If young people started buying catastrophic insurance and opted out of their employer provided systems, the entire scheme would collapse overnight. But we might be better for it in the long run.
Mark, the plan I have at my day job works very much like that. I get an annual allowance for basic care (about $750), and 100 pct of my basic care is paid from that — including drugs — until it runs out. If it doesn’t run out, the excess rolls over to the next year.
After it runs out, I cover everything up to some other limit as a deductible. (I think about $2000 but I don’t recall right now.) Then it works like normal insurance: they pay a big percentage, I pay a small one. I also have a healthcare flexible spending account, with which I can pay any deductibles and the like until that runs out. Since the $750 is, in effect, my money, my insurance costs are rather reduced. Of course, it would be even better if I could just do the money myself — the insurance company is taking something off the top — but it’s advantageous to me because, as part of my company’s coverage, it’s deductible as an expense to them, direct to the bottom line. For me, it wouldn’t be.
