A Plan for Healthcare

by mlumley

Sunday, September 13, 2009 at 05:22 PM EDT

A few days ago, I said that it wasn’t good enough anymore to simply oppose the Obama healthcare plan, because it tacitly implied that the current system worked. So instead, I developed my own plan – a plan that embraces market principles to bring reform to the health care system. So here it is…

I. A public voucher system will provides all citizens with funding to purchase a private catastrophic coverage health insurance plan on an open competitive market.

a. Receipt of a voucher will be conditional upon employment (or active and documentable pursuit of employment) for all adults. For children beyond the age of 5, receipt will be conditional on school enrollment. For retirees, vouchers will be conditional on completion of 160 quarters of FICA covered employment.

b. The amount of the voucher will be, in principle, sufficient to cover the cost of a basic catastrophic coverage insurance plan. (E.g. $10,000 deductible.)

c. The voucher will only cover the cost of insuring an individual with ‘healthy’ behaviors (E.g. Smokers and the Obese may find that their voucher is insufficient to cover their premiums, and must supplement their vouchers with income from other sources.)

i. For the purposes of these catastrophic coverage plans only, discrimination (either based on premium price or enrollment in general) will not be permitted.

ii. Beneficiary behavior will be permitted to influence premium price, however, no plan may reject any candidate outright.

iii. Obese individuals with documented thyroid dysfunction will be classified under ‘pre-existing condition’.

d. All plans purchased on the voucher must meet certain requirements established by an appropriate regulatory agency to ensure that catastrophic coverage is sufficiently guaranteed.

e. All catastrophic plans may offer additional benefits, in an effort to attract customers, so long as the catastrophic coverage provisions are met.

II. Further insurance will be available on an open market, as it always has been. For these supplemental plans, insurers will be free to charge whatever premium they wish, for whatever reason they wish.

a. Employers are permitted to provide additional coverage to their employees, but such benefits shall be taxed as income.

b. Contributions to Health Savings Accounts (HSA’s) will continue to be tax exempt as under current law.

III. Low income families will receive cash payments known as “Healthcare Related Supplemental Income” (HRSI) for the purposes of providing basic health coverage.

a. Receipt of HRSI will be conditional upon employment (or active and documentable pursuit of employment) for all adults. For children beyond the age of 5, receipt will be conditional on school enrollment. For retirees, benefits will be conditional on completion of 160 quarters of FICA covered employment.

b. Distribution and amounts of HRSI payments will be determined as follows:

i. The Secretary of Health shall develop, in consultation with the appropriate regulatory agencies, a “Basic Healthcare Budget” (BHB) which will establish appropriate guidelines and expected average annual costs for Basic Heath Care for various household structures. For the purposes of this act, Basic Health Care will include payments for:

1. Annual checkups;
2. Standard medically necessary immunizations;
3. Preventative care, and
4. Medically necessary life saving treatment.

ii. HRSI will be paid on the following formula: HRSI = BHB – (0.3 * Household Income).

Ex1. A household with annual income of $10,000 and a BHB of $4,000 would receive a HRSI benefit of $1,000. ($4,000 – $10,000 * 0.3)
Ex2. A household with annual income of $60,000 and a BHB of $8,000 would receive no HRSI benefit. ($8,000 – $60,000 * 0.3)

c. HRSI benefits may be spent for purposes other than the procurement of health care.

d. Households will heretofore be assumed to have sufficient income to cover their medical expenses, resultantly no hospital shall be prosecuted for denial of service based on inability to pay, nor shall any hospital debt be absolvable by bankruptcy court.

IV. Medical malpractice tort law will be reformed.

a. Medical malpractice torts will no longer be sufficient cause for the award of punitive damages.

b. All medical malpractice torts will adopt a ‘loser-pays’ system for court costs and legal fees.

V. This program will be deficit neutral.

a. Medicaid and Medicare will be repealed. FICA revenue collected for these programs will instead apply to the new healthcare initiative.

b. Tax revenue generated by the taxation of healthcare benefits shall also apply to the new healthcare initiative.

c. Should income from these two sources be insufficient to ensure deficit neutrality of this bill, a national sales tax will be implemented sufficient to pay for the unfunded portions of this proposal.

This article originally appeared on Iustia Lexque Cano.