FibrillatorD

Or, just start a business whose sole mission is to provide business-plan healthcare to its "employees" - or shareholders (although I still prefer a co-op to a corporation). Just a placeholder.

This way all the up-front costs and risk can be deferred to a preexisting insurance provider, State Farm or whatever. But employees pay a reduced rate right off the bat because the initial role of the business is simply to allow for the purchase of a lump full-coverage employee insurance plan from the mother provider, one for, say 100,000 "employees," or even 1 thousand.

And with a co-op, the consumers and the business are the same body, no middleman is needed to rake profits, even if they work their way back to the shareholders. Of course, this entity could be incorporated, and dividends could be distributed to members, but that would be an unnecessary diversion that completely misses the whole point of creating the entity in the first place: to provide below-market rate healthcare to its members (which is a plenty-good incentive to gather even a thousand people up front).

If the entity is incorporated and profits are reaped, then we'd just be starting a regular old insurance company, with all the same hassles and incentives to deny coverage, high-cost premiums and the like.

Note, an insurance co-op wouldn't need $50 million to buy equipment or to build facilities or anything. Its sole purpose would be to act, as you described earlier, as a pool for its members' collective health risks, but without the incentive to gyp its members.

How does it accomplish this? incentives naturally lie on the member to tidy up his lifestyle, since rates would be dependent on behavioral habbits and vices. Which means that the young healthy 21 year old non-smokers like me who aren't likely to rack up long and spendy hospital and clinic stays would get in for a less than the 50 year old obese chronic smoker, who of course would have an incentive to clean up his act and pay a lower rate. I mean, these kinds of equations (average medical costs per vice x risk associated with age - healthy lifestyle factors, etc) can't be difficult to compute (INTERNET).

Then after the risk is sufficiently diffused across enough members (say, 100k), the entity merely weans itself from the host provider, State Farm, and acts as the direct provider, allowing for it to reduce rates even further, across the board.

JAD_333

If you're going to get your coverage from a regular insurance company why spend extra to insert a layer.

Insurance is less expensive for people who work for big organzations because insurance companies save money by not having to recruit customers 1 by 1 and by not having to pay its agents the normal commission on premiums. Also, the company itself chips in toward the premium, although in reality it reduces salaries and hourly wages it would ordinarily pay its employees. How many times have you heard people say, the salary isn't great, but at least I get health care coverage?

Most health care schemes overlook the real cost of providing group health care. They call for shifting the burden from the insured to doctors, pharmaceutical companies and hospitals. How much will be enough? At what point does it become evident that shifting the burden further will collapse the health care system.

Let's face it, the only way we are going to get everyone in this country covered is if the government pays part of the cost. Things can be done to reduce expenses, such as diverting routine health care from emergency rooms, greater emphasis on preventative medicine, acting quickly to deal with cases that will cost more later if ignored, capping malpractice awards, and acknowledging the benefits, where they exist, in homeopathic and alternative medical practices. A thousand coops with a 1000 administrative arms is not the answer. [/quote]

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FibrillatorD

Aggregate buying power -> lower prices

I agree completely, and indeed administrative costs have historically been higher for co-ops because of the reason you mentioned. As for how companies pay for employee healthcare, I have always been baffled by it. Why don't employers save themselves from dealing with a fair amount of Worker's Comp and allow their employees the opportunity to rake in a few extra dollar every month? This could be done simply: offer to pay a healthy amount per month in health insurance, say $400-500, or enough to cover the typical monthly costs for someone who lives a typically-unhealthy American lifestyle -even if the employer must dip into the salary a bit to pay it. Then just say, "hey, if you stop smoking and drop your weight and do things that will reduce your premium, then you can pocket the y-dollar surplus in your salary. because we're insured through a co-op which is a single-payer system."

That's right, all businesses, large or small simply defer the plans to their employees, allowing them to personalize their coverage and potentially save $$ whilst getting healthy. Good for businesses, good for employees, and there's not a dollar wasted on profits. In fact, premiums under the co-op would likely decrease over time, provided a fair number of people take up the opportunity to make more money. Thus, as members get healthy, they contribute less risk to the pool, and fewer dollars must be expended on medical expenses by the co-op.

Consider: my brother works for a business which pays a full-time personal trainer a 6-figure salary - because that's the market rate. If these guys save even one employee from breaking his back or having a heart attack per every few years, they will have saved the company enough to have justified hiring the trainer. Also, some companies allow employees to trade in sick days for exercise equipment (and not just for any infomercial or Jenny Craig garbage either), full reimbursement - because its a business-friendly move.

All good points, but I don't know if anything like you're suggesting is politically-feasible. Its certainly not a popular notion even on the WAB.

Will be interesting to see what President Obama can get done.

gunnut

If people have to pick and choose their own health insurance and pay out of their own pockets according to their own needs and capabilities, they will take better care of themselves a lot better than to be under free health care.

It's back to the OPM syndrome. It's much easier to spend Other People's Money.

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JAD_333

The deductable feature of most insurance plans tends to discourage people from seeking needless medical care, but once the annual deduction is met, it's
katie-bar-the door, if my wife is any kind of an example. The co-pay method is similarly effective, except I am not sure whether there is an annual limit.

JAD_333

I am not sure whether this country is ready for a national health care program. If and when one is created, it'll probably start off small like social security did in the 1930s. It's not going to happen soon unless people who can't afford insurance or health care make their desires known at the ballot box and the health care industry backs it.