A Better Approach

In the State of the Union Address, the President stated, "But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know. Let me know. Let me know. I'm eager to see it." Well, here is a start.

Let's begin with the premise that all insurance in operated in the same fashion. Actuaries (ultra numbers crunchers) determine premium rates by the propensity for the company to incur a loss on the account. It doesn't matter if they are insuring a car, boat, life or health of an individual or group.

1) How do you bring down health insurance premiums?

Do you have difficulty finding affordable auto insurance? No? Neither do I. Neither to any of the untold number people with the pr-existing condition of being a truly horrible driver. Companies are in fact clamoring in competition for the privilege of insuring them and offering "accident forgiveness".

Do you have difficulty finding affordable life insurance? No? Neither do I. There are many A+ rated insurance companies offering the lowest term life insurance rates in decades.

Is it necessary to purchase either one of these forms of insurance through your employer? No. A larger group plan may offer lower premiums because the insurance companies risk is dispersed over more account holders, but it is not necessary because those who provide this insurance must compete for the business. Why do we continue to hinder the competition that will bring down premiums by remaining committed to employer sponsored health care? It is a good question to ask both parties.

2) How can we bring down the deficit, cover the uninsured, strengthen Medicare for seniors?

It merely takes a rudimentary knowledge of how insurance works. Using auto insurance as a metaphor, drivers with the pre-existing condition of being a really, really bad driver can't get affordable insurance on their own. In some states the Insurance Commissioner establishes a Joint Underwriters Association that insures these poor driving challenged individuals. It is a "pay to play" system where if the insurance companies want to do business in that state, then they will pool together to insure those that are otherwise un-insurable. For doing this, they are permitted to conduct business in the state. However, in health care, the un-insurable are relegated to the Medicare and Medicaid roles. Simply stated, the insurance companies will cover these costs for the right to make money on the millions of other policies they can write. Let's see:
This will reduce government spending on health care and hence lower the deficit. (Check)
This will help the uninsured become able to be insured. (Check)
With less money spent, this will free funds for seniors on the Medicare roles. (check)

Does the implementation of this get a little more complicated? Yes, but not nearly as complicated as our current system of coverage. See these links for further explanation of JUA's and their applicability.