New Health Insurance Ideas

Just two ideas that I was playing with for health insurance.

1. Complete transformation from group to individual

Why not change the entire market to be an individual purchase…There are obviously some reasons such as adverse selection and group buying power, but I would think those were things where the government could add value.  If individuals selected the health insurance companies and products that they liked, it would create a very different dynamic. 

You could then change the employment paradigm not to a provider of health insurance, but make it more a part of your compensation.  Company A might fund up to $5,000 per year in health insurance while Company B provides up to $7,200 for family coverage.

One of the big benefits of this (beyond making individuals into consumers with power) is that health insurance companies could start to invest in outcomes.  Today, they are hesitant to make long-term investments (i.e., if I do this for 5 years, it will reduce the cost of this individual in 20 years) because their membership turns over.  This is a real issue in my mind.

2. Free insurance for healthy people

There is obviously an issue with funding and hyperbolic discounting, but what if we simply said that people who maintain some set of health standards (BMI btwn 20-25; HDL less than 180; able to run a mile in under 8 minutes) got free health insurance.  Would that make a difference?  I think so.  Companies would be better off – less absenteeism.  The US healthcare costs would drop.

Of course, it would take it’s toll on the providers while being a boom for gyms.  But, it’s hard to find that win-win-win. 

I know there’s a big issue of funding, but I was thinking about some radical ideas of what the money being raised by Gates and Buffet could be used to do and how it could motivate people.