What if people were asked to spend a certain percentage of their income on healthcare before insurance kicked in?
“Health insurance is just a means by which needed health care can be made “affordable” to Americans when they fall ill. Therefore the proper target of health policy should be the family’s total outlay on health care, including out-of-pocket spending. That total outlay on “needed health care” should be made “affordable.”
Which requires us to define concretely, for practical purposes, what we mean by “health care” and “affordable,” pedantic as that may sound. Politicians should be forced to be utterly clear about it.
Usually we think of “health care” loosely as the services performed or products prescribed by health care professionals, notably physicians. But those services and products range all the way from pure consumption goods widely regarded as the recipient’s financial responsibility (e.g., purely cosmetic surgery or Botox injections) to acutely needed care widely viewed as a social good that should be available to everyone, regardless of ability to pay for it (e.g., health care after a serious accident or heart attack).
A practical way of doing this is suggested in M. Kate Bundorf and Mark V. Pauly’s article “Is health insurance affordable for the uninsured?” Although the full content of that paper is accessible only to Capitol Hill staff members who do not blanch at mathematical notation, in plainer English the two authors define “affordability” as: what a family could spend with its disposable income for health insurance premiums plus out-of-pocket costs on a minimally adequate package of health care benefits, and still have enough money left over for a minimally adequate package of all other basic necessities of modern living (food, housing, schooling, clothes, etc.).”