Philadelphia Reflections

The musings of a physician who has served the community for over six decades

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Not Casualty, but Life Insurance

In effect, the HSA concept could also become the basis for a whole-life insurance company, not merely an individual do-it-yourself project. Such a company would pay for health insurance instead of funerals. I'd love to see the whole-life insurance companies adopt the idea, which comes close to imitating their existing business model. Whole-life insurers could manage the money professionally and would create much-needed competition for old-style health insurance companies, now operating on the "use it or lose it" principle. The large amounts of money the savings account approach would generate, almost discredit the idea as exaggerated; we'll, therefore, let the reader do some of the math. Perhaps you do need to dangle astonishing incentives to get people away from the something-for-nothing term-insurance approach which is now threatening to shoot itself in the foot. The full transition is a fifty-year project, but long-term progress usually doesn't seem so long looking back on it, and it gives everybody a chance to claim some credit. Remember, it's only long-term lack of progress you really need to fear.

Proposal 19:At this point, it probably would be wise to add some legislation clarifying the ground rules since several professions would have to cooperate in allowing a new line of business for whole-life insurance, which seems a desirable outcome.
Let's not quibble. It might even be legally or financially possible to adopt one approach, year by year, or the other, spread over a life cycle; and hurry it all up by making it into a mandatory monopoly. But it is inconceivable that half of a whole unwilling country would tolerate a mandatory health system they widely resent. Preferably, it seems possible to implement parts of both approaches voluntarily right now, without major disadvantages except extra cost. You can do that, or you can read the Lifecycle-HSA as just an alternative proposal to consider. The main dream offered here prefers to cut average lifetime health costs in half ($175,000) but might be expanded to full lifetime coverage of $350,000. Or reduced by individual vendors to some more affordable fraction, such as by a reduction of average costs by only a quarter ($85,000) or a tenth ($35,000). To do this requires some legislation, but $35,000 times 300 million population is scarcely trivial. Even Bill Gates isn't worth half of that.

Let us all reason together, shall we?

Originally published: Thursday, July 16, 2015; most-recently modified: Wednesday, May 29, 2019