The state would provide insurance to all Americans but the annual deductible would be equal to 60% of each family’s trailing year adjusted income minus the poverty line income (say $25,000 for a family of 4) + $300.
Why 60%? Because some research by the Democrats has shown tax revenues are maximized at 70%, meaning most people will not hugely cut back at working at up to a 70% marginal tax and the current top rate in some states is about 50% already. I took the mid point between the two at 60%.
So a family of 4 with a trailing year adjusted income of $30,000 would have a deductible of $5,300 * .6 or $3,180.
A family of 4 with a trailing year adjusted income of $80,000 would have a deductible of $33,180.
Middle class and rich people could fill the gap with private supplemental insurance but this should be full taxed. This would encourage the middle class and rich, who are generally capable people, to demand prices from medical providers and might force down costs. They could opt to pay for most health-care out of pocket while the poor often less capable would be protected.
It is not a perfect plan but it might help. Some deregulation of health-care would also help the poor gain access. The gauntlet that Doctors have to run these days to get to practice seems like an anachronism in today’s world. Let smart people get to practice medicine after on the job training. Let the medical businesses decide who is qualified to practice medicine. 12 years of training to tell if my child has an ear infection is overkill and reduces access to health-care for the poor. It appears that medical care could much cheaper than it is, see here.
Another benefit of my plan is that it would encourage capable Americans (the rich and middle class) to be a counter weight politically against the providers.
Also it seems worthwhile to me to maintain flexibility in the system. Our slightly more freedom oriented medical systen looks not so great right now because we spend more than the other developed countries but things are still changing and our more flexibility may start to pay off at some point.
Here are some possible avenues for that flexibility to pay off:
- Direct Primary Care (DPC) also called Concierge Medical Care. I've been reading good things about this recently.
- Medical Tourism groups like the Amish already do some of this already, and maybe surprisingly so do people from countries like the UK with Universal health insurance coverage.
- Dean Baker's idea of allowing foreign providers to come into the USA market.
One, all or none of these things might workout and others not mentioned but it is worth maintaining some level flexibility and freedom.
Here is an article that makes a strong case for a system similar to the one that I propose. His plan suggests a insurance for catastrophic events that cost more than, $50,000 combined with a large health savings account.
In addition since Government provided health insurance is paternalism it should provide insurance that experts would recommend and that means among other things insurance that only pays for care that shows a significant margin of cost benefit. So it should not cover procedures that the UK's NHS does not cover. There would be huge savings there.