For some time now I've been a supporter of a single payer health care system because I feel that it is necessary to really address the inherently uncompetitive nature of health insurance. I've spent a lot of time trying to come up with some way to provide the benefits of a single payer system but without creating a monopoly for the government. I think I have a solution and I'd love to get some feedback on if this makes sense.
What I would propose is to create three entities. Then these entities would be run independently with their own missions and goals. But ultimately they would interact with each other in ways that would provide a fairly effective health insurance system.
The first would be a health insurance company run in a manner similar to the postal service. That is, they would be chartered and initially funded by the government, but it would be a self sustaining private entity. They would take in money from premiums and copays, and then pay out benefits just as any private insurer would. Other than the initial seed capital, they would not take in any tax revenue.
The second entity would be a tax payer funded organization that rolls in Medicaid, and Medicare, and then also creates an extended facility for funding insurance of the unemployed. This would provide the "universal" element of this plan, filling in the gaps of people who would not otherwise be covered. This would be a rather light weight organization, merely providing an umbrella for taking in tax revenue and writing checks back out.
The third would be an agency that would act as a kind of health care gateway. The way it works is that it would set up a certification program that would identify health care plans that meet government standards. Those standards would outline minimum coverage requirements, quality standards, etc. It would also require health care plans to not discriminate based on preexisting conditions, etc. The first agency I described would be required to provide a health care plan that met these standards.
Integration
So the way this works is that the certifying agency would provide a website (probably more than that but it's how I'm visualizing it) where people could shop for health care plans. Any health insurance provider who participated in this website would be required to meet the minimum standards of the certifying agency. So this site would provide a gateway to selecting a health insurance plan from either the public health care option described above, or any number of private providers.
Health insurance providers participating in the program would be required to provide a simple run down of benefits and costs in a one or two page summary. Tools would allow people to search for particular features (low copays, low deductibles, high customer satisfaction, etc). The costs would be outlined and people could choose how much they want to pay and see what those cost differences bring them in terms of provided services. Every plan though would have to meet the minimum requirements outlined by this agency.
Government Support
With that basic structure we then add the second government agency I outlined above and have it spend those health care dollars through this gateway agency. Each participant would be allocated dollars that they could spend on any plan in the program. The amount of money they'd be given would be tied to the cost of the public option established by the first agency as outlined above. So if that option was $500/month then a consumer would have $500/month to put towards any health plan on the site.
If a private insurer can provide coverage for cheaper, then the person selecting the plan would get 50% of the savings as a rebate. So if you choose a plan that's $300/month you'd get $100/month in your wallet for choosing the cheaper plan. Thus you have an incentive to go for a cheaper plan, but the government would also benefit from this. This encourages cost competition, but remember all participating providers are required to meet minimum standards or they get dropped from the program.
Also, keep in mind, you could select a more expensive plan that provided additional benefits than the baseline public plan. You'd have to pay the difference out of pocket, but if it provides additional features that you want, then you can get that.
Employer Requirements
To tie this all together, employers who have more than a certain number of employees would be required to provide health care benefits. They would either have to:
- Provide a health care plan selection of their own that matches the certification criteria. There would be a phase in period as this program was implemented giving their existing insurance programs time to get certified.
- Participate in the government website, giving their employees a choice of programs with a dollar amount set aside by the employer that meets the public option minimums
Anybody who is unemployed or works for an employer that is too small would qualify for a government subsidy of their insurance. That subsidy could then be spent through the health care portal.
Benefits
- Provides universal coverage through a combination of employer mandates and government subsidy of those not covered by the mandates
- Provides competition in the insurance market allowing private insurers to provide better benefits, lower costs, higher quality, etc if they can
- Provides a level ground for competition between providers without giving a public option an unfair competitive advantage
- Allows individuals to select their health care plan and move between providers with relative ease
- Provides incentives to insurers to lower costs
- Provides oversight of the different insurance plans, establishing minimum standards, and providing a good basis for comparing plans
- Provide a means for consumers to rate their plan satisfaction and have penalties for insurers who do not meet satisfaction thresholds
Is this workable? Anybody see major flaws? You could skip the employer mandates and just do a universal system but I figured this would make a transition go more smoothly.