Value-Added Health Insurance

[Hubbs]

So I just kind of played around with this in my head today, and I think it might be a good way to combine the safety net of universal health care with market forces. The first part of the idea would be use the logic of the value-added tax in considering health to be a "value" added to certain goods and services. This would not be to tax, but rather to reward. When a person - we'll call him Jim - signs up for the VAHI program (pronounced like mahi?), he receives a VAHI card. This card will be attached to the credit card system. During the year, whenever Jim pays for anything - cash, check, or credit - he can also ask to have his VAHI card swiped. This adds a certain number of points to Jim's account. It's important to note that every single time the card is swiped, points are added, never subtracted. This is so Jim will swipe it for both healthy and unhealthy activities, and an accurate evaluation of his lifestyle can be made.

So how does that work? Well, through a process that would take a little while to set up and would be ongoing after that, the Department of Health and Human Services would assign a certain point value to as many health-related activities as possible. A pound of carrots would get 5 points. A box of donuts would only get 1 point. A gym membership would get 10 points every month. The registration fee for a marathon would get 30 points. Baconnaise would get 1/100000 of a point. And so on. Retailers would get deductions for all purchases of VAHI point displays (if they chose to buy them, of course). The VAHI card would also function as Jim's insurance card. Every dollar spent on health care, however, would subtract a fraction of a point. It's important to note that adding points is based on health, but subtracting points is based on price.

Every year, all point accounts would be reset to 0, and a certain point total - say 10,000 - would be declared to be everybody's "point line" for that year. If Jim winds up with more than 10,000 points, each point above that mark translates into a dollar that can be deducted from Jim's income tax, but if Jim already wouldn't pay taxes that year before taking this deduction into account, the points roll over, so that Jim is always concerned with saving/earning points even if he's a member of the half of the country that didn't pay any federal income tax this year. If Jim winds up with less than 10,000 points, each point below that mark is a dollar treated as additional income, but if Jim already wouldn't pay taxes that year, the points under 10,000 are treated as negative points and also roll over. Most importantly, to prevent Jim from going broke for something like a heart transplant, every point below zero rolls over to the next year automatically. The cost of the transplant is paid off slowly, over time. Jim can never have less than 0 points for the year. And rather than being charged a small amount by standard insurance to hedge against him needing a transplant, he's only charged if he actually needs one. Paying off more than what he owes for the year is an option, of course. The target of the "point line" is always for the program to run neither a surplus nor a deficit, adjusting after every year accordingly.

In this way, a safety net is created, but at the same time the consumer responds to the price of all health care, rather than arbitrarily paying attention to certain costs and not others when it makes sense in terms of deductibles or co-payments that vary from plan to plan and from state to state. Market forces still apply, and better yet, they apply in all cases. In any non-emergency situation, cost will be considered, but anyone can also opt for the more expensive option if they feel it's the better medical choice. But consumers can also change the cost of their insurance by living healthier, and can even offset unhealthy decisions with healthy ones, rather than simply paying arbitrary sin taxes. And the price effect could be multiplied across the entire system by requiring health care providers to charge customers with regular insurance the same prices as VAHI customers. I also think that the program would have to be completely voluntary and include the ability to opt-out at any time (previous debt would still apply) because if it became too mismanaged, standard insurance would become a better and better choice and more people would move to that. I hope this doesn't all sound like a confusing mess. I'm sure there are plenty of holes to poke. I wasn't trying to set anything in stone as much as present a general idea and see where it goes. (Apologies to Predicto for making a long post. :pfft:)

[Prosperity]

I didn't know you were 23, you're even wordier than I am

weird, but good work

[polywog999]

I like it. The thread is a little dry, though. Like reading 'a brief history of time.'

Hubbs, you're the Steven Hawkings of this board..... light-years ahead of us mortals! Lol!

[Hubbs]

I like it. The thread is a little dry, though. Like reading 'a brief history of time.'

Ouch.

Hubbs, you're the Steven Hawkings of this board..... light-years ahead of us mortals! Lol!

Well, I guess that kind of makes up for it. :pfft:

[techboy]

Hubbs, you're the Steven Hawkings of this board.....

Hawking? Einstein? Newton? Morons!

[PeterMP]

Why assign points for bad things?

It seems like you are encouraging consumption.

Why not just have some (most) things be 0 points?

[Hubbs]

Why assign points for bad things?

It seems like you are encouraging consumption.

Why not just have some (most) things be 0 points?

Because then there's no motivation to use the card for those bad things.

Why does Jim want to swipe his card after buying a box of donuts if he gets 0 points?

[JMS]

So I just kind of played around with this in my head today, and I think it might be a good way to combine the safety net of universal health care with market forces.

Got that far and had to comment. How you can assert that an industry which has enjoyed anti trust exemption and legal colluding for 70 years is affected by "market forces" is beyond me. An industry which is legally protected from competition in all 50 states and in many states takes the form of a monopoly yet you want to call them market driven.....

The question of the healthcare debate isn't between governemnt run healthcare and market driven healthcare. Market driven healthcare hasnt existed in this country in anybodies lifetime., Not that it exists anywhere else in the industrial world either. The debate we face today is over governemnt run healthcare geared towards the benifit of the consumer and government run healthcare geared for the benifit of corporations. The major problem with the latter is the healthcare system is growing so fast it's actually making a free market in other segements of the economy impoosible to run. Healthere is currently 17% of the economy, up from around 5% in 1970. When do you re-organize it? When it reaches 20%, 30% or 50% of the economy? It will bankrupt the governemnt and private industry long before that.

In this way, a safety net is created, but at the same time the consumer responds to the price of all health care, rather than arbitrarily paying attention to certain costs and not others when it makes sense in terms of deductibles or co-payments that vary from plan to plan and from state to state. Market forces still apply, and better yet, they apply in all cases. In any non-emergency situation, cost will be considered, but anyone can also opt for the more expensive option if they feel it's the better medical choice. But consumers can also change the cost of their insurance by living healthier, and can even offset unhealthy decisions with healthy ones,

Several problems with your "plan". First being your central premise. That there is a market at work in healthcare in this country. There isn't. Today, If folks need more services the industry raise healthcare premiums because to many services are being provided and they have to pay for them... OK.. but; If as happenned in 2010, folks don't use enough services; then the industry raise prices because they have more expenses to spread across a smaller population. Coarse, If consumers use the same level of services as the previous year, prices are raised because then expenses went up independant of services provided... Get the picture?. A market devoid of competition doesn't need to react to market pressures in any self restricting way. The answer is always to raise prices in such markets. Which is an accurate reflection of the American healthcare system and 40 years of premium hikes at double or tripple the rate of inflation.

If you introduce competion they call it socialism. If you don't, nothing else you do will matter.

[Thiebear]

Seems okay on the surface:

1. First thing that came to mind: The people that can't afford a 10$ Universal ID card (exuse given) are not going to have a credit card to swipe while buying.

2. (And an accurate evaluation of his lifestyle can be made): Are we going to charge differently for people that do good vs. bad: I'd never swipe for my box of wine and bag of oreos...

[JMS]

I have a better plan...First we develop a faith based one size fits all ideology with the promise to fix all ills in our economy, ( It's best if this ideology can be stated in one sentence or a phrase, Something unquantifiable, like "government bad",.... )... Next we accept a jingoist understanding of the specific problem we face. .Finally we use our over simplified ideology and flawed understanding to craft a solution which will place all the pressure to reform on consumers who are the primary victims of the current financially bloated, overly complex dysfunctional healthcare system. An added bonus would be to make the government the big brother life style policeman for every law abiding citizen. The government can set up computers and track and punish folks who don't subscribe to our idiotic draconian totalitarian healthcare edicts. You decide you want vanilla ice cream instead of Italian ice after your evening meal; You take cream in your coffee instead of non dairy cream substitute. You drink coke instead of diet coke. The government can step in an monetarily penalize you!! Protect the collective from your reckless ways... comrade.

Wait... that is your plan..

And why are you so willing to give the government lifestyle tracking and penalizing powers over our population at a consumer purchase granular level?; Because in the name of "libertarianism", you do not want the government to have regulatory control over the insurance industry! Something it's had and exersized all your life... All the life of your Parents!!!

Better we preserve the insurance industries profits,and your ignorance than our citizens civil rights?. Better we adopt one of the most odious standards of communism rather than allow the government to exercise one of the most basic authorities of capitalism. The power to regulate the market. Brilliant !.

[Thiebear]

for someone that didn't read past the first line you are really stepping all over the topic.

Where did you see faith based?

And are you sure your using Jingoist correctly?

You might want to take a water pill and hit a funnier thread for a while.

[PeterMP]

Because then there's no motivation to use the card for those bad things.

Why does Jim want to swipe his card after buying a box of donuts if he gets 0 points?

Why do you care if he uses his card to buy a box of donuts?

Simply being able to evaluate his life style, if you aren't going to do anything with that information, doesn't seem to be a positive to me.

I can understand not wanting to punish people for bad things because it creates and environment for people to "cheat", but I don't see the value in having Jim use his card for a box of donuts.

[JMS]

for someone that didn't read past the first line you are really stepping all over the topic.

I read the entire piece. I just commented on the first sentense before I moved on to read and comment on the rest.

Where did you see faith based?

Applying Libertarian prinsiples to the American healthcare system is a faith based approach to a solution. Why? Because there is no working model for this approach in the industrialized world and no living American of working age has ever experienced such a system. It's a proposal devoid of real world practicality thus anybody who would propose it is doing so on the basis of faith, rather than demonstrated practical utility.

It's a proposal rooted in beliefs which more accurately relate to prejudices than what passes as economic theory even in entry level study of that science.

And are you sure your using Jingoist correctly?

Given that every country in the industrialized world has Universal coverage something America can only strive for. Given all of these countries are paying a fractionf per capita to what Americans are already paying today for limited coverage; Given that many of these countries offer superior services as judged by the non profit we ourselves set up to study healthcare delivery systems (WHO).... Yes I'm pretty sure I'm using jingoist correctly in describing a home grown Libertarian/Authoratarian/Collective plan for healthcare delivery by people who refuse to look at how the rest of the world is dealing with this common problem.

Jingoistic - colloquially excessive bias in judging one's own country as superior to others – an extreme type of nationalism.

http://en.wikipedia.org/wiki/Jingoistic

[JMS]

Why do you care if he uses his card to buy a box of donuts?

Because donuts are bad for you... Because he wants to put a sin tax on donuts. Heck we tax the heck out of cigarettes; why not ice cream, donuts, candybars, or beer? Why not open all consumer choice up to the behavior police? We'll balance the budget in a week!!

Course the end result won't be a healthier population. The end result will be folks buying their goodies off grid, and political fights among the multi nationals to get their products off the sin list in order for the cattle, which will accurately describe the American consumer, to consume them..... After all that's how we got the four major food groups in the late 1960's. Had nothing to do with healthy eating and had everything to do with the power of the beef and dairy industries.

[Ancalagon the Black]

JMS, I get that you disagree with aspects of Hubbs' proposal here, but you've really gone off the deep end and used this thread as a platform from which to rant.

So far, other than pontificating, you've named one concern with the proposal: that it gives the government too much information on your lifestyle. It's a fair critique, but it's buried under a lot of venom.

Hubbs never claimed that we have a market-driven health-care industry; he wants to try to harness people's personal incentive structures to create a system that covers people while motivating them to make healthier choices. It may not be perfect, but it deserves a bit of respect.

[JMS]

Seriously AtB... Not sure how much of what's going on in the States you get down their in Australia. But I'd say I have pretty good reason to give it to Hubbs and anybody else who suggests the US consumer is at the root of the American healthcare problem. Folks like that just cost us a pretty serious chance to reform the current system. Every decade since I was 4 the United State has tried to reform healthcare. Every decade the special interests fight back, and every decade reform takes the form of surrender. I have good reason to be pissed at 23 year old know it alls who haven't done their homework. Indistructable youngsters who don't realy care about healthcare cause they don't ever plan on using it.

It's too early to tell if Obama care is going to have any impact what so ever. I'm sure it will have a better impact than GW's attempt in 2006, but double zero is still zero.

Anyway suffice it to say I am pissed, pissed a really good chance to reform the current dysfunctional healthcare system slipped through our hands.

JMS, I get that you disagree with aspects of Hubbs' proposal here, but you've really gone off the deep end and used this thread as a platform from which to rant.

Really, which point do you think is off topic. He asked what folks thought of his marxist plan to put the government in charge of incentivizing or penalizing consumer choices in the name of free market healthcare reform and I told him why I thought his plan was really worrysome.

So far, other than pontificating, you've named one concern with the proposal: that it gives the government too much information on your lifestyle. It's a fair critique, but it's buried under a lot of venom.

Actually I think I had a lot more than just one comment about his plan. I went into why his premise was wrong. I went into why his reasoning was wrong. Finally I went into why his proposal wouldn't work. Can't build a castle on a bad foundation.

Hubbs never claimed that we have a market-driven health-care industry;

He never claimed that he was trying to combine "the safety net of Universal coverage with market forces"? Just trying to leave out that peski competition.

he wants to try to harness people's personal incentive structures to create a system that covers people while motivating them to make healthier choices. It may not be perfect, but it deserves a bit of respect.

It really deserves no respect. The solution to our healthcare problem is not for the consumer to give up all his rights and ceed them over to the government. I'm the pinko lefty liberal on this board and even I'm shocked by Hubbs, who's general tendencies run towards the ultra libertarian.

If you are going to propose a solution first you have to state some facts about the problem. Like America already pays twice per capita than the next most expensive healthcare system.... Like every other industrialized country on earth has solved this problem and more than 30 of them offer better services and operate much cheaper than we do. Like if we adopted the French, German or Italian systems out of the box we would cover every person in the United States tommorrow with better coverage than folks with insuance enjoy today, and those with insurance would also see their rates cut in half. That's with expaning coverage and services...

What upsets me so much about Hubbs is he's obviously a smart guy, but he has no bs ometer. He's been sold a bill of goods and now he thinks he can base a solution on that sour sauce. He's got this idea that the American healthcare consumer is to blame for the sorry state of the US healthcare system. Thus the poor sap suffering in the current system must suffer more. Which really irks me.

How about we follow the good idea's which are already proven by countries which tackled this problem sucessfully decades ago and had spectacular results. Oh no we can't do that!!!

Obama care is socialism, but what is being proposed by Hubbs is far worse.... Obama care tries to exert some disipline on the out of control trusts. Hubbs care tries to saddle the consumer with the entire ever expanding healthcare bill, with behavior police no less, and proposes to do so in the name of free markets...

I don't see much in it I like.

[Ancalagon the Black]

Really, which point do you think is off topic. He asked what folks thought of his marxist plan to put the government in charge of incentivizing or penalizing consumer choices in the name of free market healthcare reform and I told him why I thought his plan was really worrysome.

I think that the several paragraphs in which you detail the historical issues with US health care were a bit off topic. I think Hubbs would agree that the current system fails us. Indeed, that's why he's proposing a solution.

Actually I think I had a lot more than just one comment about his plan. I went into why his premise was wrong. I went into why his reasoning was wrong. Finally I went into why his proposal wouldn't work. Can't build a castle on a bad foundation.

I believe that the premise you attacked was that we have an existent market-based system, which I don't think was his premise. Everything afterwards followed from that. (Well, most things.)

He never claimed that he was trying to combine "the safety net of Universal coverage with market forces"? Just trying to leave out that peski competition.

That's exactly what he claimed. He did NOT claim that our existing system is market-based.

It really deserves no respect. The solution to our healthcare problem is not for the consumer to give up all his rights and ceed them over to the government. I'm the pinko lefty liberal on this board and even I'm shocked by Hubbs, who's general tendencies run towards the ultra libertarian.

Let me clarify. Whether or not the SOLUTION Hubbs proposes deserves respect, the thought put into his post and its reasonable tone deserve a respectful rebuttal. You got increasingly sarcastic and vitriolic as the thread progressed.

By the way, I live in Australia. A basic standard of free health care for everyone. Single-payer. Those who wish to purchase private health insurance (so they can go to nicer hospitals and the like) are welcome to do so. The economy doesn't seem to be in shambles, and people aren't hanging out to get sick or injured or anything. So I don't necessarily agree with Hubbs' proposal.

[JMS]

Let me clarify. Whether or not the SOLUTION Hubbs proposes deserves respect, the thought put into his post and its reasonable tone deserve a respectful rebuttal. You got increasingly sarcastic and vitriolic as the thread progressed.

Ok ok you're right.... My bad. I'll work on that. I appologize Hubbs. I did not mean to demean your effort and I probable presented my point poorly to boot. I will try to refrain from cretiquing future posts when I'm in a grumpy mood.

By the way, I live in Australia. A basic standard of free health care for everyone. Single-payer. Those who wish to purchase private health insurance (so they can go to nicer hospitals and the like) are welcome to do so. The economy doesn't seem to be in shambles, and people aren't hanging out to get sick or injured or anything. So I don't necessarily agree with Hubbs' proposal.

Thank you for caling me on it.. You made a convincing point. I must just be grumpy.

[Hubbs]

Seems okay on the surface:

1. First thing that came to mind: The people that can't afford a 10$ Universal ID card (exuse given) are not going to have a credit card to swipe while buying.

2. (And an accurate evaluation of his lifestyle can be made): Are we going to charge differently for people that do good vs. bad: I'd never swipe for my box of wine and bag of oreos...

1. You don't have to use a credit card. The VAHI system would merely be connected to the credit card system. The card wouldn't actually pay for anything except health services.

2. That's why you get points for anything.

Got that far and had to comment. How you can assert that an industry which has enjoyed anti trust exemption and legal colluding for 70 years is affected by "market forces" is beyond me. An industry which is legally protected from competition in all 50 states and in many states takes the form of a monopoly yet you want to call them market driven.....

That's probably why I said that the current system isn't driven by market forces.

The rest of your ranting and raving doesn't even remotely have anything to do with, well, anything at all.

Why do you care if he uses his card to buy a box of donuts?

Simply being able to evaluate his life style, if you aren't going to do anything with that information, doesn't seem to be a positive to me.

I can understand not wanting to punish people for bad things because it creates and environment for people to "cheat", but I don't see the value in having Jim use his card for a box of donuts.

Getting the information is the point.

Applying Libertarian prinsiples to the American healthcare system is a faith based approach to a solution. Why? Because there is no working model for this approach in the industrialized world and no living American of working age has ever experienced such a system. It's a proposal devoid of real world practicality thus anybody who would propose it is doing so on the basis of faith, rather than demonstrated practical utility.

What you fail to grasp if that this proposal is, in fact, an attempt to rectify the differences between pure libertarianism and reality.

But go ahead, keep writing long speeches about why I suffer from the exact opposite problem.

Because donuts are bad for you... Because he wants to put a sin tax on donuts.

Wait, I thought I was being too libertarian. Which is it? Too libertarian, or too nanny state?

I don't want to impose sin taxes at all. This plan is specifically about not imposing sin taxes, because various local governments have been imposing them arbitrarily on all sorts of things. I want to use the fact that people will be motivated to use the card for both good and bad health decisions to reward the good decisions in a voluntary system.

[Hubbs]

It really deserves no respect. The solution to our healthcare problem is not for the consumer to give up all his rights and ceed them over to the government. I'm the pinko lefty liberal on this board and even I'm shocked by Hubbs, who's general tendencies run towards the ultra libertarian.

Apparently I'm the world's first libertarian Marxist.

[Hubbs]

By the way, I live in Australia. A basic standard of free health care for everyone. Single-payer. Those who wish to purchase private health insurance (so they can go to nicer hospitals and the like) are welcome to do so. The economy doesn't seem to be in shambles, and people aren't hanging out to get sick or injured or anything. So I don't necessarily agree with Hubbs' proposal.

Interestingly, I am one of the few libertarians around who thinks that a universal single-payer system would also be better than what we have now, for the same reasons I've outlined here. What we have now has somehow managed to combine the worst of both worlds - the lack of market forces in a government-run system, and the lack of universality in a completely free market. This was my attempt to come up with a plan which reversed both.

[JMS]

Apparently I'm the world's first libertarian Marxist.

I wouldn't be happy about that... I would be examing my ideas...

In previous discussions I've always thought you came across as a conservative, but really a libertarian. Please correct me if I'm wrong.

Which supprised the heck out of me when you wanted to set up the government as the body to penalize folks and reward folks for goood and bad consumer choices.

Does that strike you as libertarian?

To be truthful, Marx went a little further than you. Marx not only wanted the government to be the clearing house of all consumer choices, but Marx also wanted the government to do so by having a monopoly on credit. Hey it was 1848 before computers. Marx probable didn't understand in 2010 we could separate the two roles.

[JMS]

Interestingly, I am one of the few libertarians around who thinks that a universal single-payer system would also be better than what we have now, for the same reasons I've outlined here. What we have now has somehow managed to combine the worst of both worlds - the lack of market forces in a government-run system, and the lack of universality in a completely free market. This was my attempt to come up with a plan which reversed both.

Hubbs, so you do believe the existing US healthcare system is a market driven one? Why do you think that?

[Hubbs]

Hubbs, so you do believe the existing US healthcare system is a market driven one? Why do you think that?

No, I believe the wrong half is market-driven. Prices aren't driven by the market, but costs to health care providers - which are passed on to the consumers who don't respond to market forces because their insurance company is paying - are.

I wouldn't be happy about that... I would be examing my ideas...

In previous discussions I've always thought you came across as a conservative, but really a libertarian. Please correct me if I'm wrong.

I would make that distinction to anyone who said otherwise. I'm a libertarian, not a conservative.

Which supprised the heck out of me when you wanted to set up the government as the body to penalize folks and reward folks for goood and bad consumer choices.

Does that strike you as libertarian?

I set up a voluntary system in which people can choose to be rewarded for healthy decisions rather than pay for traditional insurance if that's the trade-off they want to make. That most certainly is libertarian. Anyone who doesn't want to be part of the VAHI system doesn't have to be.

The only thing the government would impose would be the law tying prices to the VAHI system. And that's nothing more than a law tying prices to the market.

To be truthful, Marx went a little further than you. Marx not only wanted the government to be the clearing house of all consumer choices, but Marx also wanted the government to do so by having a monopoly on credit. Hey it was 1848 before computers. Marx probable didn't understand in 2010 we could separate the two roles.

The government does have a monopoly on credit, because it's able to set the price of credit - interest rates - at whatever it damn well pleases. Ostensibly, the Federal Reserve is independent from the government. In reality, it's not.

[JMS]

No, I believe the wrong half is market-driven. Prices aren't driven by the market, but costs to health care providers - which are passed on to the consumers who don't respond to market forces because their insurance company is paying - are.

Hubbs, if prices are not driven by a market, how can costs to the healthcare provider be? Either their is a market, or there is not. You can't have half a market. If prices are nto driven by a market then they are set by a trust/monopoly. If that's the case then I would argue that's the only thing that matters. In the case of the American healthcare system their are three trusts which control the market. 17% of the US economy.

Insurance Companies, Drug Companies, and the Healthcare provider companies.

I would make that distinction to anyone who said otherwise. I'm a libertarian, not a conservative.

That's definitely the impression I've gotten in previous discussions. Libertarian.

I set up a voluntary system in which people can choose to be rewarded for healthy decisions rather than pay for traditional insurance if that's the trade-off they want to make. That most certainly is libertarian. Anyone who doesn't want to be part of the VAHI system doesn't have to be.

Coarse the premise of your idea was for "Universal coverage", so I did not get your system was some how optional.

Even so for a libertarian to put the government in the center of their solution is odd, none the less. Especially a system where the government is in a position to pass judgment upon the positive or negative choices of consumers.... very distasteful to me.... The sin tax on cigarettes is one thing. But to expand the roll of governemnt to all aspects of consumer choices and arbitraily decide on how that effects the collective is especially so.

The government does have a monopoly on credit, because it's able to set the price of credit - interest rates - at whatever it damn well pleases. Ostensibly, the Federal Reserve is independent from the government. In reality, it's not.

The government does not have a monopoly on credit. The governemnt regulates the credit market, there is a difference. I have a credit card with 8% interest, I have another one with 30% interest. Neither is a government credit card.

As for the federal reserve, it is certainly part of the government. It is a semi autonomous branch of government. One answerable to both the Executive and the Congress.