What if we did this....

An intriguing notion to totally ignore current systems and postulate on how something else might work to solve a problem.  I had one of those moments this morning at breakfast regarding our healthcare system.  Everyone would continue to pay into the present Medicare system, and become eligible for it at the age they qualify for Social Security Old Age benefits.

But for everyone who is between the age of 18 and the age of qualifying for Medicare would become part of a new plan, if they choose.  The choice however, is a bit draconian.  Anyone who wants to opt out can do so, but once they make that choice, they have to live with it for five full years.  If they get injured or become catastrophically ill during that period, they will remain on a cash-only basis for treatment of that injury or illness.  They would be taking a big risk.

Then we take all of the money currently going into the Medicaid system to partially fund the system we are going to create.  There are three sources of funding for this system.  That's one of them.  The second is a "tax" on all employers.  $100 per month per employee, pro-rated by the percentage of 40 hours per week that the employee works.  The third source of funding is from the people.  Pro-rated based on means.  Anyone living below the poverty-line pays nothing.  Anyone earning between 100% and 200% of the poverty line pays a very small amount.  Above that, premiums paid by people are pro-rated based on earnings up to $200,000.  Those earning more than $200,000 but less than $1 million would pay 200% of the premium to subsidize the premiums of those living below 200% of the poverty line.  Those earning more than $1 million and less than $10 million would pay 300%.  Above $10 million would pay 400%.

Premiums for those under 18 would be absorbed by the government.

With nearly everyone enrolled in the program, risk would be pooled among a very large pool indeed.  Risk-pooling lowers costs.

Every insurance company will be required to offer the plan that includes the government specified benefits available under this plan.  This plan would be an HMO-like plan.  It's the only way to make it affordable. Premiums would be set by the government for this plan. 

However, insurers would be free to offer other plans with better benefits at whatever price they feel fair.  Employers who want to provide better benefits than this basic plan and pay for them would be free to do so.  Individuals who want to purchase better coverage would be free to do so.  So if someone wants a PPO plan rather than the basic HMO plan, they can have one.  And pay for it.

Just a wild idea I came up with at breakfast.