There are two sides to the health insurance problem:
- Most of our health “insurance” isn’t insurance…
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. Problem with your analysis–the company gets a the same tax break or expense deduction whether they pay you or the insurance company. In the first instance they get a wage deduction, in the second they get an employee benefit deduction. They may save a little on payroll taxes by paying health insurance. Would you use this same argument with regard to wages–the government gives you and your company a tax break to hire you?
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.” Could you cite a source for you per person cost? The number you cite is more than family coverage for our employees. And why do you say after deductibles? Cost is cost
That’s right, you lose money every year on health insurance You are protected against large healthcare costs. Would you say you lose money everyyear on life insurance simply because you don’t die?
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. So are most large businesses. It’s extremely funny to listen to employees gathered around a water cooler–complaining about the government employee’s being inefficient and not working.
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.
There is also an effect of having costs paid for by health insurance companies: Patients stop caring what health care costs.
Consider two doctors…
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. It is not quite that simple. Insurance companies only cover to a certain negotiated amount. That’s why your bills show the Dr’s office writing off part of their charge–because of their agreement with the insurance company–they can’t charge the “full” rate. I agree with you in theory on this–i.e their is no real market force to control costs ie. the doctors competing on cost and service for actual patients–our insurance company basically gives us a list of Dr’s we can choose from–most of whom will charge us the insurance company the negotiated rate and us a copay + possibly some out of pocket charge depending on the service.
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. We had Dr’s when they took pigs in trade for service, made house calls and charged what they thought their patients could afford. So they make $100,000 a year instead of $200,000. Or the surgeon makes $400,000 instead of $800,000. They’re going to quit because of that? Starting in the late 60’s early 70’s we changed the way we compensated Dr’s–that is also a factor in costs going up. Dr’s are now compensated for things they used to do as part of their service. They are not going to lose money. They just tell you that to scare you.
The solution? Repeal the mega tax break companies get for offering insurance on things that ought not be insured. Explain this “mega” tax break please. See above.When patients start caring what non-financially catastrophic care costs, prices will go down. You mean like gas prices? Cause nobody cares what gas costs right? For the insured AND uninsured. ANd people will get more money in their paychecks, or business owners increased profits maybe?
Not even worth a respnonse.