A Market for Health Care Rationing
Here’s the proposal:
- Assign new Medicare enrollees a credit for total benefits capped at, say, $150,000 that would be adjusted for inflation annually. After the credit’s exhausted, they’d be on their own.
- Permit beneficiaries to buy or sell Medicare credits, at whatever [price] that could be negotiated.
- Limit the percentage of one’s credits that could be sold, so that no beneficiary could fritter away all his or her allotment on flat-screen TVs or Caribbean cruises.
Seems very impractical.
This makes sense. It’s like giving everyone a super bowl ticket, but then allowing the owners to buy and sell them.
The idea of defining each Medicare enrollee’s benefits and capping it at a certain level is an interesting concept. It does make sense that no one beneficiary deserves an open-ended benefit at taxpayers expense. If such a system existed, a market for catastrophic conditions would develop and seniors could buy coverage for, say, $1 million for prices that likely aren’t too expensive. By allowing (nearly) unlimited benefits, Medicare virtually ensureds more seniors will have huge medical bills paid for by taxpayers.
Question are we going to deny health care to people who have sold their credits?
Medicare has stopped paying hospitals for preventable infections, never events, etc. Let’s stop paying for preventable diseases, like most Type II diabetes, obesity, lung cancer for smokers, etc. If we’re going to ration, do it in a way that encourages good behavior.
Is a $150,000 cap really sufficient to cover a catastrophic health issue?
Interesting idea on how to control cost, but what about abuse and fraud?
I totally agree with JJ. It makes more sense to ration based on individuals’ choices than punish those with conditions they didn’t give themselves.
I agree with Vicki. You’ve got to have some really strong policies in place for refusing treatment to those that handle it irresponsibly.
@JJ and KG: I’m not so sure about punishing people with diabetes. The fact that such a large percentage of America has the disease speaks volumes about the power of America’s fast food culture. (No one wants to be fat, so it says something about willpower that so many of us are.) My vote goes to repealing farm subsidies and letting corn compete with other veggies. You’d probably see a change in fast food menus that would create changes in society’s overall health.
Someone with average health costs who purchases an HSA qualified policy and then makes the maximum contributions ends up with roughly $150,000 plus at the end of 40 years of working life. Throw $150,000 on top of that and you are within $20,000 to $30,000 of one of the academic estimates of the average US lifetime health care cost.
For the tiny fraction of the population that spends more, there might be insurance. If Medicare went away do you think that insurers would be willing to insure people over 65 if the deductible were, say, $200,000?
Giving everyone $150,000 at age 65 is not workable because health status will ahve already widely varied.
The healthy would try to make lots of money selling their credits to the unhealthy. However, many of the unhealthy would not be able to buy them.
Bad economics, bad politics, bad insurance.
I agree with Devon, but I will also say that allowing Medicare beneficiaries to sell credits is in line with the principle of maximizing liberty.
Medicare beneficiaries are good.
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