OK, Maybe markets could better control costs

I’m warming to some of the free market health care ideas. Even if we move towards more government sponsored coverage (which seems politically inevitable) it seems like some of these principles could help to increase competition and push costs down, regardless of who’s paying.

Separate “maintenance” from insurance.

Auto insurance doesn’t cover wiper blades and oil changes, and if it did these would probably cost a lot more than they do (see dealership prices). For the same reason, forcing “health insurance” plans to cover non-urgent office visits and routine procedures (as state laws do), seems like a great way to keep costs up. While it’s obvious that a patient isn’t going to shop around for emergency surgery, they could for a ton of other common procedures. How to define “health maintenance” is a tough question (what about folks who require regular, expensive treatments?), but even an imperfect line drawn might let market forces go to work on both sides.

Untie health insurance from employment

Becoming a state employee, I had a few insurance options, but generally I couldn’t tell you its value, so I have no motivation to find it cheaper nor tailor it to my needs. If I had higher care needs, this would significantly dissuade me from changing employers, even if that would be better for my career/happiness. It makes you wonder how many adults work menial jobs for years because moving on means losing or re-negotiating coverage.

Of course, requiring the renegotiation of every U.S. employment contract? I’m sure someone smart could figure out how to perform this transition.

Allowing purchase of out-of-state plans

If your state law requires your insurance plan to cover procedures you’ll likely never use, you’re going to pay more for it. The fear in removing this requirement is that a race-to-the-bottom would occur, where most people end up insured by the state that allows the least coverage, but that’s only a bad thing in the scenario that “health care” encompasses all health procedures. If federal law set a minimum baseline for covering urgent/emergency care (defining the boundary opposite of “maintenance” care), the “bottom” would be ideal.

At this point making an 180 degree shift toward market-based reform seems unlikely, but if Congress does, it should make a a few concessions:

  • Make tax rates actually progressive.
  • Better measure how well the public is served by the health care system.
  • Members of Congress should forfeit their free care and report the coverage and price of the private plan they choose.

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