The way I see it, the health insurance problem is the result of different people having different ideas on the "right" amount of health care and insurance to provide. Example... if somebody has a potentially fatal disease and $25000 worth of treatment can solve the problem, then go ahead and do it. But I don't want to pay to have some hypochondriac go to the doctor every time they get a sniffle. Other people believe all medical care should be free. Some people oppose measures to prolong life, some oppose pulling the plug. I haven't even started to touch the controversial stuff in the news recently.
In order to fix health insurance availability, these decisions have to be made, because ultimately any "solution" will require government subsidizing somebody, whether its the person buying insurance or the insurance company or by providing the insurance directly.
Agreed, mostly. We don't use car insurance the same way as health insurance, demanding $5 "co pays" for oil changes and tire rebalancing - you just pay for the services you need. For 'catastrophic' car stuff - body work after accidents, etc - yes, you have auto insurance to help cover those major expenses. Since we've had so many layers between medical users and providers over the decades, there's very little in the way of 'market forces' at work.
My own health (and that of my wife) isn't perfect, but it's reasonably good enough that we can afford our own private health policy, but only reasonably as a high-deductible variant of $5k or so. And... while it's not great to have to deal with large bills now and then, it's still doable.
We had $3300 in premiums last year, and $4300 in out of pocket expenses (roughly). That's $7600 - divided by 12 is $633/month. But we only had $3300 in premiums the year before - $280/month. That's the nature of insurance - we take some risk. Not everyone can do it, of course, but I have friends who are chained to jobs partially (mostly) because of employer-provided healthcare. For a family of 5, high-deductible insurance may be something like $600/month, with a potential extra $5k+ out of pocket, but that's a risk. Instead, they're usually paying more than that in premiums (either they are or the employer is sharing it), so that money's getting definitely being spent either way, instead of only potentially being spent.
What might be interesting is to get employers to start offering high-deductible plans, but putting x% extra in to a pool, then sharing a portion of that as a bonus each year to employees who don't use it, but it's there to help if employees need to access it - perhaps something like 50% of your out of pocket deductible could be paid by the company.
But... that's just really confusing over time, imo. Just make it easier for people to buy insurance in the open market - get away from employer-sponsored health insurance. We've moved away from employer-provided retirement packages - make the same move on health insurance.
What I've seen (and really like) is doing a great High Deductible Health Plan (i.e. HSA-eligible) -- something where you get top quality coverage for extreme things, and get access to the best doctors, and negotiated prices for everything from the first dollar each year, but are on the hook for the first $5k or so of costs.
Then, your employer gives you $5k/yr tax-free into your HSA account; if you don't use it, it's basically equivalent to a Roth IRA. It's actually better to spend cash out of pocket and then leave the full amount in the HSA, since it can be invested tax-free forever, and all gains are themselves tax-free. You can easily end up with a few hundred thousand dollars extra.
This accomplishes the useful goal of getting people to be price conscious for their medical services, but doesn't impoverish them. The one thing it might do is promote time shifting expenses (if I know I'm over the $5k limit in one year, I'll get all my other elective stuff done that year), but it's not a big deal otherwise.
IMO, the HSA thing was one of the best reforms in health care in a long time, and one of the (few) good things GWB did.
My current employer does this. Deductible is 2400/year for a family. Then they give us 200 per month into the HSA and we could contribute more. The insurance companies like this because it gets people to be more cost conscious. It is cheaper for my employer to offer the high deductible plan and give us the deductible than it is to give us a no deductible plan.
Comments
The way I see it, the health insurance problem is the result of different people having different ideas on the "right" amount of health care and insurance to provide. Example... if somebody has a potentially fatal disease and $25000 worth of treatment can solve the problem, then go ahead and do it. But I don't want to pay to have some hypochondriac go to the doctor every time they get a sniffle. Other people believe all medical care should be free. Some people oppose measures to prolong life, some oppose pulling the plug. I haven't even started to touch the controversial stuff in the news recently. In order to fix health insurance availability, these decisions have to be made, because ultimately any "solution" will require government subsidizing somebody, whether its the person buying insurance or the insurance company or by providing the insurance directly.
Agreed, mostly. We don't use car insurance the same way as health insurance, demanding $5 "co pays" for oil changes and tire rebalancing - you just pay for the services you need. For 'catastrophic' car stuff - body work after accidents, etc - yes, you have auto insurance to help cover those major expenses. Since we've had so many layers between medical users and providers over the decades, there's very little in the way of 'market forces' at work.
My own health (and that of my wife) isn't perfect, but it's reasonably good enough that we can afford our own private health policy, but only reasonably as a high-deductible variant of $5k or so. And... while it's not great to have to deal with large bills now and then, it's still doable.
We had $3300 in premiums last year, and $4300 in out of pocket expenses (roughly). That's $7600 - divided by 12 is $633/month. But we only had $3300 in premiums the year before - $280/month. That's the nature of insurance - we take some risk. Not everyone can do it, of course, but I have friends who are chained to jobs partially (mostly) because of employer-provided healthcare. For a family of 5, high-deductible insurance may be something like $600/month, with a potential extra $5k+ out of pocket, but that's a risk. Instead, they're usually paying more than that in premiums (either they are or the employer is sharing it), so that money's getting definitely being spent either way, instead of only potentially being spent.
What might be interesting is to get employers to start offering high-deductible plans, but putting x% extra in to a pool, then sharing a portion of that as a bonus each year to employees who don't use it, but it's there to help if employees need to access it - perhaps something like 50% of your out of pocket deductible could be paid by the company.
But... that's just really confusing over time, imo. Just make it easier for people to buy insurance in the open market - get away from employer-sponsored health insurance. We've moved away from employer-provided retirement packages - make the same move on health insurance.
What I've seen (and really like) is doing a great High Deductible Health Plan (i.e. HSA-eligible) -- something where you get top quality coverage for extreme things, and get access to the best doctors, and negotiated prices for everything from the first dollar each year, but are on the hook for the first $5k or so of costs.
Then, your employer gives you $5k/yr tax-free into your HSA account; if you don't use it, it's basically equivalent to a Roth IRA. It's actually better to spend cash out of pocket and then leave the full amount in the HSA, since it can be invested tax-free forever, and all gains are themselves tax-free. You can easily end up with a few hundred thousand dollars extra.
This accomplishes the useful goal of getting people to be price conscious for their medical services, but doesn't impoverish them. The one thing it might do is promote time shifting expenses (if I know I'm over the $5k limit in one year, I'll get all my other elective stuff done that year), but it's not a big deal otherwise.
IMO, the HSA thing was one of the best reforms in health care in a long time, and one of the (few) good things GWB did.
My current employer does this. Deductible is 2400/year for a family. Then they give us 200 per month into the HSA and we could contribute more. The insurance companies like this because it gets people to be more cost conscious. It is cheaper for my employer to offer the high deductible plan and give us the deductible than it is to give us a no deductible plan.