Senator Chuck Schumer made some news when he said that you can’t just repeal Obamacare without having chaos. He has made a good point: a replacement plan must first be put in place to allow a gradual transition from the disastrous government oriented program to a patient/doctor focused plan. Here is how it will work.
Trumpcare, as it may soon be called, will begin with creating a new, super Health Savings Account (HSA), that will encompass all the health care needs of the patient.
The HSA will consist of three parts, a local doctor (Direct Primary Care Physician), a large deductible catastrophic health insurance plan and a savings account. The patient picks a local doctor whose practice operates by charging a set monthly fee that includes regular visits, checkups, shots and basic medical tests — with no deductible or co-payment. A typical fee would be approximately $100 per month for an individual with slight additional fees to cover a spouse and children.
Direct Primary Care doctors are the fastest growing practices in health care. Several years ago, there were only 400 such practices but today they number over well over 4,000. The reason they are flourishing is because these offices reduce the cost of operating, allow the doctors to spend their time with patients while increasing their earnings. Obamacare and insurance companies impose a terrible burden of paperwork on doctors, Direct Primary care all but eliminates the paperwork!
When a patient purchases an HSA, the monthly fee is automatically sent to the doctor, eliminating the need to send bills. Likewise, the monthly premium for the high deductible insurance policy is automatically paid to the insurance carrier.
One of the problems with Obamacare is that even when there is coverage, the patient faces a huge deductible, often $6,000 or more before insurance coverage kicks in.
Here is where the savings part of the HSA comes into play. The purpose of the savings account is to accumulate money to cover the cost of the deductible that comes with the insurance policy. For example, if $200 per month is deposited in the savings part of the HSA, $2,400 per year is saved. In less than three years enough money is saved to pay for a $6,000 deductible on a typical insurance policy. Should there not be enough savings at a time when a major-medical procedure is required, an automatic loan provision is triggered to cover the shortage. The loan would be paid off by applying part of future savings account deposits to the loan balance.
The monthly cost for a comprehensive HSA for a middle-aged couple in Florida would be approximately $650, broken down like this; $125 for a Direct Primary Care physician, $345 for the high deductible health insurance policy and $180 for the savings account.
Individuals, couples and families could immediately begin enrolling in HSA’s as soon as enabling legislation is passed that allows a tax deduction for these new plans. Of course, insurance companies would have to file new plans in the various states which would greatly streamline their normal approval processes.
Group HSA plans would be available where employers could contribute a portion of the monthly cost. These plans would be much more affordable to both the worker and the employer than present plans. In addition, workers with low incomes would be eligible to have government subsidies to help pay for their portion of the HSA’s.
Trumpcare would be phased in so eventually most Americans would have an HSA that covers them for routine visits to their local doctor with no copayments for visits, and complete coverage for surgeries without having to pay any out of pocket deductible.
This is the first in a series of articles that outlines how Trumpcare could revolutionize our health care. Next, how to reduce health care costs through the free market.
Dan Weber is president of AMAC (The 1.3 million-member Association of Mature American Citizens).
