Step 1: Employee Healthcare Plan Allowance
By Federal mandate, each employer should provide a healthcare plan allowance of a minimum of $300 per month, per employee of all classifications.
Choices in coverage
The employee will then be able to shop on their own for a plan from an independent insurance agency or managed healthcare company. They will make their own choices to spend this money on a plan that fits their needs the best.
Several years ago, when I needed to provide health insurance for my employees, I devised this system. It worked well for me as an employer because it was affordable, I could easily budget for it, and I wasn’t sucked into a contract with an insurance agency for an expensive company-wide-plan which really didn’t cover what everyone needed. I based the amount of the allowance on the entire cost for one sample employee of the oldest age to cover themselves from head to toe at a local HMO, including dental and vision care, and a co-pay of $10 per visit. At the time, this was $240. For a small additional fee of $80, employees could add up to three dependents on their plan, or pick a more expensive plan and pay the difference from their paycheck.
My employees loved feeling empowered to pick their own plan. Insurance agents visited our office and dropped off brochures and set up meetings to discuss options. Everyone was happy.
Most employees opted for a Blue Cross plan which had a percentage co-pay and deductible, but allowed them to go to whatever doctor they chose. However, one ad salesman, whose husband had lost his job and his benefits, instead chose a plan from another company that covered her entire family of four for catastrophic insurance only. Unfortunately, one employee smoked and was not able to get as much coverage with his allowance because his health was at a higher risk, so he went with Group Health, the local HMO. What was not an option was getting the money added to their paychecks, however I did offer to pay an actual medical bill for an employee who forgot to sign up for a plan. In all my years as an employer, I never heard one single complaint that the plan wasn’t working. Everyone loved it.
No Employee Left Behind
Every employee, no matter their status: full time, part time, permanent, temporary, seasonal, or contract should be given this benefit during the months they are employed. A Department of Labor survey in 2004 showed that only 60% of employers offer healthcare of any sort, and only 69% of all employees had access to participating in an employer plan.
While large companies are usually required by varying state laws to provide health insurance of some sort for their full time employees, they are usually not required to provide health insurance for their part-time, temporary, or contract help. In most states, companies with small numbers of employees are not required to provide any health insurance at all. Unfortunately, this mandate leads to less jobs and fewer paid hours as employers purposely cut hours, making employees work 34 hours instead of 35 to 40, just so that they can classify them as part time; or hiring temporary or on-site contract employees instead of permanent ones, all so that they are not required to pay for their health insurance. By requiring all employers to cover every worker, they will be inspired to promote some part time or temporary workers to full time permanent, which will also help to increase employment.
Employers will not be required to pay healthcare for workers they hire who are technically self-employed specialists, even if that worker does not have a business license. For instance, the man who comes and waters your plants once a week would not be considered your employee since he theoretically can hire himself out to water plants for several companies.
Duplication of coverage
Due to legislation and insurance agency contracts, there is a great deal of duplication of coverage, causing prices to be much higher than necessary.
For instance, spouses who both work full-time are usually required to both carry full coverage, usually partially deducted from their pay, even when they work at the same company. This is completely unnecessary and I blame insurance agency company contracts, which require employers to cover everyone, with no exceptions, for this gross overcharging.
The two employers should be able to work with each other to reduce their costs, perhaps splitting the cost of the family coverage between the two, or even allowing the couple to get a better plan for their household by pooling their allowances.
Likewise, if an employee works at more than one part time job where they will receive coverage at each of their jobs, the two or three or so employers should be allowed to split the costs.
Currently, employers must provide on-the-job injury and accident insurance for all employees of all statuses, no matter if they are full time permanent or just working for the day. In some ways, this is a duplication of coverage. The money that is allocated for this type of insurance could be reallocated to basic health insurance.
Is $300 enough?
The more people who are covered, the lower the prices are for everyone.
Most of us are fortunately healthy, and $300 x 12 months is $3600 per year, far more than what is needed to cover the basics.
Clinics can afford to offer low cost healthcare at phenomenally low rates by employing nurse practitioners instead of doctors. I was self-employed for many years and went to two different affordable clinics for basic care. I checked online for the current prices: yearly physical exam with GYN exam ($75 at a clinic), blood and urine test ($20), flu immunization ($12 at a drugstore), and medications (mine are $120 a year for generics). The most expensive cost was teeth cleanings ($160). Eye exams are $40 at a retail store, but I found basic prescription eyeglasses online ($28 with shipping). Other appropriate medical exams and tests would cost more. However, most people could get by with less than $500 in total costs per year. After deducting the $10 per visit co-pay, and having the patient pay for their own medications and eyeglasses (such as with my current plan), the insurance company would only have to pay around $300 for me per year, far less than the $3600 they would collect in premiums. (I should mention, that my current plan costs me nearly $500 per month, which is $6000 per year).
While it is true that pregnancy, catastrophic injuries, and serious illnesses can cost a great deal more to treat, few of us are frequently in need of these extras, so we never spend all of the money we contributed to the plan over the years. The extra money (and there is a lot of it) is supposed to be pooled so that those who need it can receive more coverage, and not supposed to be taken as extra profits by insurance agencies, as is currently done... which will be Part 2.
Duplication of coverage
Due to legislation and insurance agency contracts, there is a great deal of duplication of coverage, causing prices to be much higher than necessary.
For instance, spouses who both work full-time are usually required to both carry full coverage, usually partially deducted from their pay, even when they work at the same company. This is completely unnecessary and I blame insurance agency company contracts, which require employers to cover everyone, with no exceptions, for this gross overcharging.
The two employers should be able to work with each other to reduce their costs, perhaps splitting the cost of the family coverage between the two, or even allowing the couple to get a better plan for their household by pooling their allowances.
Likewise, if an employee works at more than one part time job where they will receive coverage at each of their jobs, the two or three or so employers should be allowed to split the costs.
Currently, employers must provide on-the-job injury and accident insurance for all employees of all statuses, no matter if they are full time permanent or just working for the day. In some ways, this is a duplication of coverage. The money that is allocated for this type of insurance could be reallocated to basic health insurance.
Is $300 enough?
The more people who are covered, the lower the prices are for everyone.
Most of us are fortunately healthy, and $300 x 12 months is $3600 per year, far more than what is needed to cover the basics.
Clinics can afford to offer low cost healthcare at phenomenally low rates by employing nurse practitioners instead of doctors. I was self-employed for many years and went to two different affordable clinics for basic care. I checked online for the current prices: yearly physical exam with GYN exam ($75 at a clinic), blood and urine test ($20), flu immunization ($12 at a drugstore), and medications (mine are $120 a year for generics). The most expensive cost was teeth cleanings ($160). Eye exams are $40 at a retail store, but I found basic prescription eyeglasses online ($28 with shipping). Other appropriate medical exams and tests would cost more. However, most people could get by with less than $500 in total costs per year. After deducting the $10 per visit co-pay, and having the patient pay for their own medications and eyeglasses (such as with my current plan), the insurance company would only have to pay around $300 for me per year, far less than the $3600 they would collect in premiums. (I should mention, that my current plan costs me nearly $500 per month, which is $6000 per year).
While it is true that pregnancy, catastrophic injuries, and serious illnesses can cost a great deal more to treat, few of us are frequently in need of these extras, so we never spend all of the money we contributed to the plan over the years. The extra money (and there is a lot of it) is supposed to be pooled so that those who need it can receive more coverage, and not supposed to be taken as extra profits by insurance agencies, as is currently done... which will be Part 2.
How I Would Fix Healthcare
Step 1 – Employers must provide a minimum $300 health insurance policy allowance for each and every worker.
Step 2 – Insurance agencies may not take more than $40 per policy for profit and administrative costs.
Step 3 – Protect Health Insurance Surplus Coffers
Step 4 – Preventative Healthcare Maintenance Schedule
Step 5 – Improve Healthcare Access
Step 1 – Employers must provide a minimum $300 health insurance policy allowance for each and every worker.
Step 2 – Insurance agencies may not take more than $40 per policy for profit and administrative costs.
Step 3 – Protect Health Insurance Surplus Coffers
Step 4 – Preventative Healthcare Maintenance Schedule
Step 5 – Improve Healthcare Access
A. Institute a “public option”;
B. Regulate rates with blind menu pricing; and/or
C. Provide free clinics and access to community health centers
Stay tuned for steps 6 and 7
