I just read an interesting article on this. Basically, this person suggests that the government enact laws that would allow every insurance company to sell policies in every state which would increase competition. Then he suggests that employers stop offering health insurance to their employees and instead give them the 12K a year average they are spending on health insurance for them as a salary increase. Then that person takes the money and goes out on the open market and buys a policy. That 12K can be tax free/deductible if they spend it on insurance. If the government wants to subsidize for the poor they can institute a program where they help pay for coverage.
He then suggests that insurance programs only cover catastrophic things and that doctor visits (to some degree prescriptions) and even short visits to the hospital be paid out of pocket. His idea is that the average family of four doesn't spend 12K a year on medicine/doctor visits. So they pay for coverage for major things, pay the rest out of pocket and they still would come out ahead.
More importantly this would lower costs of health care. The reason prices go up is that people don't care what it costs because they aren't paying the bill. If you go to the doctor for something they bill your insurance and while you may see how much the bill was, you don't care because it is not coming out of your pocket. When it is, you will demand better pricing. He sites Lasik surgery as a great example. This surgery is not covered by most insurance programs so you pay it out of pocket and the cost of it has dropped dramatically since it came onto the market. Much the same should than happen in other ends of health care. For example if you pay your doctor $150 for a visit and he steps in, asks you three questions, listens to your lungs and heart, looks down your throat and in your ears then leaves and is in the room for five minutes, you might feel like you are not getting your moneys worth. If another doctor spends more time with you and gives you better service and charges $90 you will probably end up switching and the previous doctor may have to lower his price or change the type of service he provides to hold onto customers.
Of course the potential downfall of this system is that most people when given this extra money would buy the cheapest insurance they could and spend the rest. So when their kids got sick and needed to see a doctor they wouldn't have the cash and we end up back in a situation where people get service, but end up not paying for it.
Anyway, it is an interesting read.
http://www.electoral-vote.com/ here is the rest of it.