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Can the free market approach work to control costs?
Yes, when it's allowed to work.
Definity Health, a venture-capital-backed business, designed a policy
that offered insurance for catastrophiclly expensive health care
expenses. Their policies were linked to a health savings account which
could be used to pay for uninsured needs and 100% of preventative
care.
The savings: about 40% cheaper than traditional plans.
They were so effective they sold over 9 million policies before being bought out by United Health Group for about $340 million in 2004.
Another for-profit market place known as eHealthInsurance Services,
Inc., offers more than 5,000 health plans underwritten by more than 140
leading health insurance companies. In 2005, 25% of its customers
earned less than $35,000, and more than 40% of those who bought
higher-deductible policies were uninsured previously. |
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