To the Editor:
I definitely would like to see a program in place to help low income citizens purchase medical insurance. Here is a basic outline that I believe should be followed to design an effective system for providing medical insurance to low income citizens.
1. Eliminate the exchanges – underwriting principles indicate they are doomed to failure. Not enough healthy folks are enrolling to spread out the risk to the insurers. Replace by allowing the eligibles to shop the existing market for a plan that meets their needs. This should spread the risk and minimize future premium increases.
2. Set up a premium subsidy system based on a person’s income. The eligible person who wanted subsidy assistance would file a special form with their application for insurance. The insurer would contact a federal clearinghouse to confirm how much subsidy is available to the applicant. There would be a cap on the premium subsidy available at each income level. Once the policy is in place, the federal government would be responsible for directly reimbursing the insurer for the subsidy premium.
3. Keep the taxes simple. Obamacare has a myriad of taxes and rules. Some of these tend to cause the replacement of full-time jobs with part-time jobs. There was even a “Cadillac Tax” which imposed taxes on an employer, if it was determined the medical plan offered to employees was too rich. Create a new payroll tax only on employees to fund the premium subsidy.
4. State Medicaid responsibilities can be reduced if we are able to move more citizens from Medicaid to a premium subsidy arrangement. I’m not sure what the appropriate income threshold would be, but perhaps a greater reliance on actuaries and underwriters rather than politicians will allow for a better solution.