Certainly, this [the Oregon Medicaid study] bolsters my belief that health insurance should provide financial protection from catastrophic events, not wrap-around first-dollar coverage. Those who used to read me on The Atlantic may recall that the McArdle Plan for Healthcare involved the government picking up the tab for any medical expenses above 15-20% of income: simple, progressive, and aimed at the actual problem we know health insurance can fix. Unfortunaely, Obamacare made that sort of coverage functionally illegal.
That kind of plan tied to income would be great but it’s unlikely to happen while Obama is President.* What might be possible, though, is to modify Obamacare to permit true catastrophic health insurance. You know, the kind Secretary Sibelius is so clueless about. Perhaps the Republicans could agree to pass something the Democrats and Obama want if and only if the bill to do so includes a modification that adds catastrophic insurance policies as one of the options under Obamacare. Ideally, I’d like to see these with a range of deductibles: $1,000; $5,000; $10,000; $15,000; and so on. That way they would be available to people with a range of incomes.
Presumably the cost for a catastrophic plan would be less than for those that cover doctor’s visits for annual exams, flu shots, dropping a pot lid on your toe (don’t ask), and kids with colds. That might encourage people to purchase catastrophic plans which would increase our sensitivity to the cost of medical care and that, in turn, might actually decrease spending on health care a little.**
* I haven’t found a lot of specifics on the “McArdle Plan for Healthcare” but my impression is that she would set a single percentage to be spent on health care before government coverage kicks in. If I were going to take a serious look at this kind of policy, I’d considered percentage brackets, with those who have less money having to spend a lower percentage of their income before the government steps in - much like the brackets we now have for income tax rates.
** Under this modification to Obamacare, as opposed to the McArdle Plan, the insurance companies would still insulate people from true health care costs. When I get a medical procedure, my insurance company decides how much my provider will be paid. So long as insurance companies continue to do so, the insured will continue to pay less than the true cost - and the uninsured will continue to pay more.
These were the Atlantic posts I found that talk about the “McArdle Plan for Healthcare”. They date from February of 2010.
The Benefits of Health Benefits - This began as a response to an Ezra Klein post. The Klein post has links to a number of other McArdle posts, all of which are interesting.
The Limited Benefits of First Dollar Health Care Coverage- Follow up to previous post.