Dave Dyer

Fixing Obamacare is Easy
By
Dave Dyer

I have a plan to fix Obamacare. The goals of my plan are to make insurance available to all and less expensive while having less government involvement in the medical choices that people make.

There are three steps in my plan. The first one addresses the cost of health insurance. The second one takes care of people with pre-existing conditions or who exceed the lifetime limits on their policies. The third one provides a permanent solution.

Step 1: Can you imagine how expensive auto insurance would be if the insurance company had to make their product available at the same price to any driver who came along? The fellow with lots of wrecks and tickets would get the same price as the good driver, and it would be very high. It sounds crazy, but that is exactly what they are proposing to do with health insurance by forcing insurance companies to take people with pre-existing conditions. The people with pre-existing conditions are certainly going to cost more for the insurance company and these costs will be passed on to the other customers. The same reasoning applies to the abolition of lifetime maximums for each patient. If the insurance company is going to insure potentially unlimited expenses for each customer you can bet they will raise premiums to cover those costs. In auto insurance, the liability insurance they sell you is always capped at a specific amount and the collision damage is capped by the value of your car.

So, just eliminating those government requirements (covering all per-existing conditions and having no lifetime maximum) would allow the insurance companies to provide less expensive policies. It costs the government nothing to make this change.

Step 2: Something must be done to make sure that people who are uninsurable will still have an opportunity to buy insurance. What luck!! The government already runs a huge insurance company that takes people with pre-existing conditions: Medicare. This massive asset has been running for decades so we do not have to start from scratch. Medicare has the staff, the programs, the offices, the procedures and relationships already in place, but they are restricted to those over 65 or with disabilities. Just open Medicare to people with pre-existing conditions that make them a bad risk for the private insurance companies. These would need to be well-defined and Medicare might also need to price coverage higher than they do for the over-65 folks, but this is a topic for the actuaries to work out. The important thing is that an option would be available that would take people who can’t find coverage from a private insurance company. In the same fashion, Medicare could be used as a backstop for people who exceeded the lifetime maximum coverage of their private insurance.
Of course, this will cost the taxpayers some money, but money is going to need to be invested in Medicare anyway, and this could be a part of the larger project of making Medicare financially sound. Medicare is a major government resource and it should not be ignored.

Step 3: President Trump could bring in all the insurance executives and give them this speech: “Listen up you jerks because I am only going to say this once. The government has screwed up this health insurance thing big time. Now, I want you to fix it. I will give you just two years to find a way to sell inexpensive health insurance to healthy younger Americans. The government is going to take care of the elderly, the disabled and the ones with pre-existing conditions so your risks will be lower. The government is also taking care of the really poor people with Medicaid, so you are left only with the of business and just open Medicare to all. The only thing you can’t do is raise premiums on someone just because they have gotten sick. You have to take that risk when you sell the policy. Do you understand?”

This may be the oldest management trick in the world; I know you didn’t break it but if you don’t fix it you are fired. If this doesn’t work, we probably don’t deserve to have a private health insurance industry.

Note that over time, the need for Medicare to cover people with pre-existing conditions should diminish. If the insurance companies are successful in selling to younger people, and can’t increase premiums just because someone gets sick, more people will be covered when they do eventually develop something that requires expensive treatment. The need for the Medicare backstop will decline after a generation of people has been covered by private insurance. And if they have had good preventive care over time, they are less likely to need that expensive treatment.

My three step solution