Saturday, July 7, 2012

A Decent Proposal – An American Health Alternative

Much has been said about universal healthcare.  In my view, it is clearly in line with the theistic core values upon which this nation was founded.   However, though people insist that healthcare is a fundamental right, it is not listed in our constitutional Bill of Rights.  

The mistaken notion that healthcare is a right comes from the so-called “Economic Bill of Rights,” articulated by President Franklin D. Roosevelt on January 11, 1944.

“ObamaCare” as it is currently constituted, depends on altruism to control costs.  Its major shortcoming is the lack of a mechanism to keep costs down. Healthcare must be tackled not only from the payer side, but also in its management and cost effectiveness to reflect global rates.  In order to do this, we must trim the associated bureaucratic bloat.  “ObamaCare” does not factor in the flaws in human nature, which certainly extend to the individuals who manage and run our healthcare corporations.  If we are honest with ourselves, we will admit that we are not naturally altruistic.  It is much more realistic to harness free market forces where appropriate and to encourage people – and corporations – to do right based on incentives
Without built-in incentives for cost control, what’s stopping “ObamaCare” from becoming another well-intentioned yet inefficient and ineffective budget-busting bloated bureaucracy?  We need look no further than the public school systemthe “War on Drugs,” the federal food stamp program, and other programs to know that our government alone is generally inefficient in caring for its citizens and preventing fraud.

Though I am by no means a healthcare professional, here is my humble proposal to make universal healthcare economically feasible.

  • Each adult would be required to have a Medical Account that would include a government funded health insurance policy covering 100% of medical expenses after a $20,000 annual deductible.  By bargaining with the competing companies, this would probably cost less than $100/month.  Also included in the Medical Account would be a self-funded tax-free Health Savings Account to cover the deductible. 
    • Dependents with no earnings would be covered by the Medical Account(s) of their adult provider(s). 
    • Once the dependent starts earning money, their own account would be set up. 
  • The contribution to the Health Savings Account would be withheld from the individual’s paycheck automatically. 
  • To cover the difference between the Health Savings Account and the $20,000 deductible, a “gap health insurance” policy would be set up.  Individuals would be free to choose their gap insurance from competing companies on a national basis. 
    • The modest premium would be included in the Health Savings Account contribution. 
    • If the Health Savings Account falls below $20,000, a new gap policy would kick in. 
    • The amount of gap insurance and its premium would diminish with the growth of the Health Savings Account and would disappear once the Health Savings Account reaches $20,000. 
    • In the case of unemployment, the contributions to the Health Savings Account would be covered by unemployment insurance. 
  • Once the individual reaches 65, he or she would have the option of rolling over to Medicare advantage while retaining their Health Savings Account. 
  • For those who are self-employed, the existing IRS rules would apply to include the Medical Account. 
  • For those on public assistance and/or Medicaid, the Health Savings Account contribution would be withheld from welfare payments and Medicaid would be restructured to resemble Medicare advantage.  (Our current welfare system as a whole should be restructured and incentivized in order to encourage recipients to move from a culture and lifestyle of poverty to one of self-sufficiency.) 
  • If the individual dies with money in his or her Health Savings Account, it will be transferred to the Health Savings Account(s) of their designated heirs. 

Clearly, this proposal is not comprehensive; it is, rather, an outline of suggested principles intended as a basis for discussion.  Of course it will have to be tweaked so that people will not be forced to participate in a plan that includes morally objectionable medical procedures, etc.

There is at least a two-fold advantage in this proposal.  First, no one would have to carry the financial burden of those who do not pay for emergency room visits, etc.  Second, everyone would have a vested interest in acting as watchdog on their own medical care cost, since the initial payments will come from their Health Savings Account.  For example, it would now make a difference to the in-patient if his or her Tylenol came from the hospital pharmacy at $3.00 per tablet, or from the pharmacy across the street at $3.00 per bottle.

Our culture no longer places great value on the concept of saving, for various reasons.  Some are currently living paycheck to paycheck due to unfortunate circumstances, while others have never learned to save at all and live in a perpetual cycle moving from one financial crisis to another.  For this reason, a Health Savings Account cannot be borrowed against, used as credit or treated as a liquid asset.

Those who abuse the system should be penalized.  Yet individuals who practice preventative wellness (including pre-approved ‘alternative’ care) and corporations that practice cost saving measures while maintaining quality care should be incentivized and rewarded by the government.

I’ve observed that a growing number of doctors no longer accept Medicare alone.  To have access to their services one must have Medicare supplement insurance.  Those who cannot afford this will fall into a bottom tier of healthcare.  Perhaps in the near future, doctor’s offices will sprout signs isaying, “We do not accept ObamaCare alone,” and for this, too, supplemental coverage will be required.

Unless our society takes the flaws in human nature seriously, we will continue to suffer the costly effects of abuses from individuals and institutions.  In my view, “ObamaCare” as we know it will either return us to the two-tiered healthcare system it was supposed to eliminate, or it will drive many physicians out of their practices leaving government care as the sole choice. 
Without taking into account our natural tendency toward depravity, more money will be wasted on both the payer and bureaucratic sides as America’s economic pulse weakens to an inevitable flat-line – with no adequate means for resuscitation.

Dr. Carl Ellis, Jr. is a theological anthropologist and Assistant Professor of Practical Theology at Redeemer Seminary in Dallas, TX. Copyright pending on Health Care Savings Plan. Follow Dr. Ellis on Twitter: @CarlEllisJr


  1. Hey Doc, interesting post. I'm a bit confused on the following though 'Perhaps in the near future, doctor’s offices will sprout signs isaying, “We do not accept ObamaCare alone,” and for this, too, supplemental coverage will be required.'

    as far as I know the ACA does not have the gov't as providing insurance as does Medicare, rather it mandates that all individuals be covered by existing for-profit health insurance providers. If that's the case why would doctors decide to refuse to treat someone who is privately insured?

    1. Good point. However with runaway costs, I can see a situation where doctor’s expenses may climb and the government may have to limit ObamaCare reimbursements. A common sense approach to cost control would make that much less likely.

    2. Hey Carl, I enjoyed your article and thought that it was a balanced treatment of the subject of Healthcare. Here is a point that will have to be explored by the healthcare organizations/ corporations and the government agencies. There needs to be a ceiling set on patient's seeking testing. This by no means directed at those who need testing but the group of people who are given to obsessing about their health. This obsession equates to unnecessary tests, which the patient's expectation is that their insurance will cover it. This group of people tend to be those who are more than able to pay for these diagnostic tests but look to their insurance provider to shoulder the bulk of the cost. This phenomena is, in my opinion, a contributing factor to the astronomical rise in healthcare. In order to dissuade this practice medical practioners and healthcare organizations will have to come to the table about this issue. Understand,my intent is not dissuade a person from seeking medical attention when needed but their must be a dialog with your doctor on a regular basis about what is going on in your body. This needs to honest. This dialog will help to filter out some of the unnecessary concerns which turn into costly and unnecessary actions, i.e. useless testing. Please understand that this observation is made with the intent to curtail wasteful expenditures in the area of medical diagnostics
      Mac Sullivan

  2. thanks Carl, but I still don't think we're on the same page. the ACA does not provide insurance. All of the insurance (except for existing Medicaid and Medicare) is covered by private, for profit companies. In other words, the gov't can't limit ACA reimbursements since there aren't any reimbursements to limit in the first place. Let me give an example. Under the ACA my existing health insurer must now cover my son at the same rate he's now covered until he's 26. Now should the ACA exist when he's 27 he will then have to choose to get his own private insurance or if he chooses not to pay a penalty. However, unless things change he will not have the option to purchase public health insurance since it doesn't exist for most private citizens. Your point would make sense if the ACA included a public option open to all citizens but it does not. True, healthcare cost will rise (due to any number of factors)which will in turn mean that private health insurance companies will more than likely raise their rates so that they can continue to make a profit from their product.
    So to sum up, if doctors do end up charging more for their services it will be billed to private health insurers, not to the gov't since they don't provide insurance to the general populace.