03/18/2010 05:12 am ET Updated May 25, 2011

Propose a Better Health Care System and Earn Some Cash

Over the past few months, I have tried to make sense out of our health care crisis. To follow my thought process, please check my previous six postings at the Huffington Post.

I arrived at the conclusion that we need a system built on the concept of life-cycle health risk insurance. The outline is below.

However, I might be wrong, and I am willing to spend $400 of my own money to find it out.

I offer two $100 awards to people who present to me proposals of health care reform that are at least as good as mine is.

I will give $200 to someone who proves to me that the concept of life-cycle health risk insurance makes no sense.

Challenge me. Click for the official rules of this contest

Life-cycle health risk insurance outline

The basics
  • An individual is interested in health care for the length of his or her life, not in yearly health insurance contracts. Hence, any workable solution needs to offer lifespan coverage.
  • An individual is mostly concerned about major health failures. Hence, any workable solution needs to focus on catastrophic coverage.
  • Young and healthy people tend to not buy health insurance. However, without their contributions no health insurance system can work. Hence, a workable solution needs to have provisions such that a majority of young and healthy Americans would buy health insurance of their own free will.
  • Only after addressing the above issues can we implement the free market mechanisms suggested in many proposals presented by opponents of the public option. In particular:
  • Individual ownership of insurance policies. There is no reason that health insurance should be chosen and paid for by an employer.
  • The freedom to buy health insurance across the state borders.
  • Curbing frivolous lawsuits by reforming tort liability laws.
The solution
  • The core of the system should be life-cycle health risk insurance, covering expensive treatments and end-of-life care.
  • This insurance would step in and cover expenses above some predetermined per-year limits, cumulative limits for consecutive years, and cumulative limits over the person's lifetime.
  • This insurance should not be mandatory. However, people buying this insurance should have hefty tax breaks so buying this insurance would be common.
  • For covering minor medical bills, individuals would use the current system of health maintenance plans, Health Savings Accounts, or would pay out of pocket.
  • Poor people would use Medicaid as they do now.
  • Lifespan health risk insurance would accrue cash value. The government would guarantee this value using instruments similar to those used when guaranteeing the safety of bank deposits.
From here to there
  • The health insurance industry needs to be told plainly and boldly that offering life-cycle health risk insurance is the only possible alternative to a government run health care system.
  • Those people who currently have health insurance would, at the contract renewal, have their current policy split into two policies: a non-cancelable lifetime-long health risk insurance, and a yearly health maintenance plan.
  • When signing-up those presently uninsured, insurance companies will face various risks. A one-time adjustment needs to be negotiated into the start-up of this system.
  • Life cycle health insurance plans, in order to operate, need some cash resources that would accumulate gradually, but will be not available at the beginning. Some one-time government assistance might be needed to start this system.
  • A legal venue should be opened for seniors to migrate voluntarily from Medicare to the private insurance plans. Eventually, this should lead to lowering the burden that Medicare puts on the federal budget.
Benefits we will have
  • The main benefit will be in changing the motivations of the health insurance industry: with lifespan coverage, they will make most money by keeping their insured healthy.
  • This new paradigm will invoke many programs promoting a healthy lifestyle and preventative medicine. As people will need to pay directly for these products and services, the health care industry will find the ways to offer these products and services at affordable prices.
  • By definition, life cycle health risk insurance would not stop when a person becomes 65 years old. With a complementary health maintenance plan, it might offer better coverage that from Medicare. The gate should be open for switching from Medicare to the private industry plans.
Problems we will face
  • There always will be neglect and irresponsible individuals opting out of the system. If at the time of their health failure, out of compassion, they would receive the same care as people contributing to the system, then we will encourage more individuals to act irresponsibly.
  • Life-cycle health risk insurance would resolve the hot-button issue of pre-existing conditions. However, being in its essence catastrophic insurance, it would leave as an issue the pay structure for minor chronic illnesses, those that would not trigger life cycle health insurance, but still could be an unbearable burden to a person of moderate means.

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