A Time for Tontines

[groovedaddy]

MANY young Americans don’t have health insurance, and not necessarily because they can’t afford it. Some just don’t want to invest good money in health care that they may never need. This creates tremendous burdens for the individuals who do end up having medical problems, as well as for the taxpayers who cover their visits to the emergency room. Around a third of all uninsured adults below retirement age in the United States are 19 to 29 years old. How can we get insurance to reach these young “invincibles”?

Creating universal health insurance or forcing businesses to insure their employees’ grown children are costly solutions. Much better would be to design a product that these young invincibles would be willing to pay for. We suggest an old solution: the tontine, which is health insurance that pays a cash bonus to those who are ultimately right in their belief that they did not really need insurance.

Here’s how it would work. In the simplest arrangement, insurance companies would award the bonus to policy holders whose health care costs were below a certain level over five years, excluding preventive care. The program must be designed so that participants don’t forgo truly needed care in order to stay eligible for the bonus. If a participant fell ill during a five-year period, for example, they could still lock in a bonus for the years in which they were healthy. There could be very low co-payments for office visits and tests, and participants might have to follow their doctor’s advice to remain eligible for the bonus.

Sadly, this kind of insurance isn’t on the table, due to the failure of tontine life insurance in the late 19th century (“tontine,” by the way, derives from the name of the Italian banker who invented the system). Tontine life insurance paid a deferred dividend to policy holders who survived and faithfully paid their insurance premiums for a defined period, usually 20 years.

http://www.nytimes.com/2009/03/09/opinion/09baker.html?th&emc=th

[Bonhomme Richard]

1. Any policy that encourages people "not" to see a doctor....;

is a bad policy.
The policy discourages preventive care by attaching a profit motive to those that don't see a doctor when they should.

[groovedaddy]

2. Couldn't this be dealt with by requiring the patient to have preventive care/physicals/check ups?

If they didn't do these, they wouldn't qualify to receive a "healthy bonus."
I suppose that, conversely, if you have access to healthcare, what's the incentive to stay healthy?

[Bonhomme Richard]

3. My guess is that there are 2 reasons someone wouldn't....

go to the Doctor.
1. They can't afford it. Coverage would make that point moot.
2. They are afraid for any number of reasons. I have to believe that would be a small minority.
I can't see how giving someone an incentive not to see a physician would be helpful and I don't see anything being fixed as long as we have a "For Profit" health care system.

[groovedaddy]

4. I absolutely agree that the "for profit" in medicine is a, if not THE, most fundamental

problem.
That said, you didn't really answer what I posed, which is: how do you incent people to stay healthy?
One would think that EVERYONE would want to be in good health. But clearly, even people who have insurance and can afford to do see a physician, are often in ill health because of their personal habits and choices. I've known too many people who've been told by physicians to stop eating high fat foods, stop smoking, stop drinking, etc. and they didn't stop. They got sicker and many ended dead as a result of their choices. Good health was not enough of an incentive.
As I pointed out, in order to qualify for the incentive, it can be required that a person would have to have a physical exam once a year. If they refuse to do that, they wouldn't qualify for the incentive.

[Why Syzygy]

5. Makes sense to me.

Some auto insurance companies do something similar. If I read correctly, preventative (routine) care would be mandatory for the rebates?

Although, this does point out one of the failings of insurance. That is, the 'well behaved' (fortunate) are expected to carry part of the burden for the less fortunate. All the people who never file a claim pay for the losses. Not saying there's a better way. It is society after all.

[groovedaddy]

6. you're right about the auto insurance...no accidents/tickets = lower rates.

Why not the same with health care? And even if we went to universal coverage, why not rebates for people who keep themselves healthy through lifestyle choices?

[trotsky]

7. There's a pretty significant difference here.

Say you get a little bumper damage in a parking lot. Not worth alerting your insurer about; you'll just live with it. It's certainly not going to get worse or affect anyone else by ignoring it.

But what if you get strep throat? "Hmm, better not alert my doctor, it'll count against me. I'll just ride it out." You are now contagious, and the disease could get much much worse before it gets better. Same thing with any number of ailments. The correct "lifestyle choices" don't GUARANTEE health. Non-smokers can get lung cancer. Well-conditioned athletes can have heart attacks. A policy that encourages people to avoid treatment for minor problems will lead to major problems - costing the rest of us more.

[groovedaddy]

8. Good points. My understanding of being contagious, is that a person is contagious

BEFORE they show symptoms. One would certainly hope that people who are sick would want relief and would see a physician.
No, lifestyle choices do not guaruntee good health, but they sure as hell increase the probability of it.
Basically, it comes down to this: people make choices that put them more at risk, raising the probability that they will need health care. How do you build in to the cost of healthcare (or should we?) the fact that people make choices that will cost the rest of us who don't participate in said activities?
Back to the auto insurance analogy - people who speed on the highways pose a greater risk to safety - their's and others. If they get a speeding ticket, that info is passed to their insurer as well as going on their driving record and their rates will go up. Hopefully, this discourages many people from violating traffic laws, though clearly not everyone.
Should people be rewarded for practicing healthy lifestyles? I think so. Of course this can be achieved by taxing the hell out of certain activities (alcohol, tobacco, etc.) and applying part of that proceeds of these taxes to the cost of healthcare.

[trotsky]

9. Strep is highly contagious until the antibiotic treatment has started.

It would be great if things worked as simply as "people who make bad choices should bear the burden of those choices." But the "ideal" application of that ends up being a cold, heartless libertarian society. Sometimes shit happens, no matter how healthy you've tried to live. And if there is an incentive to avoid medical treatment, risking the health of others and raising the eventual cost of that treatment when it reaches the level of being necessary to save the person's life, well I don't think it's that difficult to see such a solution being pretty lousy and ultimately MORE expensive.

At some point, people need to realize that the reward for living healthy is just that: a healthy life.

[groovedaddy]

10. "people who make bad choices should bear the burden of those choices."

Well, I certainly didn't say that. In my opinion, any society must attempt to strike the balance of the rights and responsibilities of individuals and how the costs of individual actions are absorbed by the society at large. In a free society, it seems to me, the level of responsibility of the individual is given greater weight. But rarely is it ever as black and white as: "people who make bad choices should bear the burden of those choices." What about the children of those making "bad choices?" As a just, democratic society, we should endeavor to find the most equitable balance between the rights of the individual and the needs of society. If we had universal health care, should we fine people who have contagious diseases but who fail to see a physician?

[LeftishBrit]

14. I agree with your last sentence.

For the rest, making healthcare provision dependent on people's 'choices' is a dangerous thing to do. In a system without universal healthcare, it means callously abandoning lots of people and blaming the victims. In a system with notional universal healthcare, it creates an intrusive 'nanny state': contrary to RW propaganda, 'nanny state'-ism comes not from universal provision of services, but from attempts to distinguish between 'the deserving' and 'undeserving' and use of public services as a carrot or stick.

Not that healthy behaviour shouldn't be encouraged, but access to medical services should not depend on it.

[LeftishBrit]

13. I agree.

[Why Syzygy]

11. After more thought...

I have reservations about allowing the government aka insurance administration to define what constitutes "healthy habits".
If it is based strictly on results and not methods, opportunities for abuse would be minimized.
But, I really don't want someone like the Bush administration telling me what I must do to be "healthy".

[Why Syzygy]

12. Re: post #11 . Like this

http://rawstory.com/news/2008/Pay_teenagers_not_to_get_pregnant_0312.html
~snipped
Another AP article adds, "The first step in lowering health care costs and insuring all Americans is getting people to change their behavior, former U.S. House Speaker Newt Gingrich told state lawmakers Wednesday. The Republican endorsed the carrot over the stick, saying he would pay pregnant teens to take prenatal vitamins and go to the doctor regularly so the government avoids astronomical bills when babies end up in neonatal intensive care units."

"His other ideas include paying teens who don't get pregnant and stay in school; requiring exercise for school children; giving tax breaks to grocery stores that open in the inner city; giving bonuses to food stamp recipients who buy fruits and vegetables; and making students walk to school if they live close enough," the story continues.

"You've got to start with the individual," Gingrich told the Senate Health Policy Committee. "We have not thought through the fundamentals."