With the universal healthcare debate picking up for 2008, I think it’s appropriate to suggest one potential solution.
As a self-employed person, I am left to my own resources for finding and choosing health coverage. After literally years of research, I chose a health savings account with a high-deductible health plan. It allows me to save money (tax-advantaged money, I might add. I get a deduction for putting that $4,800 into my health spending account each year and it’s profits aren’t taxed.) for health-related spending AND covers me against large healthcare costs.
Under this plan, I pay for all of my healthcare spending up to my deductible, which is $4,800. After I hit this number, the insurance company covers all my additional healthcare needs.
This system encourages me to be frugal and not overuse the medical system – I have to spend my own money to see a doc! If I don’t spend all the money in a given year, the excess funds become a great long-term savings vehicle. Then again, if I or my family experience a real medical emergency, the insurance company steps in to save the day.
These HDHPs, then, benefit both the insured (me) and the insurer (the guys NOT paying the bills when I’m frugal). That’s why so many more companies are turning to HDHPs.
My suggestion is this: let the government become the insurer of emergency healthcare spending and provide this type of coverage to every American. (The gov. should also pay for people that can’t afford to cover any medical costs.)
Under the HDHP system, this would be a cost-effective way to achieve universal coverage. Americans would be encouraged to save and not place undo burden on the insurance/healthcare system. Still, they would be covered in the case of a tragic medical need and the insurer would not be paying for every runny nose every kid in the country gets every winter.
It’s not a perfect system but, in my mind, it is the perfect compromise.