Could we, the people, set up our own non-profit health insurance company?

[Cleita]

Is it feasible? I, for one spend $256 a month on a Medicare medi-gap insurance plan. Anyone else that has to buy their own insurance for themselves or their employees, could they contribute? If we extended memberships and took all that money that is being spent on health insurance and put it in a pool to provide comprehensive health insurance to the members, could it be done? As a non-profit could we solicit charitable contributions to cover the uninsured like other charities do, for instance St. Jude's Children's Hospital as well as cover those whose diseases are very costly? Although, I have worked in health insurance in various capacities, I don't have a clue as to how to run an insurance company. However, if the right administrators and CEO could be found, and they agree to run this at an administrative cost of less than 5%, would people be interested in buying into it?

I'm really thinking we have to take the bull by the horns and compete with the profit driven health care industry. We will have to get people to buy insurance with us and not them essentially drying up their revenue and hopefully driving them out of business. Am I on to something? Or, should I just take my unicorn and go elsewhere.

[supernova]

1. You mean like a Health care Co-op?

I've often thought about running something similar. Something you could pay into, but would be a 501c3 or whatever statute it is that covers nonprofits who provide services. I lack the financial acumen to see how it would work, but I damn sure could be a forceful advocate.

[Cleita]

2. Yes, a co-op. Something like that.n/t

[lonestarlib]

3. I've wondered about this, too.

It still doesn't address the fundamental problem with U.S. health care: it costs more than it should.

[Cleita]

9. Like most insurance you could establish limits on the amount of

money you are willing to pay for each item and procedure. Doctors would be free to accept or reject the terms, just like they do now. However, the insurer could chose to go to another doctor or if they like that doctor, they could submit the bill to be reimbursed for the amount we agree to pay. It happens today with insurance as well. When you pay your deductible the insurance company only credits you for the amount they feel the health care should cost them. So if you pay $5,000 in a deductible but the insurance company only agrees to $4,000 as their limit that's all you get credit for. However, I feel doctors would come on board if they know that they aren't going to be denied time and again and stiffed by the company because they didn't cross the right "t's".

[harun]

4. I have thought about this as well

You could have the people who put money in to it set the rules for it.

Cost model wouldn't be that difficult. Once you have the rules set, you can project the costs.

[Cleita]

15. Tell me more.

You seem to have some kind of a plan.

[RB TexLa]

5. You have to raise the required capital in the state you want to headquarter in.

Nebraska has the lowest premium tax.

[Cleita]

14. I have no idea how much one would need to start up such a company.

This is where I got the idea of selling memberships to raise capital, but I'm not really a business person.

[mainegreen]

6. Technically I think so. Feasably, probably not.

You would likely get a very high percentage of under or uninsured who have existing conditions. Premiums would by necessity be high, and would prevent low risk people from joining the co-op. This is the same force that drives insurers to not want to cover high risk or pre-existing condition people.
This is why any system that does not either place everyone in one mandatory pool or restrict rates changes to the basic groups of single, single with child, couple and family, as opposed to the current criteria which can be size of company, average age of employees, number of cat lady employees, etc, is doomed to not solve the problem.

[nichomachus]

8. I agree

To be viable, a system has to cover everyone, not just a few. Your system would attract the people who could afford to pay the least and would probably consume more resources.

In addition, the health-care corporations that now run our medical system would simply conspire to crush you. They would negotiate sweetheart deals with insurance companies and charge you the full rate.

I just got a perfect example in the last mail. I had to go in for some tests. The lab billed $677. The negotiated price with the insurance company, which my insurance paid, was $59. (Six hundred seventy seven billed -- fifty nine negotiated rate -- just so you know it's not a typo.) To prevent your co-op from succeeding, the corporate lab (in cahoots with the insurance industry) would charge you the full $677.

[Cleita]

11. Yes, the big insurers conspiring to undermine us would be a big problem and

I suspect the reason this hasn't been tried before.

[Oregone]

7. I don't think its feasible at all.

You got to understand that health care is expensive because there is risk (potential costs) and the constant realization of the potential. It costs money to pay for health care, and hence, its expensive to fund. To cover everyone, you would probably have just as high premiums now (minus 10% to 20% in profits savings). But on the other hand, high risk people who cannot obtain health care elsewhere will flock to you. Their expenses will eat into the non-profit savings.

So, the premiums would probably be similar. And why is this bad? Well, because health insurance premiums are unaffordable to many already and the poor couldn't even afford it. They need to be subsidized by the federal government through progressive taxation in a government run non-profit system. Unless you get grants and charitable donations to subsidize the poor's premiums while paying for high risk clientele, you will go bankrupt sooner than later.

[Cleita]

10. Apparently, if the Baucus plan goes through, there will be government subsidized

insurance for the very poor. At least that's how I read it. It's also why we would solicit charitable contributions to cover those who can't pay into or whose health care would be very expensive. Keeping the premiums lower than what the insurers can charge would be our plan to undermine them and get people to buy our insurance rather than theirs. Seeking non-profit status would enable us to do that.

[Oregone]

12. Id buy in if you could do that...but...

What do I get paid to be the CEO of it? Thats my real questions. :)

[Cleita]

13. No more than the President of the United States gets paid.

I think this should be a rule of CEO pay across the board. I also think there is some kind of statute that limits executive pay for non-profits but I'm not sure.

[Oregone]

16. Yeah, I never heard of that statue.

I know some non-profit CEOs get paid well in the US.


Some socialized corporations (crown corporations) in my province have CEOs that get paid half a million (one guy makes $800K). Thats all not that bad when you consider that some of the companies are real profitable and what their private counterparts would get (but their salaries are publicly funded essentially). I guess that is the price of a functioning mixed economy.

[Lisa0825]

17. Some right wing group did that.

I heard them talking about it on 740 AM KTRH in Houston. I didn't get the name of the group.