Well, they went and did it-passed "Health Care Reform." This new law will increase costs and does absolutely nothing to improve health. What should have been done? Here is my proposal:
Using basic economic principles (supply and demand)and understanding that health insurance was never intended to pay for routine care; the following makes sense.
Every person in the U.S. is issued a Health Savings Card (HSC) with a $5000 value. People would contribute pre-tax dollars into their accounts. Lower income people would get govt. grants to fill their accounts (in lieu of tax credits)based on a sliding scale on ability to contribute. This money would be used for routine care and can be used for any health related expense. Any money not used by the end of the year would be transferred to a retirement savings account (interest bearing).
Health insurance would only be for catastrophic illness/injury and would have a $5000 deductible (covered by your HSC). Once you have used up your HSC, the insurance would kick in.
This simple plan reduces costs in several ways. People have control of their health care spending and an incentive to spend wisely. Since they are basically paying with cash, administrative costs for providers will go down. Getting paid at the time of service versus submitting a claim and hoping it gets paid is a no-brainer for doctors. They can lower their costs to the consumer.
By allowing all licensed health care providers to be paid by the HSC, you now have increased the number of providers (increased supply) which also increases competition for your health care dollars. More competition means lower cost.
Other side benefits of this plan include; supplementing retirement (Social Security), reduced health care student loan defaults, and better health education. Since people will have control over their own spending, they will become more educated on staying healthy (prevention) and not waste their own dollars on unnecessary or ineffective treatments.
If you have questions or want more details, leave a comment below.
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2 comments:
This would be a great idea, only the suits in Washington think they know how better to spend our money then the ordinary citizen. As Obama's slogan "Yes We Can" spend your money, burden your children and grandchildren, screw the middle class, ect. That is what he ran on and is doing. Instead of overhauling healthcare, they should overahul Washington, and "Yes We Can" by our vote.
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