how that has to be.
Everyone should be selecting from the same plans, no special government corporate or other plans
The different government levels and agencies, different companies, different states all have different plans. This is absurd. Everyone should have access to all the plans. There is no legitimate argument that insurance is any different than getting groceries. Anybody can go into any grocery store and buy their groceries. Excluding who can buy the policies is wrong. If my legislature has a plan that is really excellent I should be able to buy into it.
This means the end of all these “hidden” insurance things. The price of all insurance would be transparent and if any agency wants to offer a plan it must be a plan open to all and has a 2 page description like any other plan. If they want to subsidize their employees in buying their plan terrific but their employees should be able to select any plan they like. The plan should go with the person not the company. People could keep plans across employees and keep them for life. There should be no COBRA or reason you have to terminate a plan other than you want to switch yourself.
Instead of consumers having enrollment periods it would be Providers and Insurance Companies
In my idea providers and employers and insurance companies could only change the plans once a year and only with significant advance warning. Therefore as a consumer you could buy a plan or terminate it at any time. It is the providers or others who would have to decide annually what level of compensation they will take, what areas they will cover, what they will change in their plans.
HSA plans would be preferred
Insurance doesn’t make health costs cheaper. There is no free lunch. Insurance is simply a way to space out costs over time. HSA plans give choice to consumers and a way to save for future emergencies. I really believe this is the way most people should go. It will encourage transparency in medical costs like the other aspects of this plan.
OVERALL BENEFITS
The overall benefits of my restructuring is that it incentivizes cost savings, transparency, the advantages of the market and responsibility. It removes inefficiencies like pre-existing conditions and the myriads of options that serve no useful purpose other than to confuse consumers and provide different ways to scam this or that. It gives consumers more ability to understand what they are buying and what they are entitled to receive and it allows people to keep insurance companies for life without fear of interruption or changing service levels they don’t understand.
