Unlike other nations, the United States has a fairly good private health insurance infrastructure that does a pretty good job of handling claims and pricing risk. What is lacking is a cohesiveness to the system and the current fragmentation with its inefficiencies is causing it to be overly expensive and cumbersome. 

Here are some ideas that I can offer to achieve universal health insurance with minimal government intrusion while still utilizing the current private infrastructure:

1. First every adult citizen in the United States has one "open enrollment" period each year during the month of their birthday. During that "open enrollment" period, they can apply to any health insurance program offerred in their state and cannot be turned away for any reason. If they don't make a choice by the first of the following month, then they are automatically continued in the plan from the previous year. In the first year, if they make no decision, then they are assigned to a plan on a rotating basis. This works well for large multi state company's benefit plans currently operating.

2. If there is a change in "family status" during the year, a new "window" opens for 30 days following the change. This accounts for marriages, divorces, moving to another state, children being added or deleted, children coming "of age" and those new citizens. This "window" allows a change until the month of their annual open enrollment. If this change occurs within 90 days prior to the annual open enrollment, then they have the option to make it effective for the following year. Also a new "30 day window" would open up should anyone's health plan become insolvent, decide to leave the state or if someone left an employer sponsored plan. This system currently works for large employer group plans so there is no reason why it wouldn't work  in a national universal health insurance system.

3. Health plans would have to be standardized so comsumers can make a comparison of plans between different companies. This is already being done in some states and for Medicare supplements It should be regulated by the states like it is currently being done. However, a plan offered in one state MUST be recognized in all other states so if an insured has a claim out of state, it has to be paid as if it occurred in their home state. Prices for a health plan MUST be guaranteed for the entire year that a person has enrolled and can only be increased at the time of the "open enrollment". This would allow people to budget their health expenses for the year. Every plan must offer a 'default' plan covering the minimum necessary medical services including preventative care. If someone fails to choose a plan type, they are placed automatically in the  'default ' plan.

4. Employers can still offer a plan to cover their employees and dependents if they choose. If someone is participating in an employer sponsored plan, they would indicate as such on their open enrollment election and then would be governed by the employer sponsored plan. Should they terminate employment, or should the employer terminate the plan, then they have a 30 day "window" for an open enrollment. This would eliminate the COBRA requirements that burden employers and add an estimated 20% to the cost of group insurance plans.

5. Parents will make the decision for which plan their children may be enrolled. The custodial parent or in a two parent household, the parent whose birthday is earlier in the year would be considered "primary" for children's coverage. Unless there is a divorce, death or other change of custody, that system remains for those children.

6. Establish a theshold for the maximum people should pay for health insurance. This could be as a percentage of Aduusted Gross Income (AGI). Currently the threshold for taking medical expenses as a deduction on an income tax return is 7.5% of AGI. That may be a start - set the initial threshold at 5% where no one should pay more than 5% of AGI for health insurance (the other 2.5% could cover deductibles and co-insurance payments). Anything over that would be subsidized.

7. For those eligible for a premium subsidy, they can make application on a quarterly basis to account in fluctuations of income. Those receiving subsidies would be placed automatically in the 'default' plan so as to not drive up costs further. That offers an incentive to get off a subsidy since if one requires and receives a subsidy for their health insurance, they sacrifice some freedom of choice. People currently on Medicaid would also be automatically placed in a 'default' plan or may have the option of remaining in a Medicaid managed care plan if they choose.

8. Financing the premium subsidy could be done through an employment tax similar to FICA. Employers that sponsor plans for their employees would be able to reduce their "health tax" by what they spend on their employer sponsored plan. Self employed people would be exempt from this "health tax" until their AGI exceeds a certain amount (perhaps $100,000) and could be reduced by the costs they pay for their own health insurance.  Income subject to this 'health  tax' would be reduced  by any  contributions to employer plans or health savings accounts and premiums paid for individual health insurance plans. It wouldn't be very difficult to put another box on the W-2 or add another line to the 1040 income tax form for this.

9. A standardized national health "smart card" would be provided to all Americans. This "smart card" would also enable health providers to instantly verify coverage and be able to access medical information. Smart cards are currently being successfully used in Europe for their health plans. It could be made secure and "hacker proof" and penalties for violating the security should be very stiff to discourage misuse. The computer chip in those "smart cards" could be kept up to date automatically.

10. Finally the government could act as a re-insurer for catastrophic claims. This would allow for coordinated care for those catastrophic claims that make up less than 10% of all claims yet account for over 80% of costs. The threshold for this could be set at $250,000 and above for any individual (or condition) in any one year and $500,000 over their lifetime. This would effectively cap the maximum exposure for any health plan and spread the cost around for those catastrophic claims reducing the cost for everyone. This would ensure that those major claims receive the best and equal treatment. The cost for this re-insurance could be either in the "health tax" or built in to the cost of each health plan or a combination of these.

Standardization of plans and claim forms would eliminate much of the unnecessary paperwork and cost in the current system. In fact it has been estimated that if all claim forms and procedures were standardized for all companies and made electronic, it would reduce the cost of health insurance by more than 20%. As far as the "underwriting" issue and cost; insurance companies would have to revert back to the old fashioned method of "community rating" where their prices were based on the overall cost and experience of the entire geographic region. Health insurance companies used this "community rating" mechanisn until companies began "cherry picking" in the 1970s. Of course a company's own experience would also come into play.  A company that underprices their product to gain market share will quickly lose that when they are forced to increase rates later. Too many health insurance companies do that today, but people lack the freedom to move unless they are in perfect health.

I sincerely believe that such a system could work and be more cost effective over the long run. First, since everyone would have to be covered somewhere, there is no such thing as "uncompensated care" that drives up the cost for those that can pay. Second since the government is acting as the re-insurer for catastrophic claims, they have a vested interest in making sure that the conditions that cause those claims are remedied. This makes sure that everyone is paying their "fair share" and eliminates most "free riders" in the health care system.

Under this program, there would be no need for Medicaid as we have known it. Medicare for those over 65 could remain in place, but those people would have the same options as those under 65 with this new plan. Perhaps over time, this could replace Medicare. At the same time, this makes sure that those health insurance plans remain financially sound and able to pay their obligations. There already exists in most states a guarantee fund that guarantees that claims will be paid should a health insurance company become insolvent.

This system will open up a truly free and comsumer market for healh insurance because individuals would no longer be locked into a plan or company because of health. A company or plan that raised their price too high would lose people just as a company that didn't pay claims promptly. This system also allows for companies to make innovations in plans and options to adjust to changing conditions and markets. It keeps the spirit of healthy competetion that is lacking when there is a completely government run program. The only government involvement would be to administer the "health tax", premium subsidy and enforce the rules. This is hardly a "huge bureaucracy" for health care since health care would still be in private hands.

Initially the  amount of money spent will increase since those uninsured that were not receiving any treatment would now be covered and would get the health care that they were not receiving before being covered. However after a number of years, costs of health care (as well as utilization) would decline since I believe that in order to compete, health insurance companies would be more pro-active in health management and preventative care.

To address the shortage of primary care physicians and encourage doctors to enter primary care (which pays much less than specialists), a government program should be established that the medical education debt for doctors entering or choosing primary care are forgiven. This would be similar to a highly successful program that existed in the 1960s designed to address a teacher shortage. For example for every year a doctor practices in a primary care field, 10% of their medical education debt is forgiven. If that doctor practices in an underserved area (such as a rural area or in some inner cities where poverty levels are high), the percentage of debt forgiven could be increased to 15%.

This idea would eliminate the 'free riders' in the curent system of health insurance since everyone would be paying something toward their health insurance or in taxes to subsidize premiums. Everyone would have some stake in the system pretty much like social security and by covering everyone, eventually the overall health of this country would improve as health plans and the government become more involved in the health of individuals.