I’ve written several articles about universal healthcare and one article about universal no-fault insurance. Quite honestly, I believe that the best way to put these systems into place would be to have them operated through a government agency. Why? Because government agencies do not try to make enormous profits, and because having only one agency makes it a lot easier for the claimant to file a claim and get it accepted.
The difficulty with getting these ideas accepted is that they put private health and accident insurers out of business. They do the same for tort lawyers as there are no more accident and health cases. This makes getting the plan accepted in a capitalist country very difficult. But I think there is a solution.
My solution is to establish a single universal healthcare and no-fault insurance company. That is, a monopoly. The stock in the company would be sold to many of the existing insurance companies, either for cash, or in exchange for their equipment (including internet services and offices throughout the country). This would mean that many of their employees would become employees of the monopoly. If all the stock were not sold to the existing insurance companies, the remaining stock would be sold on the open market or taken by the government.
Although the company would be a monopoly (and could use business systems familiar to the existing insurance companies), it would be regulated by a special government agency. The salaries in the government agency would be similar to salaries in other governmental agencies. Initially, the government would pay the salaries, but as the company became more profitable, it would have to pay the salaries and costs of the agency.
The company would have single health insurance and no-fault accident insurance policy. The policy would be written by the government regulatory agency. Every United States citizen (living anywhere) or legal immigrant (living in the United States) would be insured and pay no fees for coverage.
The policy would cover all medical costs (from illness or accident), property damage, and income losses from any incident. The policy would have a clause which says that if the insurer declines coverage in whole or in part for any reason, the policy holder can sue. Suit would be brought initially before the regulatory governmental agency, which would act as a court. The insurance company cannot recover costs or attorney fees, even if it prevails.
If the policy holder prevails, it gets its costs and attorney fees. It also gets the greater of triple damages or $10,000 (in other words, if it sues for $100 and wins, it gets $10,000. If it sues for $3,500 and wins, it gets $10,500). If the attorney charges fees within guidelines that the regulatory agency gives, the attorney will be paid half his fees by the insurer as the case goes along. If he loses the case, he still gets to keep the money.
In addition to acting as a court, the regulatory agency acts as a mediator and sets procedural rules to make court determinations as inexpensive as possible.
The regulatory agency would also oversee the costs and profits of the insurance company. The salaries of those working for the insurance company would be equivalent to those of government employees with similar jobs. The salaries of the top employees would be no higher than salaries of top government employees. Others costs of operation would be determined by the open market.
The expenses of the insurance company would be paid by the Treasury out of ordinary tax revenue. However, the regulatory agency would do studies to determine if certain parts of the society should be held responsible for accidents and injuries. For example, we know that motor vehicles cause injury and property damage. Tires cause a proportion of such motor vehicle accidents. The regulatory agency would translate that information into a dollar figure, divide it among the motor vehicle manufacturers based on their output, and charge a tax for the benefit of the insurance company. The regulatory would do the same for alcohol producers and other producers of goods and services likely to cause damage and injuries.
Think about today’s insurance on motor vehicles. It is relatively high, because the price includes all the costs of the insurance company and the risks of having to pay out. That cost could be made into a tax on motor vehicles, and every owner would pay it as part of licensing on an annual basis. Or we could eliminate that and place the tax on the manufacturers, who would pass the cost along to car buyers. Or we could split that cost between the manufacturers and ultimate users, knowing that the users would eventually bear all the costs.
Similarly, think about airplane insurance. The company operating the plane pays that, and the cost is passed on to the passengers. The tax for the new form of insurance could likewise be paid by the operator, and it would be passed on to the passenger. But the tax should be lower than current airplane insurance because the overall cost of operating a single insurer should be less. Also, most of the cost of operation would be borne by the general tax. In any event, the tax is a matter of public information, and if an airplane operator thought the tax share for airplanes were too high, the operator could take the issue to the regulatory agency.
I want to point out that with the system I have described here, the private insurers would be out of business, but they could invest in the new company. Similarly, tort attorneys could no longer do their traditional business, but there would be jobs for them in the regulation of the new, single insurance company. And if corruption seemed to be starting up, they would have a very favorable system for suing the new company on behalf of people making claims.
Addendum After writing the foregoing, I started thinking about insurance for dangerous occupations – like racing car drivers and loggers and so on. If there are statistics on injuries and damages in these occupations, then the racing car companies and logging companies should pay more to cover the risks.
There is also the question of life insurance. I think we should have free life insurance of six months salary at the time of death, up to a maximum of perhaps $150,000 a month, so that people relying on that salary won’t suffer. The life insurance should just be paid out of general taxes.
I don’t pretend that the foregoing is a perfect system, but I think it’s a lot better than the one we have.