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July 08, 2005
Health Insurance for All using Health Savings Accounts
It is a law in all states that, in order to drive a car, the car must be insured. This prevents uninsured individuals from taking advantage of a system in which most other drivers are insured, and so keeps things fair for everybody. The governor of Massachusetts, Mitt Romney, thinks the same logic should apply to health insurance.
This week he proposed a mandate requiring all citizens of the state to either carry health insurance, or agree to pay their medical expenses out of their own pocket.
Currently about 7% of the state's population is uninsured. About one-fourth of those are eligible for Medicaid, but are not enrolled. About half of the uninsured earn at least 300% of the federal poverty level, and should be able to afford individual health insurance, particularly a low-cost high-deductible Health Savings Account (HSA) plan. The remaining 150,000 people would get state subsidies to help them pay for private health insurance.
Hospitals currently overcharge people with health insurance (and people who pay for medical expenses out of their own pocket) in order to cover non-reimbursed expenses for those who come in without health insurance or Medicaid, and who refuse or are unable to pay the bill when they leave. This is a blatantly unfair system, one which too many people take advantage of.
Though the federal government continually controls more and more of what goes on in this country, states fortunately still write their own health insurance rules. When individual states have the opportunity to experiment, the best solutions can rise to the top. I wish Governor Romney success in this venture, and am looking forward to seeing the results.
Posted by Wiley Long at July 8, 2005 10:03 AM
Comments
I disagree with the parallel drawn between health insurance and car insurance. If I am unable to afford car insurance then I don’t drive. If I’m unable to afford health insurance then what happens? Driving is a privilege but I would not classify health care as a privilege.
Posted by: Heather Shaw at July 19, 2005 02:02 PM
Thanks for the comment Heather, but I think you missed the point of the article. The parallel isn't drawn between being able to afford health insurance vs. being able to afford car insurance. It compares the two to show the effect that requiring people to have car insurance has on car insurance rates.
When was the last time you saw a headline that talked about the crisis of ever-increasing auto-repair rates? One of the reasons that auto insurance doesn't cost an arm and a leg is because we insure ourselves for things we
cannot afford. We pay for the oil change out of our pocket.
The same is true for homeowners insurance. It won't pay for new lightbulbs, but it will pay if a tree falls on your house.
The same is true for disability insurance. It doesn't normally pay if you get the flu and have to miss a couple days of work. But if you're out for two years, it'll pay.
Like all analogies, the comparison between health insurance and auto insurance is not perfect. Not everyone can afford health insurance, yet it would be immoral to prevent the very poor from access to medical care.
Fortunately, the majority of people who are uninsured can afford health insurance, they just choose not to purchase it. For instance, an HSA for a 40 year old male in my zip code, 80525, can be had for as little as $79.93/month. A $2,600 deductible 80/20 plan costs $95.53/month. A lot of people pay this much for their cable bill each month.
There have been many suggestions on how to get the consumer-driven healthcare model to the poor. One idea that Bush is proposing is to give people money to purchase their own health insurance, and even fund their HSA. This would give them an incentive to use their healthcare dollars carefully, and to stay in good health. The reward would be a growing retirement account.
Posted by: Wiley Long at July 19, 2005 04:05 PM
This Blog is really helpful to me. Its a learning experience. Hope everyone feels the same.
Michael Matthews
Posted by: Michael Matthews at May 4, 2006 08:18 AM