A Solution to Health Insurance

So simple a caveman could do it

Insurance is meant for one thing – insuring against unexpected events.  Health insurance is a unique beast in that it is not insurance.  A solution to the entire health system is to implement an insurance program like home or auto insurance.  In this case a person who has insurance goes in for a normal visit to the doctor (and pays for the visit).  After some work the Doctor says “You have type 2 diabetes.”  The insurance company looks at their tables and calculates the expected lifetime cost of treatment for type 2 diabetes and then pays that directly into the patient’s HSA.  No further payments for type 2 diabetes are paid again, ever, for that patient.  The patient can now spend whatever they want for type 2 diabetes treatment (including lifestyle changes that will eliminate the need for treatment).  Same for lung cancer, or chronic heart disease.  Accute trauma would be paid based on a bill from a hospital, and so on.

So simple.  Also encourages personal responsibility because let’s say I pay you $100k for type 2 diabetes, but you have the ability to manage your care so that you don’t need treatment.  You can now do whatever you want with the money!  Your provider can’t drop you for exceeding your limit because there is never another payout based on the same diagnosis (except for things like broken arms, and cancer re-occurrence).  You can compare companies by looking up what their payouts are along with their premiums.

Honestly, the whole bill would be maybe 50 pages long, start by repealling all the junk national healthcare laws we have, return regulation to the states, and allow this type of insurance to be paid across state lines.  All persons with pre-existing conditions (as of 1/1/2015) would be admitted to Medicare for care in regards to those conditions (but only for the treatment of those conditions) and the rest of the nation is free to pursue whatever insurance they want.

Require employers to estimate health benefits and tax as ordinary income, but allow employer payments directly into HSAs tax free.  This covers treatments rationally and introduces price sensitivity.

I don’t get why this isn’t being pushed.


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