NCPA - National Center for Policy Analysis


March 2, 2005

The nation's health care system is based on the Service Delivery Paradigm, which treats consumers as passive receptacles with little decision-making power, to which health care services are delivered. A better model is the Patient Power Paradigm, which empowers consumers to make their own health care decisions without the interference of bureaucrats and third parties, says the Illinois Policy Institute.

The federal government can take several steps to promote Patient Power Paradigm, says IPI:

  • It should aggressively promote Health Savings Accounts (HSAs), which allow consumers to deposit up to $5,200 of tax-free income annually per family for health care expenses.
  • Congress should reimburse health care providers for the full cost of services to Medicare patients to avoid providers shifting costs to patients with private sector insurance.
  • Congress should allow consumers to opt out of state mandates (which drive up insurance costs) by purchasing insurance from providers in other states.

State initiatives recommended by IPI include:

  • Rolling back costly health care mandates that raise insurance premiums; currently, 50 states have over 1,500 total mandates in place.
  • Repealing laws that mandate guaranteed issue, which requires insurers to accept every applicant regardless of his or her health history.
  • Repealing laws that mandate community rating, which requires insurers to charge the same premium to all insureds regardless of their age, health history and other factors; community rating shifts the cost of coverage from older, sicker individuals to younger, healthier families.
  • Creating high-risk insurance pools financed by state appropriations; currently, 28 states have high-risk pools in place that charge about 150 percent of the normal premium.

Furthermore, the federal and state governments should enact malpractice reform by imposing limits on non-economic damages, punitive damages and attorney's fees.

Source: "A Health Care Agenda for Illinois," Illinois Policy Institute, November 2004.


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