Philadelphia Reflections

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

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Lifetime Healthcare and Retirement Accounts (Future HSAs)
New topic 2016-03-23 17:06:36 description

First and Last Years of Life, Health Insurance

Here's an idea which has been bouncing around in my head for several decades. The first year of everybody's life resembles the last year in several unique ways. Everybody has a first and last year of life, but essentially no one pays for his own healthcare during those two years. They are pretty expensive years, amounting to 3% for the birth year and something like twenty percent for the last one, so if these costs were removed from the calculation of health insurance premiums, it would make a substantial relief. So, why don't we invent a kind of health insurance which pays for those two years, relieving the rest of the system of this cost? Paying for it during years of employment would shift the cost to the earning third, from the non-earning two thirds.

This kind of health insurance would have to be retrospective, but the dates alone would make it fairly easy to administer. Someone else would have to pay these costs first, so it's likely this insurance would largely be a new insurance company. It would reimburse another insurance company which could prove it legitimately paid the cost, that the prices were fair, etc. Whether this was a mandatory requirement for people who had this payment responsibility or a function of the government on everybody's behalf -- makes less difference because this health issue is universal, so it might as well be unspecified. On the other hand, if it is made a voluntary liability of people who have payment responsibilities, they would require some proof the whole arrangement is on the up and up.

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Health care can't get more basic than being born or dying. {bottom quote}
Irreducible Minimums.
Insurance executives would seek some way to pay average costs for the whole country since it would simplify their job not to get into the nitty-gritty of itemized charges. That's what has happened with the Affordable Care Act, and it hasn't proved to be acceptable to all parties. They might have to be satisfied with partial steps in that direction, paying hospital bills only, or institutions only, since arguing over the cost of diapers and babysitting might be too contentious. There are, after all, many costs incurred during the first and last years of life which are probably not legitimate health care costs, but under the circumstances would naturally have a sort of medical flavor to them. It thus would seem like a good beginning to have the people who are interested in one side of the business or the other, get together and construct a joint proposal which they consider workable. The people who are likely to be presented with the bill would have slightly different viewpoints, and several proposals might result.

This idea, in somewhat greater detail, might be examined in conjunction with universal Catastrophic health insurance. There would be many overlaps, and practicality might dictate the choice. But when we seem to have got it about right, either one of these choices or possibly some hybrid of both, would likely be a better thing to make into mandatory coverage. Or at least mandatory in the sense it might become illegal to have coverage for less universal, and less urgent coverage -- unless you have one of these more basic coverages, first. Society, whatever it may claim, has almost always proved to be pretty stingy. So, other coverages would have to be depended on to provide the extras and to defend their practicality as insurance. It would seem to be a useful thing, to have one insurer arguing cost, and the other insurance company arguing quality, so that neither one would try to threaten the other with unbearable legal costs as the main pressure.

Originally published: Sunday, August 02, 2015; most-recently modified: Sunday, July 21, 2019