Publisher's Note: Health care solution
By Jody Reese
I recently met with a friend who was thinking of opening his own business. Everything was was working out until he hit the health care roadblock. It was going to cost him several thousand dollars a month to insure him and his family. He could choose to go without or forget his business idea.
Our system of paying for health care doesn’t work for many and it’s only going to get worse. As it is now business pays a good portion of private insurance costs, but many employers are shifting more of that cost to employees or canceling policies completely.
Health insurance has stopped being insurance for many of us. I compare it to a maintenance plan for your car that you prepay rather than an insurance plan that only covers accidents. If you use your insurance for upkeep, then it’s not really insurance. It’s more of a flat-rate maintenance program for your body. That’s really what we’ve come to expect. That expectation has put insurance companies in the business of creating health maintenance organizations that really are designed to keep the cost of medical service down, not to insure us against medical catastrophe. Some insurance plans have tried to address this through heath savings plans, but those are little better. Our whole medical system is now geared toward standard insurance plans, from how hospitals overprice for things to how we are treated in the emergency rooms.
The solution is rather simple, though. We’ve already found it and it works great — Medicare and Medicaid. While not loved by all, these government programs offer very affordable coverage at a very low administrative overhead. They act as a cost curtailer and have the clout to set rates and force them on hospitals, medical suppliers and pharmaceutical companies. This program should be extended to everyone who wants it.
For those who want more insurance, as many on Medicaid currently do, they could buy additional private insurance for those catastrophes. Businesses could offer that as an extra perk if they chose. Those better off could even opt out and buy their own package, similar to people sending their kids to private schools.
So how would this be funded? The same way it is now. Currently, the employer and employee each pay 1.45 percent of payroll the Medicare and Medicaid, a total of 2.9 percent. Most private employer insurance plans run about 12 to 15 percent of payroll. Even if we increased the rate to 12 percent, we’d be much better of than we are now.
As it stands about 15 percent of Americans are already covered by Medicaid and another 14 percent are covered by Medicare. About 60 percent of Americans are covered by employer plans.
The entrepreneurial spirit is what keeps American moving forward and rising medical costs put that at risk. It’s time we created a system we all buy in to — and we already have this one. Simple is best.