Quote:
Originally Posted by zerospinboson
[GREAT BIG SNIP]
At issue are not just preexisting conditions: the (i suspect more costly) problem is that normally you would've been (statistically) saving for your own later-in-life conditions. When you don't, you're forcing other (real) people to bear those costs for you.
The fact that you don't know the people whom you're forcing to pay for you doesn't detract from that at all. "Insurance" is not a game or control mechanism invented by the government, nor by evil corporations (although abuse may happen): insurance is a mutual agreement between those who choose to be insured to pay for each others possible costs.
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My favorite fix for the issue of self-selection is the Medical Savings Account (a.k.a MSA) plan that has been in very limited use here in the US in the past decade or so. It's been "very limited" because congress authorized an "experiment" of no more than (I think) 50,000 MSAs nationwide. And has never increased the number.
As usual, I'll probably blow it on the specific numbers I give in the description that follows! The general sense of the description is correct, but the exact numbers are probably off. If you want exact details, do your own research!
The idea is basically that instead of a traditional health-care plan or HMO or preferred provider plan or whatever, you and your employer fund a two things:
- A savings account whose contents may be used only for medical expenses.
- A high-deductible catastrophic care plan.
The high-deductible plan typically kicks in at $10,000 of medical expenses in any given year. Before that point it pays out nothing. Because of the very large deductible, it's quite inexpensive to purchase. Additionally, these plans typically have a very low copay when they finally kick in. I believe numbers in the 0%-1% range are typical, but I may be wrong.
The savings account is funded each year with a fixed contribution from employer and employee. That contribution is usually comparable to the delta between the cost of traditional health insurance and the cost of that high-deductible insurance plan. It is important to note that the delta fails to cover the full deductible on the catastrophic plan in any given year!
The key difference between an MSA and other plans in the US is that the individual -- the consumer of health-care services --
owns the cash balance in the MSA. It's their money! If they don't spend it this year, it builds up for future use. If there's any left when you die, it's part of your estate and can be left to your heirs.
The idea is that people are more careful with their own money than with other people's money (the infamous OPM).
In the case of someone like Nate the great, a plan like this would have him saving now to pay for his own expenses later. Part of that savings would be direct (via the balance in the MSA); the other part would be through the insurance pool for the high-deductible catastrophic coverage plan.
Various academics have studied the health outcomes and expenses of the (not very many) people covered by MSAs in the US. My recollection is that overall health outcomes are comparable to other forms of insurance (a good sign!). Further, MSA owners tend to be more engaged in asking questions of their medical providers (like "is this test really needed?" or "How likely is it that this procedure will fix my problem?"), and so wind up consuming moderately less medical services (also a good sign, given the comparable outcomes).
Sadly, expenses for MSA owners do not appear to be reduced. At least one study suggests that this is a result of a structural problem with pricing of health-care in the US -- insurance companies negotiate fixed prices, but individuals pay "list", which is always the highest price going. The largest provider of MSA plans in the country has been attempting to address this problem by giving MSA owners an "insurance card" that lets them use the insurance company as their payment agent (and price negotiator!) for their MSAs. When last I checked into things it was too soon to know whether or not this would work around the pricing problem.
There are some other unanswered questions that need more research. These include (but are not limited to):
- Did self-selection issues lead to a population of MSA-owners that is net healthier than the general population? (initial studies say no, but there's not enough data yet to give a definitive answer.)
- Is the MSA-owners' greater involvement in health-care decisions a result of the "it's my money" factor, or is it a result of better-educated and more sophisticated people self-selecting into the program? This one is wide open research-wise, as far as I am aware.
- What's the best choice for sizing the gap between the yearly contribution to the MSA and the point where the catastrophic insurance plan kicks in? There's been no opportunity to study this, because the design of these plans is congressionally mandated.
How 'bout it, Nate? Does that sound like a plan that would get your attention?
Xenophon