OK. Well, first, I'll tell you the potential benefits I see.
One thing would be that people would be able to move freely from state to state without having to worry about losing their coverage. That's not a minor thing in our highly mobile society.
Another would be that so-called catastrophic plans, or major medical, would probably become available to consumers where they aren't available now. That's something that might have certain unfortunate side effects, too, but it would largely benefit a lot of younger, healthier people who have less disposable income.
The major problem I see coming up is that the same thing would happen with health insurance that happened with the credit card industry. Companies would migrate to the few states have the most lenient regulation. So they'd be more able find excuses to drop people after they become ill, and would be able to exclude more people who present higher risk.
Health insurance companies in this country are governed by the profit motive. Regulations that force them to cover people who have scary medical histories and/or pre-existing conditions reduce their ability to make profits. Thus, they are unlikely to operate in states that force them to cover those people.
People with moderate to low incomes might disproportionately elect the major medical plans, because they simply don't have the available cash to pay more. But of course, that would mean that such people often wouldn't seek medical attention for small things, since that would mean spending cash. Thus, things like diabetes, cancer, and heart disease wouldn't be diagnosed until they had progressed to the point where all available treatment options were very expensive. That kind of thing helps move the average cost per patient higher, which increases the cost of these kinds of policies.
Higher risk groups of people would either remain uninsured, or would have to be covered by some kind of government plan.
I just think that if the government is going to cover the high risk group, it might as well distribute the risk by covering everyone by expanding Medicare. That will give the government maximum bargaining power with providers and suppliers, including pharmaceutical companies, reducing costs. Since Medicare doesn't have to make a profit, has no marketing costs, and wouldn't have to pay people to find ways not to pay benefits (except for investigating fraud), it has lower overhead than any private insurance company. That's not just a theory, that's a fact. Medicare is an admirably efficient program.
There's no reason to eliminate private insurance altogether. Supplemental plans are currently available to Medicare recipients, and could remain available.
If things happen the way I see them happening in the scenario you've suggested, I believe the insurance companies would have to set their rates for nationally available plans to account for the much higher medical costs in the most populous areas. Averaging everything out, I believe the overall costs would be just about the same. |
