Health care

Because of the Supreme Court hearings on Obamacare, health insurance is once again in the news. In the past I have stated that the number one reason why health cost increase at double the inflation rate is because of the concept of, “third party payer”. My solution was to have companies offer high deductible plans and set up tax deferred savings plans for each employee. The company would put money into an insurance savings account and the employee would pay for health care out of that account. Anything left over at retirement would belong to the employee to use as he pleases. While that is a laudable plan it is not politically feasible since it means the downsizing of the insurance companies. The federal government sponsors a major medical plan for all citizens. Major medical means that the government will pay all cost over $5,000 per year per family and each family is responsible for cost up to that amount. Next the government will put $5,000 in a tax deferred health savings account for each employee. The employees will pay a monthly premium based on their income. People at or below the poverty level will pay no premium. Poverty level for a family of four is $23,000 per year. Those at twice the poverty level will pay $200 per month, those at three times the poverty level will pay $400 per month, those at four times the level will pay $600 per month and everyone else will pay $800 per month. These payments will cover 80% of the governments $5,000 per year investment in savings accounts. The other $1000 per year per family (140 billion) will come from savings within the program. Where will this savings come from? Currently we spend 2,700 billion dollars per year on health care cost and 27% of this (729 billion) on administration or paper work. When you have a $5,000 annual family deductible you eliminate 90% of all claims which saves 656 billion in paper work. Notice that this savings far exceeds the 140 billion costs to fund the savings accounts. The government hires someone like Blue Cross to handle the remaining 10% of claims. Since each person is now paying out of pocket for the first $5,000 per year they begin to shop for health services. Instead of making a joke about paying four dollars for an aspirin on their hospital bill they are out raged. When a child needs a tonsillectomy the parent shops around for the best deal. In other words people begin to purchase health care with the same scrutiny that they buy other items. This means that health care cost will increase like other items at about the inflation rate. Does the doctor like the new plan where you pay for services rendered when received like you do other purchases. Does he like the fact that he no longer as to have one or two full time employees to file insurance claims and then he gets paid three months later. Do clinics like eliminating whole departments of people who do nothing but file claims? Do hospitals like not having to absorb the cost of those who do not have insurance? Do hospitals like getting an on time check from one source and not having to fight with patients who are late with payments? What is the down side to the plan? It eliminates about 12 million jobs. The people who were handling the claims but many of these are computer savvy and have at least high school educations which will help them find new careers. The major improvements and costs savings come from the elimination of the “third party payer”.