As I’ve thought about it lately, there is another equivalent way to put the idea that may make it more attractive or understandable. Current individual (GR/IC if you want to be techical) insurance combines two things: medical insurance for one year, and the right to buy medical insurance in the future at a preset rate. My idea comes down to separating those two functions, and then having insurance companies occasionally post collateral on the second. As some commenters have noted there is no extra cost relative to individual insurance, we’re just separating these two things that come bundled in an individual insurance policy.

Separating the right to buy from the actual insurance is useful in a lot of ways. For example, someone who bought individual insurance and then got a job where an employer provides it could still keep the right to future insurance alive while he or she gets current insurance from an employer. Similarly, if you’re already in an employer plan, you could just buy the right part, knowing you’ll be covered later. People in current financial difficulty could by rights to more expensive coverage in the future, while suffering through a bare bones plan now.

The “health status account” can be thought of as collateral. The company selling you the right to future insurance has a long term debt. Why not make them post some collateral on that long term debt so that if they go out of business or otherwise stop performing, you have the resources to go elswhere.

I hope this helps, thanks for the comments

John Cochrane

The underwriting market for sick people might be very thin if the only players are insurers. But why only consider insurers (and here I may well be departing from the thinking of Cochrane, Pauly, and Herring)? Why not let doctors and groups of doctors bid for the opportunity to take care of chronic patients? There might be one fixed price, say, for the next 12 months or a fixed plus variable (payments from an HSA) price. What I am envisioning is literally a market for the care of sick people in which all manner of entrepreneurs can profit by figuring out how to provide high quality care for a lower price.

Basically, yours is an idea for government reinsurance and it is a completely separate idea. It could be combined with Cochran’s proposal or not combined. Personally, I don’t see any reason to have government involved here – unless there is a plague or a terrorist bombing that overwhelms the system.

John

Under the banner “There is nothing new under the sun” comes Dattilo (and by extension, Racer) with a 90-10 or 80-20 idea. And the reason I send this to you is I bet in you billions of brain cells, a few recall similar ideas from the past.

Simple enough idea. I don’t think the numbers work. But the goal is get coverage for sick people. They need the insurance. Not healthy people (who only need insurance if they get sick – but you already know that).

Everybody pays the same premium. At the end of the year, each carrier tallies it up. Makes two piles. The cost of care for the 90%, and the cost of care for the 10% highest. The amount that exceeds the cost of providing care for the 90% is billed to a pool, and the insurance company gets reimbursed. The pool is paid for by a “sick tax” just as Minnesota does now (Health Care Access Fund).

Insurance remains affordable because everyone pays the same.

I am hedging on this, because Greg really likes the idea. But I worry that the cost of that top 10 is so high that it renders the idea impossible.

You may recall Don Larson writing a book circa 1994 on a 90-10 idea, in which everyone would pay up to 10% of their annual household income for health care after which the feds would pay the rest of the bill. He was a big fan of yours, by the way. Don died probably 10 years ago now.

1. Government single payer.

2. Administration of plan to be contracted out by private insurers at a negotiated fee.

3. Universal coverage – hearing aids, glasses, alternative and holistic medicine, preventive medicine, prescription drugs, vitamins, supplements, etc.

4. Abolish FDA and set up a government run laboratory to test conventional and unconventional medical products and procedures for safety and efficiency.

5. Government to insure all doctors against malpractice. However, any doctor who losses his case in court more than once in any 10-year period would have his license revoked or not permitted to participate in the plan.

6. Break the monopoly of the medical profession by allowing competing methodologies and medicines to be available to the public.

7. Prohibit selling of body parts.

8. No patents on biological organisms.

9. All patents on new medical technology to remain in public domain with fair royalties paid by government for valid patents for a reasonable period of time.

10. Plan paid through Medicare tax increase by employer/employee with no prior limit on earnings plus a ½% health tax on all financial transactions.

11. Copayments required to control usage based on sliding scale keyed to gross adjusted income.

12. Vitamins and supplements approved by government health laboratory as to purity, safety and efficacy.

13. Set up a National Health Academy to test new approaches to health in all categories and train public service doctors for manning U.S. public hospitals.

14. Set up standards for healthy food, nutrition and exercise easily understood by the public. Clean up contaminated food supply by truth in labeling. Upgrade municipal water supplies

15. Provide a tax rebate incentive to all persons remaining healthy and using Medicare below a set minimum.

16. Fees paid to doctors to be negotiated with government every two years to account for inflation and latest technology.

17. Free medical scholarship to worthy, qualified students who agree to serve for five years in public health services and/or rural areas devoid of adequate medical personnel and facilities.

18. No public advertising of medicines or procedures on TV and radio.

19. Have states bid on pilot projects funded by the Federal government to come up with the most innovative health care delivery systems.

20. All hospitals and nursing homes have to be operated by private, not-for-profit entities on the same basis as public health hospitals.