Clinical Innovations - Six Innovations - Innovation Number Six

Tax Deductible Insurance for Everyone to Extend Coverage--with Strings Attached

Reprinted from Physician Leaders, June 14, and HealthLeaders, July 5

To most, "universal health coverage" is code language for a government-run and subsidized single-payer system emanating out of Washington, DC. That tends to be the mindset of Democratic presidential candidate. But, as shown in Oregon, a liberal West Coast state, where voters rejected the idea of a single-payer state-run system by 71-to-29, and in Massachusetts, the bluest of the blue states, which put in place a system of universal coverage requiring mandatory individual payments and payments by small businesses not currently allowing coverage, there are other ways to skin "universal coverage" cat besides a national government program.

In states as diverse as Illinois, California, Minnesota and Connecticut, governments have found they cannot superimpose a heavily state-subsidized system on the current mix of government subsidized and private care, without bankrupting the state, alienating businesses and raising taxes.

One way of achieving care for all is to level the playing field for all by offering tax-deductible plans for all, providing a set amount of upfront money based on the health status of the healthy and risk-adjusted status of those with disease, having government subsidize the poor, introducing a consumer-driven system overseen by the federal government, and giving consumers the choice, control, and information necessary to make intelligent choice.

Towards this end, a consumer-driven system with universal coverage similar to the system already in place in Switzerland, the U.S Congress and state legislatures could implement a system, where,

1. Everyone buys his or her own insurance, using tax-sheltered income.

2. Government subsidizes those who cannot afford to buy health insurance.

3. Providers are free to bundle care as they see fit and to quote their own prices.

4. Government requires publication of data on the performance of all providers.

5. Prices are risk adjusted.