For those of us in the work force, how much are we paying for health insurance? Currently, I pay $486.95 a month, plus $62.05 for dental insurance.
Ridiculous? I'll say. Especially when that covers only me. April's not included. And health care insurance costs are skyrocketing (by 16% a year). We have an emergency on our hands.
So, what to do? I propose an alternative. I know this is long, but stay with me.
How it will work:
Instead of paying insurance, everyone in the US will be required to put a certain percentage (say, 10%) of the money they earn into a savings account (one that makes enough interest to make up for inflation). Each family has a savings account pool for this purpose. The money can only be removed for health-related costs.
The goal would be to get, over time, a certain amount of money into this pool. For each family member under, say, 30, there would need to be a minimum of, say, $5,000 in the account. So April and I would need to put, over time, $10,000 into it. If we have a baby, that amount goes to $15,000. People 30-40 would need $7500 in it, 40-50 $10,000 in it, and so forth.
Once the savings account is filled (so April and I have $10,000 in it), 10% of our income can go instead into some sort of mutual fund (or, if we want, it can continue going into the savings account). It needs to be an approved fund, but April and I decide on how high-risk it is. We can move this money around all we want, and we can put it into our savings account if we wish, but it can only be used for health-care reasons. It's a back-up for the savings account.
If we turn 30, or acquire a new addition to our family, more money is funneled into the savings account until it's at the new minimum. So if I turn 30 and we have a baby, the new minimum would be $17,500 (5000+5000+7500). That seems like a lot...but it's only 10% of our income. Compare that to what we pay for insurance. Meanwhile, the money that's already in the mutual fund stays there if we want it to, but the 10% of what we make goes into the savings account until it's at the new minimum. The only way that money leaves the mutual fund is if we decide to put it into our savings account, or if we need it for a health expense.
Parents are legally responsible for using the money to help their children until their children are no longer dependents. When children become independent (legally), they take $5000 from the family savings account and put it into their new account. Obviously, the family savings account now has lower requirements (by exactly $5000). If the mother and father consent, and there's money to spare in the mutual fund, the child can also take up to $20,000, but not exceeding 20% of the parent's funds, of the mutual fund.
All this, of course, is tax-free. The money can only be spent on health-related expenses, and only on expenses that would be covered by a good health insurance. It will not cover alternative (ie-non-scientific) medicine. It will also not cover your nose-job, etc.
Once both parents die, the money left in their accounts is not given to their posterity. Instead, it is put into a fund that assists the poor and helps them set up their own accounts.
This will not do away with the need for insurance. Depending on how much money you have in savings and in the mutual fund, you may still need to carry a low-cost insurance plan that will help cover serious, expensive diseases.
Benefits of this alternative to insurance:
1. Healthy lifestyles are encouraged. Unhealthy people have higher health care costs...and with this plan, they pay for those costs themselves. Overall health in the United States improves.
2. Health care costs decrease. I asked April a few weeks ago how much she thought a simple blood test costs. She's run the test many times at the hospital, so I figured she'd have an idea. The actual average cost of that blood test is more than ten times the amount she thought it would be (over $200 instead of $20). If we pay for almost all of our health care costs ourselves, approved health care providers will be forced to become more competitive, and we as consumers will want to be more selective about which care we choose. The result? Less expensive services.
The biggest problem here is how we'd transition from our current system to this one.
Oh, and the fact that insurance companies yield a lot of power, and we'd need politicians who don't worship the god of money, and could say no to money coming in from the insurance companies.
If you have any input or recommendations, please comment.
Really, though, I'm tired of paying ridiculous amounts for health insurance, when I never see the benefits and never get the money.