Many people are not aware that the current system of employer provided benefits was a result of the New Deal wage controls that limited employee salaries. Thus, employers added benefits packages to attract the best candidates. The negative result of this trend was that employees became reluctant to switch jobs for fear of losing a good benefits package and employers became saddled with increasing benefits and human resources costs.

Part 1 of this series discussed the implementation of a Canadian style retirement plan to alleviate some of these costs. This installment offers some health care suggestions.

Congress is currently discussing a "public" or government health insurance option (based on Medicare) that it says is necessary to cover everyone without health insurance, while maintaining that those with employer based plans will be able to keep them if they are satisfactory.

The implementation of a government health insurance plan will result in:

a) Employers deciding that it is cheaper to put employees in the government plan than to purchase private insurance, thereby decimating the private insurance industry. It appears that congress will consider employer provided health insurance as a taxable benefit, thereby increasing the government plan transition rate.

b) Doctors being paid less for patients insured by the government plan (as is the case with Medicare), so there will be less incentive for doctors to treat these patients.

c) Government bureaucrats deciding which patients will be allowed certain treatments in order to reduce the prohibitive costs, thereby rationing health care. Seniors will be the first to be impacted.

d) An increase in the number of doctors who retire and a decrease in the number of medical students due to insufficient compensation, causing shortages and waiting lists.

e) A decrease in pharmaceutical innovation, since the government plan will pay less for expensive drugs. There will be a decrease in medical device innovation for similar reasons.

Ultimately, we will have the Canadian health care system, where my mother's cancer surgery was delayed by a month because the hospital closed the operating room to "elective" procedures, where not as lucky patients die while waiting for treatment and where doctors take three month vacations because compensation is inversely proportional to the number of patients seen during the year, such that seeing those patients may not provide sufficient income to keep the office open.

So, what are some solutions that do not involve a government option, but still provide portable insurance that is employer independent?

We have tax deductible health savings accounts, but I believe it maxes out at $5000, which won't help with a $12,000 family insurance plan.

A problem is having a large enough group over which costs and risk can be spread. I would love to be able to purchase health insurance through AAA (like my car and home policies) or Costco, where I know the plans will be competitive and costs will be controlled.

I just attended a computer consultants group meeting where I discovered that it provides a health care plan in other states, but not in MA due to government regulations. I'm a big proponent of states' rights, but just because a state government can be stupid doesn't mean it should be stupid (see CA).

I would like to see municipalities designated as groups, so that plans could be offered through municipalities. Note that the plans would not be run by the government, but by the private provider.

Other suggestions are welcome. You can post them here.