I see lots of people up in arms about President Obama's plan to reform health care.
Anytime a Democrat holds a town hall meeting to discuss the issue, he or she gets shouted down by a bunch of people who apparently are scared silly by the idea of government-run health care.
I can understand that.After all, it's not like the government has this brilliant track record with regard to running any type of program.
Usually, government-run programs are fraught with fraud, waste and inefficiencies.
Nonetheless, it seems to me that something needs to be done. I don't think anyone - especially people who have to deal with health insurance companies - would say the current system is in no need of improvement.
Some people say that what we truly need is a single-payer system. That takes the insurance industry completely out of the health care business. The single payer is the government and they dole out all the payments to providers through a network of government bureaucracy.
Proponents of a system like that point to Medicare. That's a single-payer system that works well, they say.
Well, I suppose it works, but saying it works well is a stretch.
Let's be honest. Medicare's trustees earlier this year came out with the bleakest-ever assessment of the plan. They warned that without changes, the program's biggest fund would be insolvent in just eight years.
Things are getting worse as policy wonks look at the demographics of the baby boomers who will soon be entering the program.
The current economic downturn, which has killed millions of jobs, hasn't helped either.
Medicare has been around for about 50 years and provides health insurance to some 45 million people - mainly senior citizens. It's funded by taxes on employers and workers amounting to about 15 percent of wages.
And it's going broke. So to hold up Medicare as an example of how well a single-payer system works seems a bit silly.
If a single-payer system can't sustain itself with only 45 million members while consuming 15 percent of wages in this country, how in the world could it sustain itself if it was serving 300 million of us?
That's seven times as many people in the program. Multiply seven times that 15 percent tax and you get 105 percent. Even if lower administrative costs could reduce the overall cost of health care by 50 percent - which is highly unlikely - that's still a 55 percent tax.
That's just silly. It can't happen.
The reason Medicare is going broke is simple. Health care costs are rising faster than everything else - inflation, wages, GDP, GNP - everything. As long as that continues, I see little hope of any type of reform working.
So why are health care costs rising so rapidly?
Mainly, I think it's the way it's structured. Most people don't buy health care with their own money. Let's face it. If we bought groceries and cars like we buy health care, we'd all be eating lobster and driving BMWs.
So here's my idea for health care reform.
Let's make health insurance more like car insurance. When you need a tune up or a battery or even a transmission or an air conditioner compressor, you don't call your auto insurance company. You shop around for an auto mechanic and you get it fixed. Maybe you have to put it on your credit card, but you pay for it.
Let's do health care like that.
Everybody gets a $5,000 deductible major medical insurance plan to take care of the serious, expensive stuff.
Then, everybody working gets a health savings account. The money comes out of your paycheck pre-tax. Here's where the government could help. They could add an incentive for HSA accounts, say matching at 20 percent. So, for every 10 dollars you withhold, you save $3 bucks in taxable income and get an extra $2 dumped into your HSA.
So withholding $2,000 per year would amount to $2,400 in your HSA.
Throughout the year, you pay for your doctor visits and prescriptions out of the HSA. If you spend all of your HSA and need more, hey, put it on your credit card. But once you hit $5,000, insurance takes over.
If you don't spend it all, you can buy Christmas presents with it or roll it over into the next year, depending on how healthy you are.
Look what happens here.
First of all, you are now a consumer of health care. You will shop around. If your doctor charges $75 for an office visit and the doctor down the street charges $50, change. If prescriptions are cheaper here than there, you'll go here.
And if that knee isn't really hurting all that bad, you might forego the x-ray. An if you don't have a fever with that scratchy throat, you might just let it run its course instead of rushing off to get a prescription.
And since you're now paying for your own health care, you might be inclined try a little more preventative maintenance. Maybe eat a little better, lose a little weight, stop smoking or cut back on the booze.
All of these things would work to lower costs of health care. Simple rules of supply and demand start to apply.
The cost of insurance also would fall because a whole bunch of things previously covered by insurance would get picked up by the HSAs.
Insurance administration costs also would fall because the number of claims to process would fall exponentially.
And the cost to the government - that little HSA match - is minimal.
In a situation like this, the government would be more likely afford a "public option" for people who don't work and can't afford insurance.
One more rule.
If you work, you can't take the public option. You have to have an HSA and a $5,000-deductible plan. Employers who currently provide health insurance for their workers would love it because the premium on a high-deductible plan like that is lots cheaper than tradition plans with co-pays and prescription coverage.
So there you have it.
An idea for health care reform. It's not perfect. But it's a start. And I bet people wouldn't shout me down if I pitched it at a town hall meeting.
