Choice & Responsibility: Designing A Health System Using The 401K Playbook

As the ChangeNow4Health initiative has matured, we have been receiving a plethora of great ideas for transforming the US health system.  Last month, I highlighted an interesting idea focusing on linking health behavior to premiums.  In sum, you pay less if you pursue healthy behaviors. 

Today, I’d like to focus on a well thought out idea for a brand new health system that improves consumer choice while encouraging personal responsibility.   The idea, submitted by Richard A Matthews, focuses on giving people the flexibility to choose how they would like to be covered based on their particular financial and situation.  Here’s the nuts and bolts of his proposal: 

“Each employee would have the following options:
1) opt out of health insurance all together WITH complete and total responsibility for all health care expenses. ALL PROVIDERS would have the right to demand payment up front or a bond before providing any care. Yep - someone could make this choice and bleed to death in the street. And we have to leave them there - much the same as we would/could with those the do not purchase mandated auto insurance.
2) Choose any plan offered by any licensed company in the country - and have premium taken from pay on a post tax basis and remitted by the employer.
3) Default to a Medicare Plan offered by the government - or maybe even by private carriers. There would be a number of plans - lets say 4 to start that offer typical benefits for the various life stages. Something like office visits and generic Rx for single folks under the age of 35, same plan plus maternity for couples. Then offer a plan with extensive OV and Rx for families. Then offer an HDHP for age 50 and over. Use the PPA model - default is automatic based upon age and marital status BUT anyone can trump and select any plan they wish from the Medicare menu.
4) Every employee would be allowed to make a new election annually - or opt out.”

This is a very interesting idea, that frankly appeals to me.  First, it does not mandate that people get insurance (this idea is less appealing to me because currently, insurance is unaffordable for many).  Second, by providing people with the ability to choose a plan from anywhere in the country, it creates a national pool of insured individuals, which is bound to reduce premiums.

However, that’s all I’m going to say about this proposal.  I think it’s a good one that deserves broad discussion.  I’m looking forward to hearing what you think.