Posted on 07/08/2009 10:03:42 AM PDT by Kaslin
Health care "reformers" keep talking about getting us more health insurance. Then they talk about cutting costs. This is contradictory nonsense.
Insurance, whether private or a government Ponzi scheme like Medicare, means third parties pay the bills. When someone else pays, costs always go up.
Imagine if you had grocery insurance. You wouldn't care how much food cost. Why shop around? If someone else were paying 80 percent, you'd buy the most expensive cuts of meat. Prices would skyrocket.
That's what health insurance does to medical care. Patients rarely even ask what anything costs. Doctors often don't know. Often nobody even gives a damn. Patients rarely ask, "Is that MRI really necessary? Is there a cheaper place?" We consume without thinking.
By contrast, in areas of medicine where most patients pay their own way, service gets better, while prices fall.
Take plastic surgery and Lasik eye surgery: Because patients shop around and compare prices, doctors work hard to win their business. They often give customers their cell-phone numbers. Service keeps increasing, but prices don't. "In every other field of medicine, the price is going up faster than consumer prices in general," says John Goodman of the National Center for Policy Analysis. "But the price of Lasik surgery, on average, has gone down by 30 percent."
This shouldn't be a surprise. What holds costs down is patients acting like consumers, looking out for themselves in a competitive market. Providers fight to win business by keeping costs down and quality up.
Yet politicians keep telling us the solution is more insurance. And they mean insurance not just for catastrophic diseases that could bankrupt us but also for routine treatments.
The politicians are so oblivious to reality that they are on course to make things worse. Obama would force every business to either give workers health insurance or pay a fine into the public system. Why is that something we should want employers to do? Premiums come out of our salaries, but insurers are accountable to our bosses, not to us.
Why not just have a free market where people can buy whatever kind of health insurance they want? Competition would then bring prices down.
Obama and his Senate allies would limit competition by requiring insurers to cover everyone for the same "fair" price. No "cherry picking," the president says. No charging healthy people less.
They call this "community rating," and it sounds fair. No more cruel "discrimination" against people who have a preexisting condition, obese people or smokers. But such simple-minded one-size-fits-all rules take from insurance companies their best price-dampening tool: Risk-based pricing encourages people to take better care of themselves, just as car-insurance companies reward good drivers. With one-size pricing your car-insurance company must give the town drunk the same deal it gives you.
Insane, but the health-insurance industry is playing along. Insurers say that if government forces everyone to have insurance, they will accept all customers regardless of preexisting illnesses.
They also offered to stop charging higher premiums to sick people. They're even giving up on gender differences.
Sen. John Kerry huffed, "The disparity between women and men in the individual insurance market is just plain wrong, and it has to change." The president of the industry trade group, Karen M. Ignagni, agreed that disparities "should be eliminated."
Give me a break.
Women pay more than men for health insurance for good reason. Despite being healthier than men, they incur higher costs because they go to doctors more often, and they take more medicine. Kerry is pandering. I don't recall him demanding that men be protected from higher life-insurance and auto-insurance premiums.
"Community rating" hides the cost of health care. It's as destructive as ordering fire insurance companies to charge identical premiums for wood frame and stone houses. Universal health insurance with "no discrimination" pricing will make health care costs rise even faster.
When politicians interfere with free markets, unintended consequences harm everyone, except the companies that lobby hard enough to protect themselves.
Is it too much to expect our rulers to understand this?
The Ponzi schemes are the stimulus bills. Ask why it was passed with no examination by the public and why very little of it has been distrubited except to political cronies.
Policians, while exempting themselves, want to decide who lives and who dies without bothering with camps. Case closed. Welcome to Germany 1938. We already have a Fuhrer and his Nazi staff and accomplices in Congress. They will decide the qualifiers as to who they want denied care. Conservatives, Jews, Christians, pro lifers, gun owners, veterans, and their list goes on. Anyone, deemed an Extremist, by the State will be denied care. Count on it.
This is not a matter of dumb public. This is a matter of our government conning, stealing, cheating and lying to us.
Focus on what’s real. Don’t be taken in by their games. They deserve to pay for what they are doing.
Fantastic analysis.
However, the main problem with Insurance is that it is NOT free market. It is heavly regulated and rationed by each State. Simply switching that regulation to the Federal level will not make it more competitive.
Right. Insurance is not the solution. Insurance is the problem. We need less insurance, more personal responsibility, and more conttrol over health care choices.
Give me catastrophe insurance and a tax-advantaged medical SAVINGS account. Then let me decide how healthy I want to be and what I’m willing to pay for.
I think they call it WIC...
That’s right. They want to be the chosen few and to hell with the rest of us. Well, that’s not America and we will not obey. They need to go and their piles of garbage right along with them.
Focus on the real; not what the MSM or the crooked politicians are telling you.
Say, a $50 deductible and $10 co-pay to trace down and fix the rattle in the (10 year old) SUV's dash; and another for the excessive exhaust smoke from the (14 year old) truck's diesel....
Yes.
The reason we as a nation are even considering something as stupid as national health care is because most people have had to deal with the grasping, parsimonious evil of private health insurance at some point in their lives. Most people figure that as long as their health care is going to be controlled by an inefficient, soulless bureaucracy, why not have it be a inefficient, soulless government bureaucracy?
I wish insurance as we know it would just go away. Doctors could then charge cash prices and compete on a cost basis. Insurance should be limited by law to emergency, catastrophic, and chronic care, with state risk pools to cover the indigent. I'd allow RNs, PAs, and Pharm. D's to treat routine cases and dispense meds as well.
Good post. I’m a type 1 diabetic and without insurance I’d be in a pickle. Of course that’s sort of circular—the only reason I’d be in trouble is because of the high cost of things, driven up by insurance in the first place.
It’s a bad situation that health care is in. Government care is obviously not the solution, but we can’t pretend that no insurance or stricly private insurance is either. Before we got married, my wife was without any insurance and that was a nightmare. Hundreds of dollars when she had a bladder infection and lab work needed to be done. Yeesh. Fortunately now she is at least on mine.
Yep. I am a full-time, professional writer, and the company for which I work does not offer health insurance. I have been unable to find a private insurance carrier who will cover me due to a pre-existing condition (clinical depression). Therefore, my only choice is to pay cash for my clinical treatment and medicines. Fortunately, my doctor offers a substantial discount (40%) for cash payment. Most doctors, however, do not. If I were to be injured or became seriously or chronically ill, the only care provider available to me would be the ER.
My wife, who runs our family business, is also without coverage. (The company is too small for affordable group insurance.) She became seriously ill several years ago and had to have surgery, Result: bankruptcy. The total cost of treatment exceeded the total value of our home and all our physical possessions by tens of thousands of dollars.
Fortunately, our young child has full “Cadillac” coverage via Blue Cross. Since the monthly premium is more or less equal to what I’d have to pay for a German luxury car, I ordinarily couldn’t afford it. Fortunately, Grandma pays that premium. (Note: we paid out of pocket cash — around fifteen grand — for his delivery and post-natal care.)
That’s my family: two working adults, bankrupted by medical bills and unable to obtain private medical insurance at any price. Multiply us by several million times and it becomes obvious why the idea of “socialized medicine” is politically viable.
I’m sorry to hear about your situation. Greed in the health industry has brought us to this point. Greed also helps to improve the quality of the care, though (when it can be afforded).
I’ve always thought that some form of group insurance, with the government holding a “group” managed by existing private insurance companies might be some sort of possibility. Although the devil is in the details, and such a system would be rife with abuse.
Wow, what a predicament.
In Maryland, for folks who don't have access to group insurance, either large group or small, or are turned down for individual insurance (or even for folks who can get individual insurance, but at rates higher than what the state sells it), the state provides a high-risk pool through CareFirst (our state Blue Cross/Blue Shield carrier) that has guaranteed issue for all individuals. The insurance isn't cheap by any means, but is generally affordable to most two-income households.
Family coverage under a PPO plan with a modest $1000 deductible runs around $700 per month without a “buy-down.” The “buy-down” eliminates the six-month exclusionary period for existing conditions for folks who haven't been continuously covered by health insurance. With the buy-down, it's $1029 per month, but one would only pay that for the first year.
The “high deductible” ($2600 per year) plan for a similar family is $416 per month without the buy-down and $624 with it.
Of course, as one ages, because we have community rating, those rates go up. For a family headed by someone over 60, the family coverage is over a thousand a month for the moderate deductible plan (without buy-down) and over $600 per month for the high-deductible plan (without buy-down).
The plans aren't cheap, but they're available to everyone in the state who is otherwise uninsurable, and the premiums are actually affordable for most families with two income earners who are willing to make the sacrifice to have insurance.
As well, the coverage is good, and CareFirst is reasonably responsive. My business has a small group plan with CareFirst that actually costs my company more than if we were using the state high-risk pool plan. But the coverage is excellent. When our son had his brain tumor discovered and resected, once we gave the health care providers his insurance card, there was never any question about what would and wouldn't be covered. Over the last two years, we've had hundreds of doctors', hospital and other health care bills, but on only two or three occasions was there any hiccup on CareFirst's part for payment.
sitetest
Thanks for the thoughtful reply.
My wife and I pursued obtaining private insurance several years ago, and in fact did find several affordable plans. Unfortunately, we were both turned down for coverage due to pre-existing conditions (my clinical depression, her BMI). In fact, Blue Cross informed us that they would not cover me at any price.
So what’s a fellow to do? My wife and I are both healthy, active individuals, but we are both in our forties and have pre-existing conditions. We simply cannot obtain private health insurance no matter how much we might be willing to pay. I’m against UK/Canada-style nationalized health care, but what other options exist? According to my research, the French system, while not very good, is the best of the worst when it comes to providing universal care by private physicians, but there’s no comparable option on the table here in the U.S.
So, I ask you — besides using the ER as our primary health care provider in case of catastrophic or chronic illness, what are our options? Are we supposed to crawl under the house and die if we become sick or injured? I honestly would like to know.
Ping!
The United States spends a mind-boggling percentage of its GDP on a health care system that virtually everyone agrees is a disaster. Is there any way out of this mess? There is—and Hoover fellow Milton Friedman has found it.
Since the end of World War II, the provision of medical care in the United States and other advanced countries has displayed three major features: first, rapid advances in the science of medicine; second, large increases in spending, both in terms of inflation-adjusted dollars per person and the fraction of national income spent on medical care; and third, rising dissatisfaction with the delivery of medical care, on the part of both consumers of medical care and physicians and other suppliers of medical care...
... The high cost and inequitable character of our medical care system are the direct result of our steady movement toward reliance on third-party payment. A cure requires reversing course, reprivatizing medical care by eliminating most third-party payment, and restoring the role of insurance to providing protection against major medical catastrophes.
The ideal way to do that would be to reverse past actions: repeal the tax exemption of employer-provided medical care; terminate Medicare and Medicaid; deregulate most insurance; and restrict the role of the government, preferably state and local rather than federal, to financing care for the hard cases. However, the vested interests that have grown up around the existing system, and the tyranny of the status quo, clearly make that solution not feasible politically. Yet it is worth stating the ideal as a guide to judging whether proposed incremental changes are in the right direction....
http://www.hoover.org/publications/digest/3459466.html
The author of this piece has me dumbfounded.
“Why not just have a free market where people can buy whatever kind of health insurance they want? Competition would then bring prices down. “
Is it not that way now? Are you all forced to accept group health from your job or can you not just buy it individually? Where is the law that says “You cannot purchase health insurance on your own, but if you want to join your employer plan so that your premiums are paid BEFORE TAXES and also benefit from a GROUP PLAN RATE”?
Hysteria is taking over people and while I am NOT for socialism in health care at all, we must take care as conservatives to not just look plain uninformed.
I personally think that a regional pool for high risk people is a very solution. We have pool insurance for property insurance and auto insurance, why not for health insurance?
“Unfortunately, we were both turned down for coverage due to pre-existing conditions (my clinical depression, her BMI). In fact, Blue Cross informed us that they would not cover me at any price. ”
I'm not crazy about a lot of features of Maryland's regulation of health insurance. They've done a lot to make it unnecessarily expensive, and failed to do things to bring down costs. As examples, our group and individual plans MUST cover unlimited fertility treatment, while at the same time, the state has refused to implement tort reform. Mandated benefits make up over a quarter of our premiums and uncontrolled malpractice nearly as much.
But one thing that I think that Maryland did get right is making sure that there is an affordable health insurance option for folks in your situation.
I know that such a view isn't considered “conservative” by many, but I don't know how else to make sure that folks can get the medical care that they need without being bankrupted without a state-backed high-risk pool that is obligated to take all comers.
sitetest
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