Reviving the Public Option

[Dr Q]

Here is an idea for fixing the ACA. The most immediate problem is rates going up due to "adverse selection". Young and healthy people would rather go without insurance, pay a small penalty, and sign up only if they get sick. This problem does not affect people who have insurance through a large group, like a big employer or the military.  Medicare as an option could solve this problem for individuals and small businesses. It won't require a whole new bureaucracy, and it won't be a burden on the taxpayer.

The option I propose would be fully paid by the people enrolling before the current eligibility age of 65. What we need is to be part of a large group, get the same rates as large corporations, and not pay doctors 2 or 3 times what insurance companies pay. This could be done by simply expanding the current Medicare program. The additional overhead is nothing but processing the additional claims, something Medicare does now very efficiently.

What about adverse selection?  We do need incentives and penalties to get young and healthy people to sign up.  Penalties are unpopular, and will be unfair to people who simply don't have the money to pay the premiums. Instead of penalties for people who don't have insurance, we could offer interest-free loans to people who do, and still need assistance with medical costs. With loans and subsidies together, there will be no excuse for anyone to go without insurance.

What about those who still demand the "freedom" to go without insurance? What do we do when they show up at the emergency room and can't pay for these services? Give them a regular loan, like a student loan, with interest and no escape through bankruptcy. Add a years worth of premiums they didn't pay. The loan can be repaid with surcharges on their taxes.

If we do this right, we could take a huge burden off small businesses, and help the economy of our state.  I love Arizona, but as things stand now, it looks like I will have to move my clinic to New Mexico.  The cost of health insurance here is crushing us.

[Dr Q]

What comes next after the Republican failure to deliver a "better, cheaper, and more universal" healthcare system?  Here is a strong argument that we should have Medicare for all.  Some points that surprised me:

1) Medicare administrative costs are about 2% of total expenditures.

2) That is less than one-sixth of the rate estimated for the private insurance industry.

3) Mutually offsetting expenditures on competitive advertising and other promotional efforts of private insurers can exceed 15 percent of total revenue.

https://www.nytimes.com/2017/03/24/upshot/health-insurance-medicare-obamacare-american-health-care-act.html