Here are eight reforms that would greatly lower the cost of health care for everyone:
• Remove the legal obstacles that slow the creation of high-deductible health insurance plans and health savings accounts (HSAs). The combination of high-deductible health insurance and HSAs is one solution that could solve many of our health-care problems. For example, Whole Foods Market pays 100% of the premiums for all our team members who work 30 hours or more per week (about 89% of all team members) for our high-deductible health-insurance plan. We also provide up to $1,800 per year in additional health-care dollars through deposits into employees' Personal Wellness Accounts to spend as they choose on their own health and wellness.
Money not spent in one year rolls over to the next and grows over time. Our team members therefore spend their own health-care dollars until the annual deductible is covered (about $2,500) and the insurance plan kicks in. This creates incentives to spend the first $2,500 more carefully. Our plan's costs are much lower than typical health insurance, while providing a very high degree of worker satisfaction.
• Equalize the tax laws so that employer-provided health insurance and individually owned health insurance have the same tax benefits. Now employer health insurance benefits are fully tax deductible, but individual health insurance is not. This is unfair.
• Repeal all state laws which prevent insurance companies from competing across state lines. We should all have the legal right to purchase health insurance from any insurance company in any state and we should be able use that insurance wherever we live. Health insurance should be portable.
• Repeal government mandates regarding what insurance companies must cover. These mandates have increased the cost of health insurance by billions of dollars. What is insured and what is not insured should be determined by individual customer preferences and not through special-interest lobbying.
• Enact tort reform to end the ruinous lawsuits that force doctors to pay insurance costs of hundreds of thousands of dollars per year. These costs are passed back to us through much higher prices for health care.
• Make costs transparent so that consumers understand what health-care treatments cost. How many people know the total cost of their last doctor's visit and how that total breaks down? What other goods or services do we buy without knowing how much they will cost us?
• Enact Medicare reform. We need to face up to the actuarial fact that Medicare is heading towards bankruptcy and enact reforms that create greater patient empowerment, choice and responsibility.
• Finally, revise tax forms to make it easier for individuals to make a voluntary, tax-deductible donation to help the millions of people who have no insurance and aren't covered by Medicare, Medicaid or the State Children's Health Insurance Program.
On a side note: Aside from equalizing the tax benefits of individual and employer health insurance, is there any reason not to provide incentives for "voluntary solidarity organizations" (to attempt to coin my very own "social justice" term) to provide health insurance in the same large-pool way that big employers do?
For example, at the Fortune 100 company I work for, we have a choice of two insurance companies (Aetna and Humana) and several different plan options within each company. Everyone in the family is covered regardless of medical conditions, and the prices are based on the overall company population. Now, if I had the option to instead sign up the my parish, or better yet (larger pool) my diocese, or through the Knights of Columbus or some other Catholic organization like that, I'd be happy to do so -- even if the cost was a little bit more. (I know that the life insurance I have through the Knights is roughly in line with market prices, but I didn't worry about whether it was the lowest because there were non-monetary reasons for working with them.) Having an insurance pool administered by the diocese or the Knights would also provide an obvious mechanism for giving people who couldn't afford coverage lower costs, while making that up through donations from members willing (indeed, eager) to help cover the less fortunate.
I believe there would have to be some different regulations in place to support that kind of thing (right now, it's all pointed towards employer-funded care with a very small number of people covered individually, often under rather unattractive terms) but is there a practical reason it wouldn't work well? Perhaps combined with a trend towards a HSA/High Deductible Insurance type of insurance?