Friday, February 16, 2007

President Bush Has a Proven Strategy to Fix the Individual Health Insurance System!!!

The Bush administration has already implemented an individual health insurance system that is voluntary, community rated, and excludes no one--no matter what their age or health status.

President Bush's recent proposal to reform the health insurance system
(see post) is based upon greater use of the individual health insurance system. He would eliminate the employee tax exemption on employer-provided health care and substitute a standard deduction of $7,500 for individuals and $15,000 for families.

His proposal is a non-starter in the Democratic Congress as it is.

But, now 10 Republican and Democratic Senators are signaling they are willing to work with the White House on a reform plan (see post) that puts the employer health care tax preference on the table. As a result, there may be some long-term hope for the many conservatives who would like to rebuild the U.S. health care system in a way that transfers the ownership of coverage to the individual.

Proponents of an individual-based health insurance system argue that the employer system has too often sheltered consumers from the real cost of health care and that has had a great part in driving costs up.

Others, often Democrats, want to build on the existing employer-based health insurance system and believe the most efficient way to provide care is through the largest risk pools that employers--and existing government programs--generally provide.

Both sides make good points and my own opinion is that both an employer-based system and an individual-based system can work. They can even work together.

However, one of the most legitimate complaints regarding the individual-based system--and the Bush proposal--is that the individual health insurance market is nowhere near where it needs to be to offer affordable coverage (see post).

In the individual market today, a healthy 20-year-old can get coverage for less than $1,000 per year. But a 60-year-old might pay $5,000 per year. If that 60-year-old is sick, they probably wouldn't be able to get coverage at all. These, and other issues endemic to the individual market, make it unusable in its current form as any kind of platform to deal with the large number of uninsured we have.

But, George Bush knows how to fix the individual health insurance market.

In fact, he's been incredibly successful at showing us a model in the individual market that insures more than 10 million Americans.

His administration has successfully launched individual health coverage that charges the same price no matter how old you are--there are people in his system that are a good 30 years apart in age--and the price doesn't vary based upon their health status. In his system, everybody gets coverage no matter how sick they are--as long as they sign up when they are eligible. And, they don't have to buy the coverage--it's completely voluntary and about 10% of the people haven't bought it. It's also an incredibly (and to me surprisingly) competitive market with insurers tripping over each other to participate. In fact, the price for coverage is lower than most of us thought it would be. And, those that have low incomes get direct premium support so they can afford it.

Yep, it's Part D.

In Part D, we have 65-year-olds and we have 95-year-olds--a 30 year spread. We have healthy people who don't take any drugs and we have the sickest and most expensive patients in the country in Part D--all paying the same price for the same policy. We have more insurers than we need all competing on product and price and the number of those offering Part D increased this year.

The individual market can work---------and George Bush knows how to do it!!

Who would have thought!!!

Now if he would just take his tax proposal and fill in the rest of the details.
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