As shown in my last post, monopolies in health care are at the core of the problem we all must deal with. To break up monopolies, there need to be other options in health care for people to choose besides health insurance. Options create competition and competition drives down prices.

Presently, if you do not have insurance you are left incredibly vulnerable. Health care expenses can be astronomical. Health care needs can be detrimental. When combined together, the sum often is unbearable suffering of both body, mind and pocket book. The lack of options puts all of us at a disadvantage.

Because of the lack of options and sadly for the American consumer, it is difficult for a person to get medical insurance at an affordable rate. Here is why:

1. Monopolies in health insurance have allowed prices to climb un-challenged by the market because no true free-market exists
2. Pre-existing condition clauses increase premiums for all and often eliminate badly needed care for those who need it most
3. Price are so high for medical insurance that people cannot afford it if their employer is not subsidizing it
4. There are so few insurance companies to be able to choose from that the lack of competition reduces the need these few companies have to compete for customers. This dearth of choices eliminates all competition for better service at lower prices

In this setup, the consumer has only three choices if they don't have a job or have one that doesn't offer health insurance: pay an incredible amount for an individual insurance policy, purchase a high deductible health plan, or risk going uninsured. Many people take the risk of going uninsured because they simply cannot financially afford their own policy.

This is a failure of the market. We already discussed one change that has to be made. Here are two others:

· Privately Ran Health Care Cooperatives or HealthShares
· The establishment of standards for rates billed to the uninsured vs. the insured

The latter will be discussed in a later post.

What are Health Care Cooperatives or HealthShares?

A health care cooperative is a group of individuals who join together to insure each other's health needs. The cooperative is owned by the members of it. It is similar to that of the Credit Union model. I am not referring to a managed care health care cooperative where the Co-op provides the medical services in addition to the coverage. I am only referring to a cooperative that acts as the insurer. This kind of cooperative would allow for competition in the health care reimbursement market.

One such HealthShare is Altrua (http://www.altruahealthshare.com/)

Here is an introduction to Altrua from their homepage:

“You're probably here because you're looking for affordable health insurance. Would it surprise you to learn the answer to affordable medical benefits may not be health insurance at all?!“Altrua HealthShare is not health insurance. Altrua HealthShare is a nationwide faith based membership of individuals who share in each other's medical needs by bearing the burdens of others.“Because we're not health insurance we can offer our members lower monthly costs than they were paying for health insurance AND provide MORE options and service than they were receiving.“Health sharing began over 30 years ago as a non-profit medical need sharing concept of members caring for one another. And it's becoming more popular every day as a trusted alternative to health insurance.”

You can probably get a feel for the advantages of such a product. Our health care market needs more of these types of options for the American consumer to choose from.

However, through tax code treatment, co-ops are discouraged over health insurance. This discouragement further entrenches the insurance & government monopoly over health care. This entrenchment is what has brought us to the current crossroads.

If we wish to increase competition in health care, we would be wise to learn from some of the things said by the The Heritage foundation:

“If Congress wants to provide Americans access to health co-ops, it would need to make it possible for an institution to combine tax-exempt (non-profit) status with mutual insurance status, something health plans cannot do today. Congress should allow mutual health insurance companies to form based on the credit union model. Under this model, Congress would simply grant non-profit status to mutual insurance companies, justified by the "member benefit" they provide.

“Very likely, with this form of health care arrangement possible, various non-profit memberships and other organizations might link with a health co-op to make coverage available. State farm bureaus or consortia of churches, for instance, could establish such co-op health insurance.

“In addition to these steps, addressing the tax treatment of health plan benefits in the individual tax code would help spur co-ops. If families could receive the same tax relief for joining a co-op--or any other free-standing health plan--as for enrolling in an employer-sponsored plan, there would be new options for the uninsured or underinsured (Footnote 1).”

Further options equals additional competition. Additional competition, as long as the Antitrust exemption has been removed, means additional benefits to the consumer through increased services at lower costs. This will lower health care costs and increase options for the uninsured.

In short, it will help to bring about Freedom and Justice in health care.

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Footnotes

1. http://www.heritage.org/research/healthcare/wm2493.cfm