First of all, I am a strong believer in the power of the marketplace and consumer choice.  The market has a huge influence in the ultimate financing, managing and delivery of health care in this country.

Similarly, I think governmental involvement in health care is essential, but should be minimal… mandate only what is necessary that the market cannot fix on its own.   Since there are issues that the marketplace alone will never solve, for the public interest to be best served, these must be mandated.

Right now we are seeing the short term failure of the implementation of the ACA through the website disaster.  We must  differentiate these implementation issues versus actual policy content in order to objectively assess  health care reform  and its future effect on patients and the delivery system.

Several key issues in health care reform will NEVER be solved in an open and free market.  They need to be mandated:

  •        Health insurance requirement
  •        Elimination of “pre-existing” conditions
  •        Standardized basic health benefits

Thinking logically, insurance will only work if everyone participates. We have learned this through automobile insurance which is mandated in all 50 states.  Everyone has to be in the pool.  It is the nature of insurance that within any given time period, some will benefit and some will pay out.  There is a natural consumer tendency NOT to purchase insurance, especially if that person is young and healthy.  Yet these are the very people that need to purchase the product to help pay for those who need it.  Even if you are healthy, there are certain unforeseen events that can occur— automobile accident, sports injury, cancer, etc.  Since these events cannot be anticipated, the insurance must be purchased upfront.

Thinking back on my personal experience, I have purchased health insurance through various sources for over 30 years.  For 29 of those thirty years, my expenses were only routine care and physicals.  In one of those years I needed open heart surgery-  costs of over $150,000.  How I would have loved to know which year in advance, so that I could have not purchased insurance the other 29 years…. think how much money I could have saved!  Only buy purchasing insurance during all these years could I guarantee my coverage when I needed it.

Bottom line, insurance MUST be mandated to work.  Everyone has to play.  The market will never spontaneously provide services for a consumer that will not pay.

Similarly, the elimination of “Pre-existing” conditions as a qualifier for health care must be eliminated.  But once again, unless all are insured, the risk pool will continuously increase.  So the mandate of insurance is required in order to eliminate the “Pre-existing”.  One cannot occur without the other.

Finally,  once insurance is mandated, there needs to be a pre-determined minimum benefit set in order to establish the required product.  The cost of the insurance is directly proportional to the benefit design.  The market alone cannot establish this baseline.  It has to be mandated. The ACA did mandate a minimum, but in my opinion with far too many benefits.

The key here is to establish which MINIMUM benefits that all Americans must purchase.  I believe this should  cover the disastrous and costly issues that cannot be predicted.  One cannot make the consumer purchase a Mercedes over a Yugo if the consumer’s desire is simply to get to work, and both vehicles satisfy that need.

The main liabilities and cost drivers in health care are catastrophic events.  What needs to be mandated is catastrophic coverage…. say a $ 5,000 deductible.  The consumer can then decide which further additional benefits he/she should purchase.  Meanwhile the huge public liability of the catastrophic costs are insured and the worst off the purchaser would be is $ 5,000.  Over time, the MSAs or similar vehicles can build up this deductible, and be available to the consumer.

Then let the market do the rest….by its own means.

So the ACA did mandate all three.  That is very commendable and good.  The ACA is failing because of suboptimal choices in the specifics– not the mandate per se.  It’s not the Website… although that is an administrative disaster in itself.  By the way, I found out that Google handles over 120 million hits per year…. it’s not the volume, it is the inadequate design of that website, that frankly the market should have developed in the first place.

The solution is that health insurance MUST be mandated through a minimal benefit package that basically just covers catastrophics– whether in the public programs or the private sector.  That would be much more affordable for the consumer.  Incentives NOT to purchase this lower priced product must be prohibitive…. we need to adopt a model more similar to automobile insurance where liability insurance is required, but the individual consumer can choose the specific policy in an open market to best fit his/her needs.

The website fix is a huge pain, but it is short-term.  However the lack of appropriate choices within the mandate guarantees a long term failure.  We don’t need to necessarily through the baby out with the bath water– but we better fix the specifics. Lets keep the good things and fix the rest.

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