Diary

An approach for the Obamacare replacement

Repeal and Replace.

I believe that this most definitely needs to happen together and it should happen as quickly as possible.

So how do we build something that will pass muster.

Since creating a detailed plan is a huge undertaking, I hope to list a few principles here to how we can make an Obamacare replacement better.

 

Terminology:

PCHSA — Permanent Citizen Health Savings Account

PGHSA — Permanent Guest-worker Health Savings Account

MIN5D — The highest (cost+per-person-deductible) of the five lowest priced individual health plans available within a given state.

CPI — Company Private Investment.  The amount of money that a company would give to their employees.

Health-companion — A designation made akin to a significant other for the purposes, at least, of health insurance.  Spouses would automatically be designated as health-companions for each other. In general, the designation must be reciprocated.  This could be spouses or another significant other (including two adult relatives who are not married (mom/son, etc).

Health Bank — Bank or financial entity whose only business would be the management of HSA accounts.

USHCFA — United States HealthCare Funding Account

Plan basics:

 

CREATION AND ASSIGNMENT OF ACCOUNTS

  1. Create two new types of HSA accounts, one for citizens and one for people working legally in the US on visas.  Call the first one Permanent Citizen HSA and the second one Permanent Guest HSA.  (The word “Permanent” is used to imply that this will continue long-term).
  2. Each citizen will be given a Permanent Citizen HSA account and each current legal guest worker will be given a Permanent Guest HSA account upon completion of the legislation.
  3. Each newborn will be given a Permanent Citizen HSA account upon their birth with their states MIN5D in tact, but will be covered under the mother’s insurance for the remainder of the calendar year.
  4. HSA banks would be created to hold and manage the HSA account float.  The HSA banks would make money by investing the float in approved investments.  The HSA banks would be taxed at a corporate rate and their taxed money would be put into a budget lock box that would help fund the new amounts for the HSAs the following year.

CREATION OF POLICIES TO BE OFFERED

  1. Insurance companies will offer baskets of policies that they feel might appeal to consumers.  Each insurance company must offer at least ten plans and the cost from the top to the bottom plan must be at least two standard deviations from the mean.  Insurance companies would have vast discretion as to what they wanted to include.
  2. The cost for any policy must be identical to all purchasers, regardless of age, health history, sex, or any other factor. No one could be turned down for a policy that was open to any other users although an insurance company could choose to limit the overall number of people that they will accept for each plan. The exception is that a company could offer up to a 10% discount for any health-companion or legal child (under 18 years of age).
  3. Any current policy holder could list up to one other adult as a health-companion. Such person would be able to purchase the same policy as their health-companion, even if that policy, in general, is no longer being offered.
  4.  All policies would be available across state lines.
  5. All policies would be announced by June 1st for the following plan year.
  6. Once announced the federal government would designate the MIN5D for each state.  The MIN5D would be figured by taking the amount of the five lowest priced policies within each state including the cost to purchase and the full individual deductible.
  7. Companies would be free to negotiate other plans that would be open to their employees, but they could not require their employees to sign up for any particular policy.
  8. All policies would include dental checkups and cleaning and one full health screening per year, including gynecological exams.
  9. Individuals could file a waiver that must be renewed year by year to not purchase a health care plan.  In that case, the individual would pay for their healthcare through the use of their PCHSA or PGHSA and other means.
  10. Companies would deposit the full amount of their contribution in September of the pre-plan year.  Employees added since January 1st could optionally be given a pro-rated amount by the company.
  11. Individuals would have until November 1st to choose an account or get a waiver.
  12. Individuals who do not choose an account or a waiver will be assigned in family groups to the healthcare plans that make up the basis for the MIN5D in their state.

FUNDING AND ROLLOVER OF FUNDS USED FOR HSA ACCOUNTS

  1. Companies would need to fund any health-benefits to the PCHSA and PGHSA by September 1st of the prior year.  The amount of this donation plus one-quarter of the employee’s homestate’s MIN5D would be tax deductible for the company. They could take that deduction either in the tax year when the money is deposited into the accounts or roll it over to the following year.  Companies would have to pay the same for each employee regardless of their time of service. Companies would pay the same amount for either a citizen or a permanent guest worker.  They could also set an amount
  2. Individuals or their parents (if individual is under 18) could give an additional amount equal to three times the MIN5d amount into the HSA.
  3. The government would fund any unfunded veterans at two time MIN5D.
  4. All other citizens would be funded by the government at a rate of MIN5D.
  5. No non-citizen would have their PGHSA funded by the government in any amount.  That would be their responsibility or that of their employer.
  6. Five death scenarios:  a) Individual is tagged as CII (see below).  b) Individual is not tagged as CII and is survived by his/her health-companion — 75% of the money would roll over to the competent.  25% would be put back into the USHCFA.  c) Individual is not tagged as CII, does not have a living companion, but does have surviving children.  75% of the remaining money would roll over to the surviving children and the other 25% would be put back into the USHCFA
  7. Upon death, if survived by a “competent” then the entire HSA amount is rolled over to the competent’s account.  If not survived by a competent then HALF the remaining amount is divided up and given to each of the person’s legal adult children.

CHRONIC ILLNESS

  1. Any individual who is injured or becomes ill and passes such a threshold of spending on their medical expenses that the government shall set will be considered to have a CII (Chronic Illness or Injury). Individuals designated CII will be removed from the general HSA system and have 100% of their medical expenses covered.  Individuals could file a waiver and decline this coverage.
  2. Upon death any funds remaining in a CII’s HSA would be forfeited to the government.

PROS/CONS:

  1. Pro: All US citizens are covered.
  2. Pro: Incentivizes insurance companies to come up with flexible options which would lower costs.
  3. Pro: Incentivizes insurance companies to come up with low cost alternatives (to capture the MIN5D market).
  4. Pro: Money is in the hands of the end customer.
  5. Pro: Pro-market forces will gravitate to the market places.
  6. Pro: Maintains the existing conditions doctrine that is liked in Obamacare.  Increases the number of people covered.
  7. Con: Cost to cover all individuals will increase the level of health care.