Here’s the wolfe plan. I make no pretence that it’s the best plan in the universe, and I’m sure it has flaws and holes. But that said, here goes:
- universal coverage for all citizens.
- tax-free medical savings accounts (MSA’s) available for all citizens, including non-resident ones. (funds put into MSA’s deducted directly from taxable income. Must be invested in certain pre-approved ways, may not withdraw for non-medical reasons except in the event of death. In the event of death, a positive balance may be inherited by whomever you wish, tax free).
- all citizens are required to deposit a certain amount, varying with age, into their MSA’s and those of their dependents each year. Failure to do so results in very substantial tax liability. Citizens who cannot afford to do so, see below.
- all citizens are required to purchase special catastrophic insurance coverage. Failure to do so results in substantial tax liability. As the name implies, this covers catastrophes which would wipe out a normally funded MSA, and, seemingly bizarrely, one free check-up every two years.
- Medicaid will transition to a government-funded MSA’s program. While qualifying for medicaid, the government will deposit funds into your MSA and cover catastrophic insurance. This encourages those on medicaid to be prudent with what is suddenly a resource that has apparent costs to them.
- Citizens may form whatever combines they wish to purchase medical services (via MSA’s or cash), including across state lines. Non-profit co-op combines will get an anti-trust exemption. (I’m not sure about for profit combines).
- Insurance companies may sell across state lines provided they meet the requirements of the states they are selling in.
- Citizens who wish to may use the entire amount of their MSA’s annual deposit to purchase conventional medical insurance if they so wish, but it’s my bet that this will fade over time as a desired option.
- Insurance companies can no longer deny coverage on the basis of pre-existing conditions.
- Massive tort reform, including effective immunity for physicians employing “best current practices”.
- All the magical savings we will supposedly get out of reform that both parties are touting, sure, but I’m not counting on much there.
That’s a whole bunch of detail. I’m sure I’ve lost all but the wonkiest. The basic concept is to bring the consumer of medical services much closer to the provider, to make the decision-maker the patient (to the greatest degree possible), and to reduce incentive for needless use of medical services, including in the case of medicaid recipients.
Why do I make it effectively mandatory? It’s the pre-existing condition removal. If people can get insurance regardless of their health, then anyone healthy won’t buy insurance.
Why universality? Because I think it’s the right thing to do. Period. Yep, Glenn Beck would hate me, and denounce me as a communist, ditto for the taxes I’d impose on those who don’t comply. A pre-New Deal Supreme Court might well vote down my plan as unconstitutional. I’m sure Clarence Thomas would.
Why mandate the inclusion of a “free” checkup periodically? Because logic suggests that if this is left to people to fund solely from their MSA’s many might just avoid it. There is a genuine public good in having people get regular checkups.
Why do I outline this? Basically, I want to show what effect my proposal will have on one segment, the insurance companies.
Insurance companies gain:
- About 10% more customers
- Ability to sell across state lines.
Insurance companies lose:
- At a guess, at least 50% of their revenue. Perhaps more like 75%.
- pre-existing condition exemption.
- Possibly their anti-trust exemption. I don’t know for sure.
So you can see I’m no great fan of the insurance companies, nor does my plan involve masses of wealth for them. Indeed it involves a big drop in their revenues and significant downsizing of their bureaucracies. Ironically, though, a well-run insurance company might become somewhat more profitable under my plan. If nothing else, catastrophic coverage tends to be higher margin events.
I readily admit my plan is technocratic, free-market-oriented and that first is definitely not a great thing. Contribution amounts would have to be set by a board at arm’s length from any government (and any insurance company!).
Would my plan work? I think so. But it’d be easy enough to test. Try it out in 1-5 states. See how it flies. We should, of course, do the same with whatever mess the Democrats eventually cobble together: try it out in a few states. See what happens. Don’t plunge the entire country into the disaster that is currently taking shape on the Hill.