Obamacare repeal and replace is going nowhere, despite seven years of promises by Republican members of Congress. For the foreseeable future, it will remain the law of the land, along with rising insurance premiums and deductibles and fewer plans to choose from. It’s worth remembering the next time someone asks you for money to support Republican incumbents.
What if the airline industry could light the runway toward fixing one of the more onerous aspects of Obamacare? United Airlines has done just that. I don’t mean dragging patients out of hospitals and doctors’ offices as United did earlier this year on an airplane—a physician no less. Instead, United now offers a lower cost option for air travel. Let’s apply it to healthcare.
United recently began offering “basic economy” fares, a lower cost option, compared to its “standard economy” fare. Suppose healthcare insurance companies did the same.
Obamacare requires that all insurance plans cover 10 “essential benefits.” Some of these are common sense, including outpatient, hospital and emergency care. Others are beneficial to only some people—pregnancy, maternity and newborn care, mental health and substance-abuse treatment, and pediatric services.
A 60-year-old man doesn’t need or want pregnancy coverage. A middle-aged couple with adult children can pass on pediatric coverage. A teetotaler won’t want alcohol-rehab insurance. But all are forced to purchase this insurance they neither want nor need. That’s like making Coloradans purchase hurricane insurance.
United recognized that not all its passengers want the benefits that go along with the higher-standard economy fare. Instead, they offer travelers the option of a lower cost fare with fewer perks. For example, standard fares earn miles toward premier status on United, whereas basic fares do not. For frequent flyers looking to achieve higher premier status, this may be important. Not so for infrequent travelers or those who typically fly another airline. Why make them pay for it?
Another difference is that the basic fare doesn’t allow passengers to choose their seats or sit with their travel companions, unlike the standard fare. For a short flight, if you don’t care where you sit and are OK with your travel companion sitting in a different row, why not save your money?
The idea is that United is giving passengers a choice, offering an alternative to their more expensive fares, the airline equivalent of “essential benefits.” If passengers don’t want or need expensive perks, why not let them opt out and pay less?
An amendment along these lines was proposed by Sen. Ted Cruz during the recent Senate debate on Obamacare repeal and replace. His idea was that insurance companies could sell pared-down, less expensive plans, as long as they also sold at least one plan that provided all the benefits.
For United, that would mean they could sell basic economy fares if they still sold standard economy, economy-plus and first-class tickets. Common sense.
How absurd that the government should tell a business what it can and cannot sell, forcing consumers to purchase what the government commands. United, instead, is offering a discounted fare with fewer benefits that is better able to meet the needs and pocketbooks of many of its travelers.
This could be a stand-alone piece of legislation. Perhaps along with a law requiring Congress and their staffs to purchase Obamacare plans. A simple way to ameliorate one of the more bothersome aspects of Obamacare. Not the repeal and replace we were promised, but at least some relief for Americans struggling to afford ever more costly Obamacare insurance.
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Saw the “doctor” in your name. Would you be self employed and get to deduct those high premiums as a business expense? Is that high deductible tax free?
What subsidies? I pay high premiums for a high deductible, fat copay insurance plan for my family.
No question that health and disease complexity is beyond our imaginations. The airline model is just an analogy for the idea of choice versus one size fits all solutions.
Overall spending a different issue. This is about individual spending and choice, allowing people tp purchase the insurance they want/need.
This likely does not decrease overall spending. If fewer people pay for maternity care, then those who do need it pay more. It ends up being a wash. Mental healthcare and drug addiction cuts may actually decrease total spending, or they could increase overall spending. The literature here is not so clear. Also, what happens if you guess wrong an need mental health care after all? Who pays? How much? We have had this discussion before where we thought there should be a limit on how much you charge people who couldn’t afford insurance. How about the guy who could have afforded mental health care but decided to forego it to save money? In that case I don’t think he should have any special limits. IOW, you need to address the free rider problem.
Steve
Obviously, the decision processes are well enough definable and predictable, although complex, to standardize travel by an airplane. However, it is an error of substantial dimensions to assume that the decision processes for healthcare are at the same level of precision that exists for airplane travel.
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So far, with the possible exception of identical twinning, each one of the current >7 Billion citizens are genetically different and function with homeostasis and temperament that has been altered by their innate resiliency from life’s disruptive events. The mantra for the health care of each citizen must begin with a strategy to manage its level of uncertainty, community by community. The dimensions for this can not be easily analyzed by our current traditions for solving complex problems with centralized, coercive and bureaucratic government. Remember, it has only been a few years since the Federal government replaced its 1980’s computer system for keeping all the air planes in the sky flying from one city to another.
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The only model that might be instructive for healthcare reform is the Cooperative Extension Service for agriculture created by Congress in “1914” (Smith-Lever Act). Our nation’s agriculture is the most efficient and effective among the OECD nations. Our nation’s healthcare industry is the least efficient and least effective among these same nations. Think about it!.
“Less coverage is good for those who want it.”
Unfortunately health care is not about want, but affordability and need. Where do you get your subsidies doc?
Actually most/all airlines offer a lower cost option. Spirit, Frontier, etc.
When the seats are all booked, take a different flight.
Less coverage is good for those who want it. Want more coverage, your choice.
“Instead, United now offers a lower cost option for air travel. Let’s apply it to healthcare.”
It’s called less coverage. Nothing new. Reducing the number of insured who want a particular coverage means those who need that coverage pay more, like that pregnant women, even though the man contributed to the pregnancy.
Interesting you pick United Airlines – the worst airline in the industry. The con job is the already cramped leg room of “standard economy” is going to even worse comfort of “basic economy”, and telling us what a deal it will be. Who gets to choose when all the “standard economy” is booked?
Not surprised Ted Cruz wants this to “save” premium payers money, given his push to abandon the ACA altogether. How about NO coverage, that’ll be even more affordable.