The Finch Formerly Known As Gold

23 May 2005

Getting a grip on health care

Bruce White sits on the City Council of Kent, Washington; he's running for Mayor, and he's proposing a new approach to how the city provides health insurance to its employees:

My proposal is to cut the current $1200 per month per employee expenditure in half. Instead of providing a traditional health care plan the city would instead offer a combination of high deductible catastrophic insurance and health savings accounts. A catastrophic plan with a $1500 per year deductible costs about twice a person's age per month for the premium. So, I'll use myself as an example — the city will give me a $600 per month medical benefit. $78 of that will go to pay the monthly premium for the catastrophic plan and the remaining $522 will go into my city-managed health account. Now that's $6264 per year going into MY account that I can use to pay my day-to-day medical expenses.

And what if I don't spend it all throughout the year? I as the employee decide what to do with it. I could keep the money in the account and increase my catastrophic deductible to say, $3000 per year, decreasing the amount of the monthly premium leaving more money per month for my savings account. Or maybe I'd prefer to take $3000 out as a self-awarded Christmas bonus. The employee is able to take total ownership of the cost and benefit level that they feel comfortable with.

$14,400 a year seems a bit high, even for metropolitan Seattle, for comprehensive health insurance, but if they're indeed paying this much in Kent, the White plan would most certainly cut it in half, and it would give individuals a great deal more control over their health-care spending. I expect there will be some opposition, mostly from the sort of folks who would rather cede that control to someone else in exchange for not having to think about it.

The downside, of course, comes if you're one of those people whose regular recurring expenditures exceed the amount of the benefit. Still, it's impossible to come up with an insurance plan that doesn't eventually stick it to someone. (A government-run single-payer plan, of course, ultimately sticks it to everyone.)

(Via Jacqueline Passey.)

Posted at 11:02 AM to Political Science Fiction , TANSTAAFL

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Actually the deductible of the catastrophic plan is less than the amount that goes into employees' HSAs. So everyone is still covered.

Posted by: Jacqueline at 11:06 AM on 23 May 2005

Thanks for the clarification. By force of habit I tend to look for things that might go wrong. :)

Posted by: CGHill at 11:23 AM on 23 May 2005