“Medicare for All” was presented as an alternative
to replace the ACA (Affordable Care Act), if it is repealed. Now, another plan is proposed.
Healthcare is a commodity. Medical providers;
doctors, hospitals, labs, clinics, imaging centers, etc. sell healing solutions when you are sick or injured. But how much control do you have in making choices in the medical services you receive?
To the extent of freedom of choice offered by your insurance policy or employer’s health plan, you are limited in the selection of providers offered and its schedule of benefits. You can choose your
deductible, co-pays, and some out-of-pocket costs, but as a patient you don’t have much control over the prices charged for the medical procedures covered by the schedule of benefits. Employers,
unions, associations, insurance companies and HMOs usually negotiate the dollar amounts they will pay for medical services provided to their membership. There is such a thing as medical tourism in
which a person obtains medical services for specific procedures from foreign providers-in India or Mexico, for instance. There are websites which collect data on health conditions, treatment outcomes
and compare costs at specific hospitals, which is useful only if you have freedom of choice in selecting among those providers. In general, the prospective patient does not have much control over
their healthcare costs and may like it that way as long as their medical bills get paid and they are “covered” for their healthcare expenses. Now, however, deductibles and co-pays are going up and
increasing the patient’s out-of-pocket costs. Insurance premiums keep going up. Prescription drug costs are going out of sight and not just for “orphan’ diseases. A rapacious pharmaceutical
manufacturer can raise the price on common drugs like insulin and epinephrine pens to gain obscene levels of profit.
The ACA, originally called the Patient Protection
and Affordable Care Act is a complicated law with many moving parts. Tinkering with its provisions, such as removing the funding mechanism in a Congressional budget reconciliation process, is like
pulling a spark plug wire on your vehicle’s engine; the car will not perform efficiently and eventually damage will be done.
So, here is an idea to replace the
At birth, every American citizen is automatically
enrolled in a United States of America government healthcare account (aka the “American Healthcare Account”) with a deposit of 5 million dollars in his or her name. The account is to pay for medical
and dental expenses due to illness or injury, long term care, plus OTC (over the counter) and prescription medications.
Most healthcare expenditures are for the very young
and the elderly for end of life care. In the in-between years there are accidents, chronic diseases and childbirth, etc. But, is 5 million dollars sufficient to pay for a lifetime of benefits which
could exceed a member’s account balance?
Here come the insurance companies to the rescue.
Policies to cover the gap beginning at birth along with inflation riders would be designed by insurance companies. Actuaries have a great deal of experience with paying medical bills and predicting
at what ages they will occur over a person’s lifetime.
American Healthcare Account
1. The healthcare dollars belong to the member to be
used as they wish as long as they are spent according to the terms of the Account. There are no deductibles, co-pays or co-insurance-it is first dollar coverage.
2. Coverage is 24 hour on or off the job. No more
worker’s compensation insurance.
3.The member could obtain medical services from any
Account certified provider in North America. That is, the member could get prescription drugs from Canada and receive long term care in Mexico. It is borderless medicine on the North American
4. Healthcare providers could only be paid for their
services with Account healthcare dollars OR money provided by a third party administrator-like an insurance company or HMO. Money from any other source would be prohibited. No concierge fees or
payments outside of the lawful healthcare dollar system would be permitted.
5. No taxes could be imposed on anything paid with
Account healthcare dollars.
6. The Account would be exempt from creditors and
legal settlements unless related to covered medical benefits.
7. The Account would include a $5,000 final expense
8. The Account would replace private insurance,
Medicaid, Medicare and VA Military benefits.
9. The 5 million dollar maximum benefit would be
free of COLA or cost of living increases for 25 years. So, a person beginning their coverage at age 60 would see no increase in their benefit until after age 85, and a baby born on the day of the
plan’s inception would not see any increase in their Account value until after age 25.
10. The American Healthcare Account would begin
January 01, 2020.
Insurance companies and third party administrators
are expected to design plans to supplement the American Healthcare Account and could feature the following enhanced benefits:
1. A COLA provision to increase the 5 million dollar
maximum lifetime amount by an index selected to track the average North American consumer price index among the Canadian, Mexican and American economies. The cost of living allowance would not be
tied to just the cost inflation of medical healthcare delivery services, but instead a North American CPI would be used.
2. Increase the Account coverage to a higher dollar
amount or unlimited lifetime maximum.
3. Offer third party administration of an
individual’s account much the same as insurance companies currently contract with CMS (Centers for Medicaid and Medicare Services) to provide Medicare Advantage (Part C) plans to Medicare
4. Increase the Account’s base $5,000 death benefit
to a higher amount-10, 25, 50 or 100 thousand dollars.
5. Offer an optional “Discretionary Account”-a side
fund- from $50,000 to $1,000,000 to cover any medical procedures excluded from the government sponsored “Account”. For instance; cosmetic surgery, gender re-assignment, sex surrogacy, genetic
counseling, religious non-traditional medicine rituals and procedures. Benefit upgrades such as optional dental procedures, enhanced long term care coverage improvements, medical amenities-like
hospital private room and private duty nursing. The Discretionary account would permit healthcare dollars to be donated to individuals or organizations based on its accumulated equivalent cash value.
That is, from policy inception, the discretionary fund amount subject to donation would grow from -0- to the fund’s selected maximum over a person’s lifetime. The rate of growth would be determined
by an actuarial calculation based on the Account holder’s age, interest rate credited and on premium paid for fund level selected. The Discretionary fund would become part of the account holder’s tax
6. An optional disability rider to provide support
services and replace earned income lost due to a covered illness or injury.
7. Insurance companies and TPAs would be expected to
design supplemental plans to include a retirement benefit, for instance. Plus, current plans-like executive medical reimbursement benefits could continue to be offered as stand -alone policies or
riders to group life insurance optional benefits.
With $5,000,000 in your American Healthcare
Account you don’t need medical, dental or long term care insurance, Medicare, Medicaid, or military VA benefits. Plus, you will have the option to buy supplemental medigap insurance to cover
exclusions and enhance “Account” benefits from third party administrators eager to participate in the North American healthcare delivery services economy.
The intent of the American Healthcare Account is to
put the medical decision making power in the hands of Americans. When confronted with medical expenses, the question is not “Will my insurance pay and am I covered,”? But, instead, is the cost
reasonable, shall I get another opinion and what are my options? For Americans not wanting to deal with such issues, third party administrators (TPAs) will provide the services you need. TPAs can act
on your behalf to do the following:
1. Be your patient advocate.
2. Search for qualified medical providers and
research medical procedure outcomes, compare costs and risks.
3. A TPA can act as your legal representative to
make healthcare decisions when you are incapacitated and have executed a healthcare and financial responsibility directive.
Those are your healthcare dollars in the Account to
be spent as you see fit for eligible medical, dental, medications and long term care expenses due to a covered illness or injury. The North American continent; Canada, America and Mexico would expand
the marketplace to create a competitive economic environment in which Account certified providers could participate.
Like the proverbial dog that chases and catches the
bus, a new Congress and Presidential administration present an opportunity to take action and design the American Healthcare Account for the beneficial health of its citizens.
Robert M. Coleman-Calif. Insurance License
Copyright Robert M. Coleman 2017