This is part one of a four part series on the solution to replacing Obamacare. Remember that free enterprise works when the consumer makes a buying decision based on price and quality. Unfortunately Obamacare has taken the opposite approach. The result has been a disaster with rising prices and falling quality.
The first principle we need to implement is very straightforward. Businesses should not buy health insurance for their employees.
Before you scream in pain, I’m not saying employers should not pay for health care, just saying they should not buy it directly. Employers should contribute to a health savings account and the employee should buy healthcare themselves from this account.
Want the whole story?
This book was written by Joe Gilbertson of the Punching Bag Post Staff. This is the solution to the Obamacare fiasco:
The concept of a tax free health savings account is not new, but it should be expanded to support payments for all health care, including insurance, payments to doctors, and medicines. And perhaps more!
Employees then MUST take ownership of their decisions in buying healthcare products. And individual confronted with such decisions will select products based on price and quality, taking care of their own specific needs and paying attention to details that are important to them, including costs. They will also ignore items that are not important to them.
Now let’s take that to the next level. With careful shopping an excess will build in the health savings account. The individual can cover a larger deductible, therefore his monthly premium can go down. So the account builds faster.
So let’s add some incentives to this. If the insurance, deductible, and prescriptions, etc. are all paid for, and if there is extra money left, perhaps the individual can be rewarded for his frugality. Perhaps the individual could use the extra for health related activities, such as vitamins, health club dues or even the occasional massage. What better mechanism for ensuring the individual is focused on his/her own health?
Health coverage by employers is a remnant of World War II, when the government was forced to freeze wages to prevent rampant inflation. It seemed with a large percentage of able bodied men engaged in the war, the shortage of labor was causing salaries to rise dramatically. Once wages were frozen, companies used health benefit packages to entice the most qualified workers.
Then, as now, employers provide health care as part of their bottom line business strategy. This is not some altruistic impulse, it helps them attract and keep good employees. Ultimately the employer buys a group plan that is best for itself, easiest to manage and yet impressive enough to be attractive to prospective employees. They spend extra for brand names and for universal coverage, and customization is minimal.
However an individual on a company plan does not care about cost, he is not paying for it. This separation of consumer from price and quality is the problem. It means the consumer can demand more but he is separated from the consequences of a price increase. Its pressure from only one side of the equation, so prices must go up.
And that is a major problem with Obamacare – no mechanism to allow competition to force prices down. While the employer isolates the individual from the price and quality of healthcare, true competition is impossible.
Now do you get the picture? With individuals buying their own plans, the incentive is to get the best deal, because once you are covered, you get to enjoy the rest. The result is a population attuned to health and lower prices in health care.
Doctors will tell you the healthiest people are the ones interested in staying healthy. This one simple change in health care policy guarantees a healthier America at a lower cost.
Comments? Send to joe1@punchingbagpost.com.
Opposite of Obamacare – Part 1/4 – Businesses Should Not Buy Health Care
Opposite of Obamacare – Part 2/4 – Separate Health Insurance from Health Maintenance.
Opposite of Obamacare – Part 3/4 – The Federal Government’s Role