Health Care Reform...On the Back of a Napkin

Image by SavaTheAggie via Flickr

OK gang, I hope this doesn't sound like a rant but, I'd like to share with you a 6-step program that could fix health care.  I've thought about it a lot and here's what I came up with:

• No pre-existing conditions.  Granted, this would drive up costs but bear with me until the end of this post.  I'll address that later.  Here are a couple examples from my experience as an agent:

I had a client who got hit in the nose during a basketball game and had to go to the ER because his nose wouldn't stop bleeding.  When I submitted an application for health insurance, they put a rider on his entire upper respiratory system.  Really?  He was healthy except for getting hit in the nose.

Another client: 44 years old...had surgery when he was 2 to correct a lazy eye.  Insurance company put a rider on all diseases of the eyes.  What if he developed glaucoma totally unrelated to the surgery when he was a baby?

• Young Invincibles: Yes.  It's the ever-contoversial heathcare mandate.  It may seem a little socialist on the surface but, I'll get to that in a minute.  There needs to be a meaningful penalty for not having health insurance.  The young invincibles (age 20-29) go without coverage until they actually need it.  Mandating that they maintain coverage would drive the cost of coverage back down.

Why is this important?  Unlike home and auto insurance where there is a mandate and a meaningful penalty, doctors and hospitals are bound by the Hippocratic Oath which basically requires them to provide treatment and save lives and worry about the money later.  The cost of the uninsured gets passed on to you and I whether we see it or not in the form of escalating health care costs.

• Get rid of group plans.  This could easily be replaced with employer subsidies for having a qualified plan.  Group plans are the problem and here's why:  Let's say you have a pre-existing condition.  You take a job that you really don't like just to have access to the benefits.  Group plans do not have any exclusions for pre-existing conditions.  Doing this would also have the side benefit of allowing smaller companies to compete with the big boys.

• No more pooling.  This is a common practice in the individual market.  Every couple years, an insurance company starts a new pool.  All the healthy people can underwrite into the new pool and the sick people are stuck in the old pool and get their premiums jacked out of sight.  But they have no choice.  They're stuck.

• Flat commisions for agents.  Now I'm an insurance agent but, I've always said that the main problem with health insurance is agents who only sell health insurance.  If the commission received is a percentage of premium, what is my incentive to sell you a $50 plan when I can sell you a $300 plan.  I think agents should receive the same commission no matter which plan they sell.  For example:  I'm a 36-year old smoker and pay $63.55/month for pretty decent coverage.  I could pay north of $300/month but why?  I'm pretty healthy.  Flat commissions would incent agents everywhere to show you all of your options.

• Wellness Incentives.  Here's where I'll deal with the socialist thing.  The thought may have crossed your mind "I take good care of myself.  I work out...maintain a healthy weight, etc.  Why should I have to pay for someone else who abuses their body on a daily basis and is a higher risk than I am?"  Here's the answer.  Insurance companies offer a "rack rate".  That is the starting price for everyone.  Then you would have incentives to maintain a healthy weight, cholesterol level, blood pressure, etc.  You would be rewarded for getting regular checkups to monitor various risk factors.

Now, while I'm really proud of my plan, keep in mind that no one part would work without the other five.  It has to happen simultaneously.  I'm not sure something so simple would ever make it through Congress.