There are two sides to the health insurance problem:
- Most of our health “insurance” isn’t insurance at all. Insurance is supposed to be a transferrance of risk. Insurance companies take our money, pay their costs, take a profit, and pay for claims. In the case of the financially catastrophic event that is low risk, this is a good deal. Paying $20/mo for $500,000 of life insurance make sense, if your family needs that amount to continue living. The reason this works is that the insurance companies expect only 1 person in 30,000 to die (in this risk category), such that they take in $600,000, and only pay out $500,000. And that works for everyone.
However, for the non-catastrophic financial event, or one that is expected to happen, this doesn’t make any sense. Say you go to the doctor twice a year, and he charges $100 for each event. You could pay the $100 to the doctor, or your insurance company could pay the $100, plus the costs of processing the claim, the overhead costs of doing business, and take a profit. And where does that money come from? Well, your paycheck, of course.
That’s right. If the insurance company’s cost/profit is $110 for the doctor visit, then they’re charging you (based upon their calculations of your group’s risk) $110 for something that you could have paid $100 for.
Yes, it’s a ripoff. Why does it work?
Because your government gives you and your company a tax break to take health “insruance” benefits rather than take the money directly.
So, think for a moment. In a given year, a typical employer based health insurance plan will cost around $10,000 per person. When was the last time you spent $10,000 on health insurance in a year after deductibles, co-pays and 80/20%? Chances are the answer is “never.”
That’s right, you lose money every year on health insurance
Government run health care just makes this even worse, because the government is HUGELY INEFFICIENT in everything it does. Overhead costs are going to be huge, and that will impact how much money the government needs to pay for health care.
What we need medical insurance for is the financially catastrophic and low risk event. Like a heart attack or stroke or cancer. Generally, none of us should ever use our health insurance on an annual basis.
Now, this is different from Medicare, which is important in honoring our parents in their elderly years.
BUT WAIT, THERE’S MORE!
There is also an effect of having costs paid for by health insurance companies: Patients stop caring what health care costs.
Why is this important?
Consider two doctors. One has a small office with a cramped, uncomfortable waiting room, and a nurse who doubles as the receptionist, and small waiting rooms, and the doctor has to send all tests out to be run. But this doctor charges $25/cisit.
The other has a large building with vaulted ceilings, a big, comfortable waiting area with a 52" HDTV, and the receptionists is there to cater to your needs, including complementary water and coffee, a large play area for the kids, and free wi-fi. The treatment rooms are large, and the doctor has a complete lab on site for all tests. This doctor charges $100/visit.
Now, if everyone is paying for these doctors out of their own pockets, each doctor gets some patients, because some like the $25 cost, and some want the amenities of the more expensive doctor.
But, if we move to a $20 co-pay for doctor visits, everyone goes to the $100 doctor, and the $25 doctor goes out of business, because patients no longer care what the doctor charges. The $25 doctor then goes and gets a bigger building, with more amenities and charges $120/visit, and people start going there. So the $100 doctor gets more amenities, and charges $150/visit… you get the idea.
That’s why our health care costs ahve been skyrocketing for so many years: There is no market price control for those with health insurance. That’s also why insurance costs have gone up and coverage has gone down. Insurance companies try to negotiate fixed costs for services from hosptials and such, but now you have a huge amount of contention over these things, and that’s just a recipe for disaster.
How does government fix these things? Government fixes prices for procedures, and hospitals and doctors are forced to live with it. Again, not a good solution. Unless you want doctors leaving their practices because they’re losing money.
So, we can see two MAJOR problems both with the current “insurance” system, and how these things will get worse with government run health care.
The solution? Repeal the mega tax break companies get for offering insurance on things that ought not be insured. When patients start caring what non-financially catastrophic care costs, prices will go down. For the insured AND uninsured. ANd people will get more money in their paychecks, as the cost of health insurance goes way down, as well.
I know there wasn’t a lot of religious stuff in here, but I’ll cite from the 10 commandments: Thou shalt not steal. Offering “insurance” for the non-catastrophic and expected event is flat out stealing. ANd we should stop doing it.