One Step Towards a National Health Plan – An Open Letter to the Obama Administration

Preamble

Fact: Most bankruptcies are due to medical expenses.

Fact: Many working people are forced to stay in jobs they dislike, but can’t leave for fear of losing health insurance for themselves or for their families.

A severe illness or injury is a threat to a person’s life, and of course, their happiness.

In addition, for anyone with any assets at all, being uninsured carries the risk of losing the fruits of a lifetime of labor, all with one illness: their savings, their homes, their retirement accounts, etc.

PROPOSAL

The Federal government (taxpayers) could afford TODAY: a $10,000.00-deductible insurance plan for every citizen. (i.e.: Insurance for costs OVER the “deductible” amount. Actuaries will have to make decision on how big the deductible needs to be, to be affordable.)

Outlay over that amount would be for relatively few patients, with an occasional million dollar “catastrophic” illness. There would be minimal administrative cost to the government/insurer overall, since most people would never have to submit a bill, unless they go over $10,000.00. (Patients may still need to keep records for tax purposes.)

All costs below $10,000.00could be dealt with in a number of ways – mostly variations of existing structures. Private insurers would still be available for insurance coverage up to the “deductible”.

Insurers would now have to deal fairly with potential customers, since they could no longer say: “We HAVE to charge you $500 or $1,000 a month, because we could be hit with a multi-million dollar medical bill if you get in a car wreck, have a coronary bypass operation, etc.” They would have to quote reasonable premiums, and patients would have more power to risk “going bare” (going without insurance), because choosing to have no insurance under this proposed plan would cost you a maximum of $10,000.00 in a given year. The cost of “going bare,” in the system we now have, can be total financial ruin. Many people are chained to jobs they don’t like, because they need the health insurance. This probably affects the middle class the most, as they have assets they could lose. (The very rich can risk a million dollars. The very poor have fewer assets to lose, and would continue to be insured under Medi-Cal or Medicaid-like programs).

Conclusion

Most Americans get their health insurance through their employment.

In hard economic times, many more people become unemployed, and as a result, uninsured.

In addition, many working Americans are tied to jobs they dislike, out of fear of losing health insurance.

The high cost of health insurance for the worker is reflected in what employers can afford to pay an employee.

Under my proposal, several options are available to employer and employee:

Either the employer or the employee (probably a combination) can cover for the costs up to $10,000.00.

NOTE: My proposal is NOT “insurance,” as we know it, but a workable first step, that could be implemented immediately, which would take a tremendous burden off most Americans: the possibility that a catastrophic illness could financially devastate an individual and his/her family.

I have read the Obama/Biden plan for health care reform.

These are good basic steps at making the present system more affordable, and gives several individual options that can help.

And nothing in it conflicts with my plan or my “addendum to whatever plan”.

I think what’s revolutionary about my addendum to whatever plan is finally chosen, is that it makes all the options more palatable.

Even “going bare” will become less risky for patients as well as employers.

Employers could then give a medical savings plan to employees and accept part or all of the risk, if they were assured that it would never be more than $5500-7500.

And the ENORMOUS immediate savings on billing/administration for anyone opting to pay their own way up to the deductible.

Background

A friend of mine with dozens of employees, pays hundreds of dollars each month per employee for health insurance.

Most PPO insurance plans have monthly premium rates, which become less expensive with higher “deductibles”.

He had the idea that he could save money by choosing the higher deductible, and providing his employees with a health savings account that would cover the costs up the deductible, and thus save money. It turns out that going above a deductible of $5,000.00 saves you almost nothing.

According to “National Health Expenditures, Forecast summary and selected tables”, Office of the Actuary in the Centers for Medicare & Medicaid Services, 2008, the U.S. spent $2.26 trillion on health care, or $7,439 per person, in 2007, It had spent $2.1 trillion, or $7,026 per capita, in 2006.

Therefore, I chose $10,000 as the deductible that the United Stated government could give all citizens immediately, and allow individuals and/or employers to decide what financial risks they can take in self-insuring up the $10,000.00

Definitions

Deductible: The amount that the policy-holder must pay out-of-pocket before the health plan pays its share. For example, a policy-holder might have to pay a $500 deductible per year, before any of their health care is covered by the health plan. It may take several doctor’s visits or prescription refills before the policy-holder reaches the deductible and the health plan starts to pay for care.


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Showing 2 comments
  • ChefNick

    Frank,

    You were my doctor from around 1981-88 and then you were my parents’ doctor. You were easily the BEST DOCTOR I’VE EVER HAD. You performed minor surgery in that delightful OR that was in that delightful house and you always reassured my fears when I came to you with some unexplained whatever.

    If you remember, in this period Betsy Reid was your assistant, and maybe Mary was the receptionist? It made “Going To The Doctor” a real pleasure.

    It’s very good to see that you’re still around and I wish you very well from here in Montreal. It would be great to come to your office and . . . well, I don’t smoke any more, but a beer would be great.

    Over the years you really were the best doctor I’ve ever had and I swear, at the age of 51, I STILL want to come see you.

    Take care

    Nick

    (Nicholas Robinson) nick@montrealfood.com

  • Jessica

    Kudos Frank! A great idea whose time is NOW!

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