Is "Obamacare" really the best idea? Thoughts on my idea? [View all]

[Black and Gold]

Currently, the government allows employers to provide health insurance to employees on a tax-free basis. Therefore, employees prefer to be compensated in health insurance rather than wages because otherwise they would have to pay taxes on the money. So there is a built in preference for insurance. The result from that is an over-utilization of health insurance in the United States. This is one of the reasons that insurance and healthcare in general is so expensive.

People use insurance for things they shouldn't be using it for. In general, a person should use insurance for low-probability but high-cost things such as cancer or getting hit by a car. A person should not be using insurance for things such as spraining your ankle or getting the flu. This is routine medical care that people should have ample savings to pay for if the tax code did not favor insurance over cash.

Now we have a whole system where health insurance is coming from an employer. So if you lose your job, you lose your health insurance. It would be better if individuals were able to buy their own health insurance and take it with them regardless of where they happen to work. That would happen if the tax code is changed.

Plus, when an employer is buying the health insurance, they aren't as concerned about the cost because they aren't actually spending their money. They are spending their employee's money. They pass the buck on to the employee. So if an employee offers health insurance, they are taking it out of the wages that they would have paid you if they weren't paying you health insurance.

If insurance was taken out of the employment process, not only would insurance be a lot cheaper, but medical procedures would be a lot cheaper and people would not be over-using the healthcare system because they would perceive a cost. People would then be shopping around to get the best prices they can. This will introduce competition back in to healthcare, and prices will continue to come down over time. Look at areas of medicine that fall outside of insurance coverage, such as Lasik eye surgery. The costs have continued to come down because people have to shop around for the best prices because they are paying out-of-pocket. There is competition, and that is something that is desperately needed in healthcare.

Another way to bring insurance costs down is to allow insurance to be purchased over state lines. This is currently illegal, but it would increase competition even more, which leads to lower prices due to more companies looking to win your business.

Then there are those 46 million Americans who are uninsured. 1/3 of those make more than $50,000 per year and choose not to purchase health insurance, probably because of cost. Health-savings accounts would be a good idea for those Americans, and a change in the tax code would help with that. Another 1/3 are eligible for medicaid, but have not taken advantage of that for whatever reason.

So there are a few things that would make both healthcare costs and insurance costs cheaper for everybody by introducing market forces back into the system. I feel like "Obamacare" is going in the wrong direction and actually exacerbating the problem in the industry.

Thoughts? Constructive criticism?