Mixturism’s Universal Health Care Plan
Most Americans believe that competition is an important force in a free-enterprise
system… that it benefits the consumer by keeping prices down. In theory,
that’s the way it’s supposed to work, but in reality free competition in
many segments of our society does not exist at all. As a case in point,
consider the health care industry, perhaps the most flagrant example of
Competition in this industry has for many years survived in name only.
In particular, health insurance companies have refused to engage in a legitimate,
open and free rivalry with their fellow insurers, preferring instead to
practice a form of collusion, price-fixing. Would-be competing insurance
companies have worked repeatedly and in concert to increase prices, eliminating
the consumer’s option to buy from the lowest cost supplier. For the poor
consumer, the simultaneously price hikes have meant that all suppliers
suddenly became equally more expensive. Insurance companies have succeeded
in supplanting true competition with conspiracy. And the results have been
catastrophic, with the cost of health care rising at an exorbitant three
to four times the rate of inflation. The insurance industry has been successful
in preventing natural competition and the laws of supply and demand from
operating. The end result? Companies enjoy windfall profits by exploiting
consumers who have no choice but to pay the higher prices. Ironically,
health care reform bills have been defeated in part because opponents preyed
on public fears that a government run plan would eradicate competition
in the health care industry. A deceptive ploy indeed, for no competition
ever existed to begin with.
The restoration of genuine competition to the market place is the real
key to keeping health care costs down. But how can that be accomplished?
We propose a plan by which the government and private enterprise would
cooperate to introduce real competition in the market place…competition
that would dissolve the clout that now allows insurance companies to act
in contempt of our economic well-being.
Here is how it would work: The federal government would create a program
that would pay all claims over $10,000. Since statistically, only 4.6%
of all claims exceed this amount, the total cost of this program would
be approximately $44.4 billion per year, a small fraction of the nation’s
total health care bill. What about the other 95.4%? These claims would
be paid by privately insured company-run cooperatives. Because small or
even midsize businesses cannot assume the risk of catastrophic claims running
upwards of a million dollars, self-insured plans are not presently feasible.
Only the huge insurance companies are capable of taking such a hit. But
that all changes when the burden of paying a potential claim exceeding
$10,000 is lifted. With this threat removed by the federal government,
small businesses can feel comfortable that their company plan would be
able to meet the smaller claims of their workers. Employees and employers
alike would contribute a percentage of salaries to an escrow account, and
the funds would be made available to meet the medical expenses of participants.
The moneys could be invested and the earnings used to reduce premium payments.
The benefits of this arrangement to the consumers would be bountiful.
With tens of thousands of businesses now free to self-insure, the monopolistic
grip of insurance companies would finally be broken. No longer would they
be able to ask whatever the traffic would bear. Their stranglehold on this
segment of our system would be shattered. Faced with this challenge to
their survival, they would be forced to offer plans equal to or better
than those conceived by the many self-insuring groups across the country.
True competition would be resurrected and once more it would be permitted
to operate in the best interest of the consumer. Price increases in health
insurance would, most assuredly, be held to a minimum.
Self-insured cooperatives might also wield their newly acquired economic
power with another group…primary care givers. Negotiating for the best
deal, they would pledge their business to the hospital or doctors’ group
which submitted to them the most beneficial cost-effective plan. Thus private
cooperatives would be able to exert pressures on the health care providers
as well, fostering healthy competition within this group to keep prices
For those individuals on Medicaid, for those who would not be covered
by employee-sponsored health care plans, or for the uninsurable, states
would be required to establish group programs similar to those already
adopted in several states. These programs would be financed by diverting
funds now used by the state and federal governments on their health care
programs and by small payments from individuals in the program.
By combining the resources of the state and federal governments with
those of private insurance and employees-sponsored cooperatives, universal
health care coverage truly could become a reality for every citizen. And
we could attain this necessary goal without the creation of another government
bureaucracy, without the socialization of medicine, and without an increase
in taxes. The solution is simple: Provide an atmosphere conducive to authentic
competition by protecting employer cooperatives from rare but ruinous catastrophic
In summary, we can vastly improve the health care delivery system and
lower its cost by mixing the best features of the free-enterprise system
with government assistance…a prime example of mixturism at work.
Mixturism…the rational, ethical, and political philosophy for the
21st century and beyond