A Clarification
Reading back through my last few posts, there seems to be one point that I haven’t made clear. It goes all the way back to my original post setting out how a government “pooled” plan would help cover the uninsured.
That post could be mistaken for a tacit endorsement of a “government option”. It is anything but the sort. Those in the government “pool” will be still be covered by private insurers. Think of it as the largest “group plan” known to man. It will serve a variety of purposes.
One purpose, of course, is to get subsidized, catastrophic health coverage to those who utterly cannot afford it (those at the poverty line, maybe twice). Getting ALL Americans some type of catastrophic coverage is the primary objective.
However, some secondary benefits are to allow the government to encourage competition between private insurers. What the government can do is set out a minimum level of coverage with strict guidelines for what level of service is required. It could then ask private companies who are actuarially sound to bid on the base price. We’re talking about several million guaranteed customers; the government’s got the cash in hand. Who wouldn’t want to bid on this?
The accounts would then go up for auction and would land for that year with the lowest bidder. This is effectively allowing the market to set a “base price” for a “standardized plan”. Of course, as I mentioned earlier, those who choose to forgo coverage and wind up in this pool will be charged an additional percentage (unless they’re subsidized of course).
So if the bid comes in at $1,500/person for this “standard plan”, and you have means to purchase coverage but choose not to, the government would tax YOU $2,000. Again, this is an incentive for you to go out and get your own coverage. This $2,000 (or whatever the amount is) will pretty much be setting a ceiling for coverage. Any health care provider who can offer the “standard plan” below this level—while meeting a minimum level of service requirements—stands to pick up millions of new customers.
So with this government “pooled” plan, we get to offer subsidized coverage to the needy, tax those who are driving up health care costs by forgoing coverage when they can afford it, and allow the MARKET (not government!) to set a ceiling for a “base” policy.
And most importantly, it keeps the bureaucracy simple. No huge government program, protection for private insurers, competition to lower costs, choice for Americans….seems pretty reasonable?
That post could be mistaken for a tacit endorsement of a “government option”. It is anything but the sort. Those in the government “pool” will be still be covered by private insurers. Think of it as the largest “group plan” known to man. It will serve a variety of purposes.
One purpose, of course, is to get subsidized, catastrophic health coverage to those who utterly cannot afford it (those at the poverty line, maybe twice). Getting ALL Americans some type of catastrophic coverage is the primary objective.
However, some secondary benefits are to allow the government to encourage competition between private insurers. What the government can do is set out a minimum level of coverage with strict guidelines for what level of service is required. It could then ask private companies who are actuarially sound to bid on the base price. We’re talking about several million guaranteed customers; the government’s got the cash in hand. Who wouldn’t want to bid on this?
The accounts would then go up for auction and would land for that year with the lowest bidder. This is effectively allowing the market to set a “base price” for a “standardized plan”. Of course, as I mentioned earlier, those who choose to forgo coverage and wind up in this pool will be charged an additional percentage (unless they’re subsidized of course).
So if the bid comes in at $1,500/person for this “standard plan”, and you have means to purchase coverage but choose not to, the government would tax YOU $2,000. Again, this is an incentive for you to go out and get your own coverage. This $2,000 (or whatever the amount is) will pretty much be setting a ceiling for coverage. Any health care provider who can offer the “standard plan” below this level—while meeting a minimum level of service requirements—stands to pick up millions of new customers.
So with this government “pooled” plan, we get to offer subsidized coverage to the needy, tax those who are driving up health care costs by forgoing coverage when they can afford it, and allow the MARKET (not government!) to set a ceiling for a “base” policy.
And most importantly, it keeps the bureaucracy simple. No huge government program, protection for private insurers, competition to lower costs, choice for Americans….seems pretty reasonable?
posted by Cogito at 9:20 AM
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