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Kevin started an interesting discussion that included a thoughtful proposal for the problem of major medical care costs risk mitigation.  You should read that here Buy Combivent Without Prescription, before reading my proposal below.

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  • kevindick

    I don’t see how this solves the problem of the uninsured or the overconsumption of care by the insured.

    In the link Schaef provided, they cite $30B as the cost for “uncompensated care” to hospitals due to uninsured patients. Moreover, they say 2/3 of the uninsured are poor. There is no way your plan will ever recover the cost of their care. This is the problem of the “implicit option” of free catastrophic care.

    Your plan also fails to solve the “deadweight loss” problem of overconsuming medical care. Schaef’s reference puts this at $125-$400B per year. I contend members of most well-funded “collectives” under your plan will exert social pressure to force other people to buy private insurance. But because your plan doesn’t change the structure of this insurance, you still get the overconsumption.

  • http://rafefurst.wordpress.com/ rafefurst

    I don’t think you really understood the implications of the proposal…

    Uninsured: This acts as a mandated/entitled insurance policy for major medical (only). Every citizen pays into it as part of their taxes. You could even fund or supplement it by a sales tax on drugs and medical equipment.

    Overconsumption: Once you have drawn down past your initial lifetime value (let’s say it’s $500K per person), there are two paths: (1) if you have contributed more than your ILV (and there are incentives to do so vs. buying insurance) you are covered; (2) if you have have not yet reached your ILV in terms of contribution, only then does the ECF kick in. But you are on make-up for the rest of your life, as are your Collective members.

    I agree there will always be the free-rider problem, but my claim is that this plan, if the numbers are made right, is better than the current situation or and better than the alternatives that I have seen.

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