Mechanics

How can we possibly take on all the pre-existing conditions in the country when just those under Obamacare are so costly under the Republican State pools alternative?  After all, Dave’s Plan covers virtually everyone  including the far more numerous covered under employer plans.  Won’t this explode the number with pre-existing making the plan unaffordable? This would be the case if everyone now with employer-provided insurance suddenly lost it and had to apply individually, but there is no reason for this to be the case.  These plans for the most part consist of the broad universe of health that insurance companies need to offer affordable insurance. We know that because they’re doing it now. These insurance companies whether directly or as administrators of employers self-insured plans know and accept these groups now.  Given the chance to sign up plan members as a group would give them the healthy to sick ratio they have already have. These are people healthy enough to work regular jobs.  Further signing the group would save them large acquisition costs while contributing to the wide base the company needs for true experience.

It may be in the insurance companies interest to do group transfers to their individual policies, but why would the employers facilitate the move?  Management of entities now offering health insurance tends to be older than the overall group. Being older they would be more likely to have more health problems.  They wouldn’t want to now get insurance on their own.  Better to have our XYZ Company plan move in mass to our an insurance company’s individual plans. Self interest is a mighty motivator. In any case employers will have to facilitate the move from  company savings plans to individual accounts so this would go right along with those transfers. In any case, the prospects of a much lower corporate tax, makes employer-provided insurance less attractive. This at a time when more companies need a fluid labor force.

Of course, their present insurance company may not offer an acceptable policies.  Nothing would preclude companies from soliciting  bids from other insurers just as they do now. The present insurer would have the advantage of knowing the company’s past experience, but they still would have to be competitive. Still, some employers possibly smaller ones may have some problems with the transfer. Remember, the first $10,000 in every Personal Benefits Account (PBA) would be invested with a Government sponsored entity. With this huge resource, it would function as sort of banker’s bank using prudent cash management for unused balances. The entity would have two purposes, provide for the phasing out of pre-existings conditions and to smooth out payments to cover overdrafts in the PBAs.  Obviously, it would be in its best interest to help facilitate the transfer from employer plans en mass to individual policies. Combining smaller entities to get better options could be somewhat more expensive but our “banker’s bank” could cover any extra one time expense in order to grease the move. The big thing is to get everyone covered individually under no limit no cancel policies. In light of this fact, money spent to facilitate the move from employer to individual plans would be one time cost and prove to be cheap in the long-term.

In the same vein, some have questioned the “banker’s bank” subsidy of state high risk pools for pre-existing conditions. Why is our proposal different from the Republican Plan? Under our plan the  number of people  needing help would fade away over time.  Under the Republicans it could go on forever. The need for subsidy would be greatest in the first couple of years and then diminish as people go on medicare or unfortunately die. As pre-existing conditions are heavily concentrated between ages 50 to 65 the need would decline annually and ultimately disappear.  The job for us is to provide these people with care commensurate with people with insurance at the best price.  One way to do this might be to cover the lowest cost state’s subsidy 100%, those within 5% of the lowest state 95%, 10% at 90% and so on.  This should provide quality care at a competitive cost as all states would be incentivized to mirror the lowest cost states.

Those that say Dave’s Plan would be impossible to implement are just wrong.  In fact, it is just the opposite. Because it is in the interest of all the players, they would work together to get the plan up and running. Insurers could get back to real insurance based on real tables. Providers would be on cash basis for most transactions with little or no credit risk. Let the innovation begin. Employers would be on level playing field while shedding their benefits departments.  All individuals  would be covered. No more bankruptcies due to catastrophic illness. No more “we don’t take your coverage”. It’s your insurance, it goes with you and everyone will want your business. Best of all the plan gets stronger with each passing year. Pre-existing conditions would become a thing of the past and credit worthiness would be stronger with each passing day. What is impossible is continuing down the paths laid out by the Democrats and Depublicans.

 

 

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