To prevent a disruption in the national economy during World War II, the United States government imposed a wage freeze, but allowed an increase in employment benefits by employers who used health insurance policies to lure workers. The employer-sponsored health insurance system has dictated the way to finance health care in this nation for the last five-plus decades and has seriously undermined the free-market mechanism in the health care system.

Although the employer collectively bargains with the insurer for employee health insurance policies and pays total or part of its cost, the employee owns the policy because he earns it as part of the compensation for his work. It is not a gift from his employer. However, the employee, with few exceptions, has thought that his employer and the insurer pay for his health care. The employee has lost the financial incentives for him to conserve both the health care dollar and resource. Health professionals including medical doctors have been compensated for patient care, have illusively thought that the patient neither pays for the care nor is concerned about the cost of the care, and have given necessary and unnecessary care at whatever cost. A direct patient-doctor relationship like the buyer-seller relationship in a free market has become a complex, multi-player relationship that does not follow the rules of supply and demand.

The rising health care cost, resulting from abuses by patients, health professionals, and health care facilities, has quickly caught the attention of the insurer who has frequently had to charge more in premiums from employers only to pay for the generous corporate business expenses and to meet the projected corporate profits. The insurer has not only sharply increased the insurance rate, but has also curbed, legitimately and illegitimately, both the reimbursement and coverage. Alerted by the steeply and often unpredictably increased cost for employee health insurance that critically affects the success of his business, the employer has shopped for the least expensive policy often at the expense of quality coverage.

For the last four years, more Americans have asked for sensible reforms of the messy health care system including the health insurance industry. However, more legislation and laws have failed to address the root of the dilemma, and are pushing the already crippled health care system into an irreparable state.

Americans need the basic freedom to choose the way to finance their own health care as they see fit. Using the existing flawed laws and regulations to herd the American people into a market with a limited choice of health insurance models is un-American and unconstitutional! Most Americans, if not all, are desperately searching for an alternative to existing insurance models, which will offer individual autonomy in making decisions on health care and the way to pay for it. This alternative is Autonomous Care.

Autonomous care recognizes individual subscribers as the buyers in the free market and the driving force in the health care system, and features them as the sole owners who direct its coverage, share its risks and enjoy freedom of choice. Best of all, by empowering its subscribers with financial incentives and decision-making, whose unrestricted freedom of choice compel health professionals and facilities to compete among themselves, autonomous care can logically contain health care cost and maintain quality care.

Over the last three decades, health insurance companies, have increased their profits by coaxing Americans into subscribing to the high-premium policies with a low co-payment, in some cases with no co-payment. Stripped of both the freedom to choose the way to finance individual health care by the employer-sponsored system (in which employees have little or no choice of health plans) and the financial reserve (after having paid too much premium to insurance carriers), most Americans are left powerless in choosing health care as if being suspended in midair by the forces from employer, insurance company, and government---the model in a socialist nation.

Until recent years, most Americans had been accustomed to being dictated to by these forces and did not realize or care about the loss of freedom of choice, as long as they could have care on demand and continue to think that someone else paid for their care. After being denied quality care and being alarmed by the renewed increase in insurance premiums, they need freedom of choice now: they must have individual financial support that can only be achieved through savings.

Savings, regardless of the amount, is an important source of financial support and an excellent way to pay for either planned or unexpected expenses especially for a catastrophe. Nowadays, more Americans, particularly the young ones, have begun to set aside part of their earnings, free of tax, with savings accounts such as Individual Retirement Accounts (IRAs) and 401K plans, because they want to well prepare themselves in case of an unexpected economic hardship and ensure themselves an independent life in their retirement. Undeniably, the preferential tax treatment on contributions to IRAs and 401K plans has been responsible for the trend to save.

The same logic is true in the case of health care. Long before the Medical Savings Accounts provision was enacted in 1997, the employee has been allowed to pledge a portion of his annual wage, free of tax, to his Flexible Spending Accounts (FSAs.) Under the FSAs, the employer withholds a portion of the employee’s monthly salary before tax which equals one twelfth of the pledged amount for his FSA. The employer is required to reimburse the employee’s health care expenses up to the full-pledged amount at any time during the year; that is a risk the employer must assume in case the employee leaves his job before the end of the year. In turn, the employer is allowed to forfeit the balance of the employee’s FSA if the employee has not used it up---a reverse incentive that encourages Americans to spend more on health care!

Both MSAs and FSAs enjoy the same preferential tax treatment on their contribution. While the MSAs, coupled with the publicly-controlled, non-profit, regional self-insurance pools, promote individual responsibility, preserve freedom of choice, contain health care costs, and maintain quality care at the same time, the FSAs serve none of the positive purposes by the MSAs but help the employee use the pretax dollar to pay for health care expenses. Worst of all, the FSAs encourage the employee to spend the balance of his FSA. Most employees are the middle- and low-income Americans. Given a choice between MSAs and FSAs, working Americans would definitely prefer MSAs to FSAs. Politicians, especially those who are professed defenders of working Americans, regardless of their party affiliation, should rush to support a legislation to replace of FSAs with MSAs in the workplace.

A patient with a MSA is required to use the money in his account to pay for any deductible and co-payment. It would be to his advantage to shop for quality care at low cost and not to utilize unnecessary care. He is also free to use the money to pay for health care not covered by his catastrophic insurance. Under Autonomous Care, health professionals and facilities do not contract with insurers and must render excellent care at a reasonable charge to gain the patient’s confidence.

Enough has been said about how Medical Savings Accounts work for middle- and upper-income Americans. Contrary to what its foes claim, MSAs also work well, with proper legislative efforts, for indigent and low-income Americans.

Under Autonomous Care, MSAs would work well with Medicaid programs, whether or not coupled with the publicly-controlled, non-profit, regional self-insurance pools. For its Medicaid programs, the state would place 20% of the Medicaid Fund, after taking 3-5% of the fund for administrative costs, into escrow as co-payment accounts (as MSAs) and inform each Medicaid recipient of his ownership of the amount of the MSA. The state would reserve another 30% of the fund to pay for the gap between the recipient-owned amount and the full-limit of his MSA. The rest of the fund would be used as a general fund or contributed to a publicly-controlled, non-profit regional self-insurance pool, if available, for insurance claims.

A recipient would visit his family physician, gynecologist or pediatrician two or three times annually at no cost to his co-payment account. Using other health care services, including hospitalization and transportation, however, would require a 20% charge of the total reimbursement to his co-payment account until the account, including the amount from the reserve, is exhausted for that year. The pool would be totally responsible for the charges for further services during the year. At the end of each year, the balance of the recipient-owned co-payment fund (or MSA) would be added to the new fund for the following year and be rolled over into a regular MSA when he is out of the Medicaid program.

Autonomous Care would save money for the state on the Medicaid program without having to deny proper care to the recipient. Moreover, it encourages recipients to choose healthy lifestyles and to practice preventative care.

With modifications including laws and regulations, MSAs under Autonomous Care would also save money for Medicare programs and help low-income Americans. Most importantly, the laws must allow using a sliding scale based on the recipient’s financial situation, instead of the rules of "all or none", to index the amount of governmental financial assistance to individuals, in establishing their MSAs and subscribing to catastrophic insurance. Using the governmental contribution as a voucher in the MSAs only after exhausting the individual’s MSA, provides an incentive not to abuse the health care resources, consequently reducing the cost of health care and helping each low-income American build up his MSA with his own fund. Best of all, recipients of governmental assistance would have the same level of autonomy and responsibility as others.

Nevertheless, since after the enactment of the Medical Savings Accounts Provision, insurance companies have offered a MSA holder a high-deductible catastrophic policy at a premium which is unfairly higher in proportion to that of a traditional low-deductible policy. Such unfair practices are designed clearly to make more profits and, at the same time, to discourage people from establishing MSAs that is the first step in restoring freedom of choice in health care. Therefore, it is clear that the insurance sector will not cooperate or support reforming the health insurance system.

We are constantly reminded that we should save for a rainy day. However, to hedge against one’s catastrophe requires a large fund through a long time of saving. Insurance is simply pooling small premiums from a group of individuals to build a large fund that is used to pay for a catastrophe. Everyone wishes only to contribute into the insurance pool a possibly small premium for such coverage in case of a catastrophe. That can be achieved only by both eliminating unnecessary business expenses and profits and utilizing coverage judiciously and can only be found in a non-profit self-insurance pool which is owned and operated by its policyholders.

After experiencing a sharp increase in the premiums for employee health insurance during the past decade, an increasing number of businesses with more than 50 employees have switched from commercial insurance programs to self-insurance programs. In spite of a few reports of shortfall on the self-insurance programs, most businesses, with the proper setup on the stop-loss mechanism, have been able to contain the health coverage expense through the programs and minimize the impact of the cost for the employee health insurance impact on their business competitiveness. Many unions also successfully offer their membership health coverage through self-insurance programs.

The other part of Autonomous Care, the public-controlled, non-profit, regional self-insurance pools are voluntarily organized by a group of citizens in a region, either a part of or a whole state, who have established MSAs, to underwrite catastrophic policy for themselves. The goals for the self-insurance pools are:

Other than creating its own administration to administer its benefit coverage, a pool may elect to contract with a commercial health insurance company at a fee to operate the pool under the direction of its Subscriber Body and Board of Directors. To ensure that the pool continues to serve the intended public purposes, its status and requirements are defined and protected by law as suggested in the legislative involvement.

Creating new laws to make a broken system work is likened to beating a dead horse. The health care system, especially the health care financing system, urgently needs an overhaul by repealing all flawed laws and regulations and making simple and practical ones to give the ailing system new life.

Instead of painstakingly limiting the patient’s rights to a list of a Bill of Rights, Congress must repeal the laws that favor the employer-sponsored health plans. In lieu of offering health plans to its employees, the employer should be allowed to offer them pretax health care benefits in cash equal to the cost for the plans and the employees should be allowed to use the cash benefits without having to pay taxes by paying for health insurance and/or contributing into MSAs. Congress must also require a committee organized by the employees to choose and negotiate with insurance companies for the employer-sponsored health plans, to which the employer is required only to contribute the amount for the annual employee health care benefits.

Such a legislative amendment would restore Americans the fundamental right, guaranteed by the Constitution, to choose the way to pay for their health care. That would pressure health insurance companies to be more responsive and more patient-friendly. Consequently, the insurance companies would have to honestly disclose their coverage to individual subscribers to secure their business--the same way the automobile and homeowner insurance industries have to disclose their coverage.

To guarantee every American the same rights under the Constitution, Congress must amend the laws that have unfairly restricted the self-employed and the self-sufficient unemployed using pretax dollars to pay for their health insurance policy, a right that the rest of the American workers enjoy. Many of the self-employed are working poor. Nevertheless, this group of Americans pay their share of taxes and deserve no discrimination against them. Most importantly, the amendment, with an equal amount of tax exemption for every individual and family to contribute to the MSAs and pay for health insurance as an incentive, would encourage the uninsured to seek health care coverage. That would be a significant step in the path to the national health care coverage through voluntary participation not governmental mandate.

Laws must offer all Americans an equal opportunity to choose establishing the MSAs to finance health care. Congress should amend the laws to make the MSAs a transferable asset, free of tax, between family members and friends, so long as the balance of the MSAs is used solely to pay for health care. Such changes would let the older generation help the younger and friends help friends. Best of all, it would enhance inter-human relationships and promote social harmony.

Congress and State Houses must help the public to voluntarily organize the publicly-controlled, non-profit, regional self-insurance pools to provide only high-deductible catastrophic health insurance coverage to the MSA holders. Every state can let its citizens with MSAs organize one or several regional pools depending on the size of the state and its population. The law should allow a group of individuals and professional or trade associations to create such pools, which may eventually join together to organize larger pools. The law should also recognize that the self-insurance pools are not an insurer.

The Rules and Regulations should be created to give the pools a broad range of autonomy in setting up their operations, which would be decided by a majority of their subscribers and would be in compliance with both the federal and state laws to prevent discrimination. The law may require the pools to admit a minimal quota of Medicare beneficiaries and Medicaid recipients within a number of years after becoming operational, in exchange for their non-profit status. Such a quota should be set based on the population of Medicare beneficiaries and Medicaid recipients in that region. The law shall encourage health care practitioners and facilities, pharmacies, and healthcare suppliers to voluntarily offer a discount to individuals who subscribe to the self-insurance pools. Such a discount would facilitate free competition to benefit the patients and enable the public to monitor the rate of future fee or cost increase, thereby, containing health care costs.

The law should specifically require:

Under Autonomous Care, all Americans would be insurable by choice not by mandate for health care. Autonomous Care would logically motivate the American people to assume individual responsibility for their health and finance. It would afford them freedom of choice in health care and both portability and affordability for health insurance through its regional self-insurance pools, regardless of their race, age, gender, social and employment status. It would encourage them to save more by staying healthy. That would save Medicare, Medicaid, and other social programs from insolvency. It would relieve businesses from having to worry about the cost for the employee health plan while facing competition domestically and globally. Best of all, it would restore the simple and direct patient-doctor relationship for the American people once again!

If you like the concept of Autonomous Care, please ask your US Senators and Representative to support it.