Changing a health care system that 'is not working'
Original post made on Jan 11, 2009
Read the full story here Web Link posted Friday, January 9, 2009, 12:00 AM
on Jan 11, 2009 at 9:18 pm
50/50 Health Care - A Better Way
Universal health care using the power of the free market with protection of the government
Health care costs are out of control because of so-called middle men or health insurance companies. Not only do health insurance companies take money with the promise to pay if we are sick or injured, they often refuse to pay for sicknesses and injuries. Health insurance companies have numerous excuses for not paying while at the same time charging a small ransom to be covered under a health plan.
In fact, premium increases and refusal to reimburse health care services have driven up the cost of health care to the point that is it unaffordable for almost everyone in the United States.
In wasn't until the late '80s and early '90s, when health care insurance companies changed from nonprofit companies to publicly held (for profit) companies traded on Wall Street, that health care premiums and health care costs skyrocketed.
According to the Kaiser Family Foundation and the Health Research and Educational Trust, premiums for employer-sponsored health insurance in the United States have been rising four times faster on average than workers' wages since 2000.
One reason costs for health insurance are rising is the high salaries of health insurance executives. According to FamiliesUSA, the average annual compensation of health insurance executives is over $15 million, and that does not include unexercised stock options. According to Paywatch.org, the CEO of UnitedHealth Group, William McGuire, earned over $8 million in 2006, with an additional $1.6 billion in stock options in 2006, and he is guaranteed an annual pension of $5.1 million as well as healthcare for life. (Mcguire will pay back $468 million to settle a lawsuit regarding backdating, but that amount hardly makes a dent in the billions he received.) Wellpoint's CEO, Larry Glasscock, earned over $19 million, and Aetna 's CEO, Ronald Williams, earned over $32 million in 2006.
According to UnitedHealth Group's newsletter, revenues grew from approximately $600 million to more than $70 billion under McGuire's leadership. The stock price of UnitedHealth Group rose by almost 8500 percent, more than 30 times the growth of the S&P 500. (But, the pertinent question is how many people were denied health care in order to increase revenues, under his leadership?)
Health care experts estimate that the cost of health insurance companies (overhead and paperwork) is over $400 billion annually. If we eliminate these 'middle men' insurance companies, then this $400+ billion in overhead would be eliminated along with the billions in insurance executive salaries. These enormous savings could be passed on to the consumers.
The health insurance companies claim they need to raise their rates because of the high cost of treating the elderly, but this argument isn't logical as the elderly are already covered under Medicare! As we age, insurance companies charge us more because,
potentially, we could cost the insurance companies more money, but shouldn't we be given credit or lower premiums for all of the money/premiums we have paid to
the health insurance companies over our entire lifetime?
Health insurance companies also claim the high cost of health insurance coverage is driven by people who don't have insurance and who don't pay for their health care. But, our taxes pay for the people who can't afford insurance/health care through Medicare, Medicaid, SCHIP, the Veterans Administration, as well as state-subsidized health care rendering this argument null as well.
Furthermore, hospitals receive huge tax exemptions for treating the poor, so why do health insurance companies claim their costs are so high? The truth is that health insurance companies are raising premiums and lowering coverage when many of the uninsured costs are already covered by taxpayers.
How can we lower costs and cover everyone?
Clinton and Obama have developed health care plans that require everyone to purchase health care coverage from the same health insurance companies who have gotten us into this mess. The Clinton/Obama plans will further enrich the insurance executives without increasing our coverage or reducing costs.
Do we really need health insurance companies? Without them we could save our own money in health savings accounts and pay the doctors directly from our health care savings accounts.
America spends approximately $2 trillion on health care costs annually. If over 200 million (figure from America's Health Insurance Plans) Americans are giving health insurance companies $1,000 per month, then health insurance companies are collecting $200 billion per month. Over twelve months that amounts to $2.4 trillion dollars given to the health insurance companies!
Let's say everyone contributes approximately $1,000,000, to health insurance companies, over their lifetime through premiums, co-pays, deductibles, etc. $1,000,000 x 200,000,000 (approximate number of people with private health
insurance) = $200,000,000,000,000 or $200 trillion dollars. If we kept the insurance premium money paid to insurance companies, then each of us could have at least $1,000,000 in our health care savings accounts when we turned 65!
If insurance companies receive billions monthly, and taxpayers are picking up the costs of the uninsured, then the insurance companies should have plenty to pay for their customers' health care needs. Yet, even with an abundance of our money, these health insurance companies make it difficult for us to receive health care services. Obviously, we need a better way to manage health care.
The way to create a better health care system is to rid ourselves of the health insurance companies and to use the power of the free market to pay for our own health care. For example, instead of a monthly insurance premium going to health insurance companies, a quasi-governmental insurance organization would be created to receive half of our insurance premiums. The other 50% would be placed into individual, personal, health care savings accounts.
Employers would still pay premiums for their employees, but employees would have individual health care savings accounts for 50% of the premium and the other 50% of the premium would go to the quasi-governmental insurance organization. Employees
would use funds from their individual health care savings account when visiting a doctor or health care provider. It would be up to the consumers concerning the use of the funds in their health care savings accounts to manage their health care.
That is, health care savings accounts would be similar to bank savings accounts, with the money in the health care savings accounts available to pay only for health care needs (until age 65 when the funds would become a retirement account, too).
Doctors, hospitals, therapists, and other health care providers would have special health care card readers that consumers/patients would use to pay for services. It would be as simple as using a credit/debit card. That is, after a patient is treated by the doctor the
patient would slide their health care account card to pay the doctor. The patient would approve the charges and receive a receipt describing the charges as well as the new balance in their health care savings account. Obviously, the transactions would be secure
and would require a pin number and photo ID.
A quasi-governmental organization would manage the individual health care savings accounts as well as the quasi-governmental accounts. The health care savings accounts would pay interest too. However, if a person used up everything in their health care savings account, then his health care would be taken care of by the quasi-governmental organization through the other half or 50% of monthly premiums that the employer paid into the system.
The 50% of the premium that goes to the quasi-governmental organization would pay for the people who have depleted their health care savings account and/or to cover the indigent as well. Everyone would have health care coverage through this combination of individual savings accounts and the quasi-governmental organization. When a person reached the age of 65 or 70 and became eligible for Medicare, then the health care savings account would act as an addition to a retirement account. If a person died before reaching age 65-70, then money in the health care savings account would be passed on to heirs or beneficiaries.
Using the 50/50 health care plan, health care costs will be reduced and everyone will be covered. There will no longer be a "hidden tax/cost" caused by the overhead of health insurance companies. Furthermore, there would be no more of the many disagreements with insurance companies over services or payments. Patients and doctors would decide the treatment that is necessary and the patient would pay for the services either through their health care savings account or the quasi-governmental organization. No more billionaire insurance executives denying claims.
The 50/50 health care plan uses the power of the free market and the idea that a person is more prudent with his/her own money. Additionally, people would not skimp on routine tests to save money as regular/routine checkups would be paid through the 50%
of the premium that goes to the quasi-governmental organization. I'm betting that most people would not skimp on necessary treatments, since most people want a healthy quality of life; and after reaching the age of 65 or 70, the money in their health care savings account is theirs to enjoy and/or pass on to their heirs.
By eliminating the middle man (the health insurance companies), and by giving people the power to manage their health care through their health savings accounts we will have a more efficient and effective health care system and healthier lifestyles.
Will this system work? Yes, and already is working and having astounding results for Whole Foods Market.
Let's stop funding insurance companies that then use our money to pay for astronomical executive salaries and to lobby Congress!