More than two years ago, I tossed my solution for national health insurance to a friend who is/was highly placed in Utah Governor Jon Hunstman’s administration. In case you haven’t noticed, I’m kind of busy here. In between the Highway 89 project, I am starting a campaign to bronze Ansel Adams’ tripod holes at the Snake River overlook. And I am putting together the charter membership of PhETI, Photographers for the Ethical Treatment of Images. I don’t really have time for people to drop the ball, like my friend did with my most excellent plan. It includes near-universal access to coverage, makes small businesses more competitive, and retains a market-based system of personal choice for health care.
Newsflash: we already have a national health care insurance program. In fact, we have at least four of them in the public sector. But you and I can’t participate in them, and that’s what I am proposing to change.
The federal government insures its employees in all fifty states. It also runs a separate program for serving military and their families. A third program serves veterans and their families. Every state government offers its employees insurance. Between these four programs, with their large pools of participants, we have a pretty good idea of what decent medical insurance costs when the buyer has bargaining power.
Here’s the key idea: once I am insured under an employer-based program, I have the right to extend my coverage for 18 months after I leave my job, at my own expense, at no more than 102.5% of what my previous coverage cost per month. It’s the law, it’s called COBRA, and it applies to (almost) all employer-based medical insurance plans. The 2.5% overhead seems a reasonable fee for the separate billing program to deal with individual beneficiaries, and I imagine that the insurance lobbying talent negotiated that number pretty hard.
So why can’t my business buy into the federal or state insurance pool at a 2.5% premium over the government rate? Or 5%. Pick some reasonable administrative cost, and let the private sector benefit from the government’s purchasing power. My employees get the same benefits negotiated for the rest of the program, and I as employer can take it or leave it at a guaranteed price. It’s a simple idea, really.
No one is forced to buy any program, my idea simply offers access and more choices. It also sets a ceiling on the price: what you as a taxpayer are already paying for your government employees is what everyone pays. It creates an environment for real competition among insurance providers. Everyone knows what the government programs will cost, so insurance companies have to compete on price and service. Don’t like the state employee offerings? Buy the federal program or a private policy. Organize your trade society to form a private insurance cooperative. But at least we have eliminated the concept of uninsurability by guaranteeing employer-purchased access to the public employee programs.
Insurance companies have been playing the high premium game with small businesses are going to have a transparent marketplace in which they must compete. Not going to cry about that. Calculating risk over only the pool of a small business’s employees is simply a profiteering scheme to rake over profits in an unequal market. Any small business employee could go get a government job tomorrow and be insurance-eligible. It makes no sense to treat these people differently because they work for a small company.
Public governments: if the lore is true that that many government jobs pay less than the private sector, but employees take them because the jobs come with great benefits, the governments may lose good employees to the private sector. I used that argument myself with prospective employees when I was the hiring official in state university system, but they people I wanted to hire didn’t come for the benefits. People choose to apply for public sector positions for lots of reasons, so I doubt this is a serious issue.
Large sector private industry uses benefits packages as a competitive hiring advantage over small companies. Since small businesses create the bulk of new jobs and wealth, I’m not too worried about large companies losing their edge over small businesses in the hiring game.
Incorporated into the cost of hospitalization is the overhead of the uninsured. If someone shows up at a hospital with a gunshot wound or heart attack, that person will be treated, and if the patient is uninsured, and the insured all share the cost as part of the hospital overhead. We who are insured all benefit when more people are insured.
Small businesses: I believe that the unavailability of medical insurance for small companies is a serious brake on entrepreneurship in this country. People with good ideas are willing to sacrifice and risk their assets, but not their families’ health. Guaranteeing access to decent medical coverage will unleash an army of entrepreneurs who will create new jobs.
Large businesses: I can see a new market for reselling insurance. Costco, Fedex, Walmart, UPS all have employees in national markets. If they can sell access to their employee insurance pools for less than the public sector and make profit, hallelujah!
My idea is a game-changer. Go forth and discuss. Let me know how it turns out. If you want to make a donation to the “Bronze Ansel’s Tripod Holes” fund, I’ll be back shortly with details on that program. I don’t have time to solve everything all at once.