Wednesday, August 19, 2009

Basic Coverage


Some time ago, in a previous debate, I offered that a possible solution would be to simply expand Medicare to cover all citizens. Looking back on our list of goals, I now think this idea is probably the best framework on which to construct a workable system which includes both private and public options.

Go here for a fairly comprehensive review of U.S. health care costs, performance and proposed changes. From that site, we find that a little over 46% of all health care spending in the U.S. is accounted for by government. Despite the fact that the CATO Institute generally opposes reform, they do agree with that percentage:

It has occurred to me that if spending per capita in the U.S. is roughly double what it is in other developed countries, then 46% (which works out to 7.5% of GNP) of that spending should be sufficient to provide basic health care for every citizen in the U.S., assuming of course that this change in spending is accompanied by a number of overall decreases in health care costs.

So, in order to get the ball rolling, here is one possible strategy:

1. Calculate the entire amount currently spent at the state and
federal levels on all forms of health care.
2. Divide this sum by the total population to arrive at individual
health care accounts (IHCA's) per person.
3. Adjust the IHCA's against actuarial data for various age groups.
Older populations would generally have much higher IHCA's than
younger populations.
4. Every citizen would then receive a Medicare identity card which
would be used to track spending against their IHCA.
5. Automatic enrollment in Medicare would then entitle every citizen
to Medicare's overall system of health care. Choices on doctors,
hospitals, etc. would be limited to Medicare's schedule of approved
doctors and facilities.
6. Citizens who annually spend more than their IHCA would
incur"deficits", subject to repayment according to
a schedule to be determined.
7. Citizens who annually spend less than their IHCA would recieve
half of the savings in the form of a tax rebate.
8. Citizens can use their IHCA to purchase private health insurance.

Now the concept of health care reform in this country generally embraces two issues: First, universal coverage, and second, lowering overall costs. This post addresses Item #1 in my suggested list of goals: "Provide a reasonable level of health care for every American citizen".

What do you think?


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