We need a new kind of health insurance

Health insurance has some problems as you may have noticed.  But what can be done?

First, we need to abandon the employer provided health insurance model and give the control back to the consumer.  The consumer has to care about what they are buying and have a range of options from which to choose in order to create a market.  That will drive down the cost and promote much needed innovation.

For Americans to have control over their spending, we need to have our own individual health plans like we do with car insurance and home insurance.  The employer should pay the employees to do a job and the employees should use that money to purchase their insurance.  It’s that simple. The employer based health model in our country puts a huge strain on corporations and takes control away from the consumers who are ultimately paying for it.  It misaligns incentives and removes the transparency needed to create a market.

Next, health insurance should only be used for those expensive things that would otherwise break the bank for the insurance holder.  That is what insurance is for – rare catastrophic events.  Currently, every inexpensive prescription and $75 doctor visit is run through the insurance company.  This adds a bloated, inefficient middle man that drives up the cost and shifts control away from the consumer.  We need a whole new kind of insurance where medical expenses below an amount are excluded which would make them less costly.  We should only call our insurance companies if a tree falls across the living room, our car is rear ended, and we need a major surgery.  The new shingles on our homes, new tires on our cars, and our doctors visits should be our financial responsibility and not run through the insurance machine.

What are your thoughts?