The saucer rolls to a stop on the campus of UNAM and out pops a young space traveler. Approaching a group , the stranger addresses them”Hi, I’m Alexis from the planet Intellection. I’ve come here to the health conference to gather information for an inter-galaxy health report.”

The nearest person answers graciously, “Glad to meet you. I’m Jane Philpott, Canadian Minister of Health. What can I help you with?”

Alexis:Tell me about your health care system

Jane: Gladly. We have great system. Single payer Universal Heath Care we’re very proud of. Everyone is well taken care of and happy with it.

Alexis: A Government sponsored closed system with no need to go elsewhere then?

Jane: Well, not quite. It used to be that way but some people got upset with waiting times and having to go to the United States for faster care, so they sued. Now we also have higher cost Private clinics.

Alexis: If they sued maybe some weren’t so happy. So you have a two tier system where the rich can pay to get better service but all the others have to go along with whatever is given?

Jane: Well, only a few wealthy people are out of the system

Alexis turns to another in the group and asks “who are you?” The man Answers,”Hayek Friedman from Imaginarium.”  “What system does your country use” queries Alexis.

Hayek: We use Dave’s Plan.

Alexis: Describe please.

Hayak: Everyone has a Personal Benefits Account (PBA) A minimum of 10%, with a 2017 $28,000 maximum, of  everyone’s income is deposited in the account along with any government support funds for the lower-income. As an incentive Employers can also deposit matching funds . Each account purchases a catastrophic health care policy and the first $10,000 is invested in a government enhanced liquid fund to pay for any medical costs up to where the Catastrophic policy kicks in. Beyond that you invest the rest as you wish to secure a better future.

Alexis: How do they access their funds to pay providers?

Hayek: With the PBA associated credit card.

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Finally after a six-year gestation period, Paul Ryan and the House Republicans have finally given birth to their answer to the Affordable Care Act (ACA).  After going through the Bill we kept hearing Peggy Lee singing “Is that all there is?” The Bill has been derided by the Democrats as “Obama care Lite”, but it’s more Dave’s Plan Lite-very lite. The whole idea of any healthcare plan is to provide decent care at a reasonable price.  The ACA’s rapidly increasing premiums and deductibles, disappearance of policy choices in wide swaths of the country and the diminishing number of providers taking Medicaid are well documented. Just how the Republican Bill does much to fix these problems escape us.

The main cost suppressants in the bill are the ability to buy  basically catastrophic policies across state lines and expansion of Health Savings Accounts (HSA).  Dave’s plan has always had this across state line provision.  In fact we feel you should be able to buy coverage from any financially stable provider at home or abroad. Insurance , drugs or surgery, get the best deal you can nationally or internationally.The more competition the better. The problem is it doesn’t fully address the real insurance killers, pre-exiting conditions and failure to maintain coverage. It provides a  “Patient and State Stability Fund” to subsidize states dealing with high risk patients but unlike Dave’s Plan, falls far short of covering all pre-existing conditions and ultimately eliminating the problem. For instance, people exceeding Medicaid income limits or have an employment change in the future may have become a high risk making the pools and costs are endless. The Republican Plan maintains the ACA’s prohibition of the pre-existing condition exclusion, but allows for up to a  30%  penalty for lapsed coverage. As we have said before, when you force insurers  insure sinking ships it just isn’t real insurance. Just a government & crony capitalist hook-up. With no mandate force the purchase of insurance and this as the only deterrent it is unlikely to lower premiums.  You can avoid paying for 5 or 10 years and then pay only a 30% penalty for your knee replacement. This gives young and healthy even more incentive to stay out than under the ACA. Under Dave’s plan policies initially cover reasonably healthy people. Those that can been handled within their Personal Benefits Account (PBA). The rest go to subsidized high risk pools. Because the policies are universal, individually owned, no lifetime limits and non-cancelable, the pre-existing condition problem in time will cease to exist as they either go on medicare ore or sadly pass away.. As the PBA pays the premiums, there can be no lapse problem. People just don’t realize how expensive it is to insurers to sell a policy and put it on the books only to have it lapse shortly thereafter. In the insurance business these costs often equal or exceed the first year premium. As policies are purchased annually this loss doesn’t exist under Dave’s plan. Because of these differences, one can readily see policies  under Dave’s plan would be much cheaper.

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Donald Trump has declared  Healthcare is Complicated.  Who knew? As the Affordable Care Act (ACA) continues to crumble and Republicans can’t agree on a coherent replacement, a crisis of some sort is in the offing. This is what happens when you ignore health care’s relationship to personal finance and the basic principles of insurance. Suddenly, we are all aware pre-existing conditions is a huge stumbling block. It’s the reef wrecking all the offered solutions. The ACA’s solution was to try to force healthy young people to greatly overpay for health insurance in order to bail out insurance companies forced to insure sinking ships. This violates every principle of insurance.  No wonder the ACA in a death spiral. You’d think the Republicans after eight years would’ve come up with something better, but not these geniuses.  When you have a problem, solve the it without making new and potentially bigger problems. Face up to pre-existing conditions.

Dave’s Plan (series under Dave’s plan to fix the ACA starting in 2014) is the only plan biting the bullet and ultimately eliminating the problem. First of all, covering pre-existing conditions costs money, lots of it.  Expecting young people just starting out in their careers and raising  families to pay for older sick people along with their student loans is let’s face it is insane. The only reason anyone would propose such a noxious solution is the political fact young people don’t vote in the numbers as older people. They forgot people also vote with their dollars and healthy young people didn’t sign up to be screwed under the ACA. Now the political class on both side of the aisle are faced with increasing the penalties on the young if they don’t buy overpriced policies and risking a revolt of the young bringing into question not only the ACA but Social Security and Medicare. They’re burdened with paying for these but they may not be there when they get old.  Millennials are the largest group in our population. Do politicians really want to piss them off and politicize the young? Better to face the problem up front and pay for it directly and eliminate it in the future.

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