Why is the American Health Care Act such a dismal failure? According to Steve Bannon, its because the AHCA was "written by insurance companies."
Number crunchers at Health and Human Services have estimated the average American spends $10,345 per year on healthcare. This figure includes the amount paid in premiums to insurance companies. Naturally, there are millions of healthy Americans who don't spend a dime on medical expenses, and this is borne out by figures from the U.S. Census Bureau, who found that the average working-age adult makes 3.9 visits to doctors, nurses or other medical providers per year.
Therefore, in reality, the typical American adult doesn't see much return -- if any -- on their health insurance investment.
Doing away with insurance altogether
That means putting Aetna, Humana and Signa out of business, and replacing health insurance and health savings accounts with a simple, streamlined process that makes tax credits and subsidies a moot point. In other words, what America needs is for the federal government to lend money directly to citizens in the form of a variable interest healthcare loan, with interest rates dependent upon a person's income level -- the less you earn, the lower your interest rate.
Supposing a 20-year-old who earns minimum wage needs a $1,500 appendectomy, the patient would apply for a 5 year loan at a 2% interest rate, thereby being stuck with a monthly healthcare payment of $26.29.
Chances are, the patient will not require another surgery before the loan is paid off. In addition, by serving as a lender, the government makes money from this plan (when's the last time that happened?). After 5 years, the government gets back it's $1,500 plus $77.50 in interest, and the patient receives a nice boost to his credit score.
Now let's look at a more complicated scenario. Let's suppose a 40-year-old who makes $150,000 per year needs heart surgery. Cost of a heart bypass surgery is about $75,000. In this case, the patient takes out a 30 year loan with a 7% interest rate and pays under $500 per month -- considerably less than the monthly premiums many healthy Americans currently pay already.
By 2047, the government will have earned $104,631.67 in interest from that one patient alone.
This plan would also solve the issue of pre-existing conditions, religious objections about contraception, and other issues. Every citizen can finance any procedure he or she wants, plain and simple. From nose jobs to breast implants, hernia repairs to hip replacements, tooth extractions to tattoo removal, the borrower can use their low-interest government healthcare loan any way they like, no questions asked. Borrowers cannot be turned down for any reason, so long as they use their healthcare loan on medical expenses. No credit checks needed.
This would also give people with bad credit an opportunity to repair their credit scores.
Instead of paying $130 for dental work out of pocket, take out a government healthcare loan for six months. If you can't scrounge up $20.10 per month to put towards an investment in your own financial future, then there's something seriously wrong with you. And when all is said and done, Uncle Sam makes seventy cents.
And those dimes and pennies will add up
Americans spend $3 trillion on healthcare, with the bulk of that money going right into the coffers of insurance companies. Under the government healthcare loan plan, the annual interest derived from that $3 trillion -- at a conservative 2% interest rate, would generate $60 billion for the federal government. Without adding anything on to our existing $18.96 trillion national debt, the national debt could be wiped out in a little over six years with the principal and interest derived from just the amount Americans already spend each year on healthcare.
The solution to fixing health insurance is obvious -- just take the insurance part out of it.
