Social insurance - to pay for large medical bills

My friend asked me to help publicise an appeal for a little girl called Chloe who has a rare disorder called Pompe Disease and needs $200,000 to $300,000 a year to be treated. This is a lot of money and is likely to be beyond the means of compassionate, ordinary people.

This issue raises the following questions:

• Should something be done to help people like Chloe who are borne with a rare disorder? 
• Should the state take this burden from the parents?
• Can a solution be found using private insurance?

I must first rule out private insurance as most people are not likely to take up insurance against the unexpected and undefined risks of life - until it happened. There are other problems associated with the profit motive of insurance companies, leading to dispute on claim settlement or unfair rejection of legitimate claims.

The best approach is through social insurance, i.e. insurance provided by the state. It should cover all  eligible people and be funded by taxation or compulsory contribution (that can be adjusted based on actual experience) or a mix of both sources of funding.

Some issues to be considered by the state are:

• Should the social insurance pay for expensive treatment that boost the profit of pharmaceutical companies?
• Should there be a cap on the amount that are to be funded by the state?

Some possible approaches that are helpful are:

• The compensation should be for the actual cost of treatment and can be subject to a cap of say $100,000 and should be used under proper guidance.
• The cap may not be sufficient to meet the needs of serious cases, but it does help to provide some relief to the parents. It may be possible for the pharmaceutical company to reduce the cost of the drugs. 
• More importantly, there could be many cases where this type of compensation would be helpful to the parents.

It may be difficult to design a social insurance scheme, but this should not stop us from giving attention to this matter. If nothing is done, then the burden has to be met by the parents or family members (who may not have the financial means) or the patient will not be treated due to lack of funds. 

It is not a good approach to leave these problems to charity. Apart from the high cost of collecting and accounting for the donations, there is the risk that some of these cases may be exploited by unscrupulous people who wish to make a personal profit from the effort. (However, in Chloe's case, I find that the donations will be administered by the hospital).

Tan Kin Lian