President Obama changed his rhetoric from supporting “health care reform” to supporting “health insurance reform.” He doesn’t simply want to reform the insurance system, he wants to drastically alter the very nature of insurance.
Insurance is and always has been to protect against rare but catastrophic losses that a person would not be able to pay for on their own. People get car insurance to provide financial protection where there’s a total loss or they injure someone. People get homeowner’s insurance to cover against things like the small chance that their house will burn down. People used to get health insurance to provide against the risk of a serious accident or illness.
Insurance is like gambling. You are betting that something catastrophic will happen and the insurance company is betting against that bad thing happening. The company calculates the risk and the cost of covering the event, it does some calculations and adds on a little to run their business. If you like their price, you take their bet. If not, you shop elsewhere. If you are so high-risk, as to be too expensive, you lower your risk level and try again. It’s the free market and it works.
The reason that insurance works is because it does only cover a limited class of catastrophic events. The system spreads small amounts of risk over a large population. Can you imagine the cost of car insurance if every oil change, tune-up, or repair job were covered? How about if homeowner’s insurance covered the cost of painting your house, putting in a larger bathroom, or other preventative or even frivolous maintenance?
This is what has happened to health insurance and it is one of the reasons that the costs are so high. Americans expect health insurance to cover the cost of every procedure, doctor’s visit, and medicine, while at the same time they gripe about their rising premiums.
One tool to combat this problem is the utilization of high-deductible plans tied to tax-free Health Savings Accounts. These plans require that individuals pay their own routine medical expenses, usually up to $5,000 a year, but then kick in when a catastrophic event occurs. Therefore, they are much cheaper than boutique plans. Likewise, Health Saving’s Accounts provide that money paid for medical expenses never sees the IRS.
Obama wants the government to interfere in health insurance. However, government interference is largely responsible for the high cost of medical care. The government forces hospitals and physicians who treat MediCare patients to accept whatever money the government thinks the service is worth. If a service is worth $1,000 and the government only is willing to pay $600, the hospital makes up the difference by charging more to non-MediCare patients.
What needs to happen is rather than redefine “insurance,” we need to remind the American people of the purpose of insurance. If we put more money back in the pockets of Americans and empower them with the responsibility to choose the best services for the best price, costs will tumble as physicians and hospitals compete for business. Likewise, if we remove the artificial barriers from the insurance market, like those prohibiting shopping across state lines for insurance, these companies will be better able to compete for business and drive down prices.
The liberal solution to a problem always produces the opposite of its intended effect. It’s time for the government to stop causing problems and let the innovative citizens of the private sector provide the answer.
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4 comments:
Ellen, I hope you know how blessed you are that you live in America. Sounds like you do. People in America don't like government involvement that's for sure. I think that is an awesome approach. Freedom-can't put a price tag on that. Us Canadians have totally grown used to government involvement. Probably not a good thing.
What scares me most is that while there are people and politicians that know this scam won't work, yet support it for their own personal gain, there are others that truly believe that you can serve millions more people at a lower cost with higher quality care BY THE SAME NUMBER OF MEDICAL PROFESSIONALS!!! These true believers fail to understand economics, simple math, and most of all - human nature.
Here's a solution that's better and cheaper than the current bill being proposed. The government could simply buy private healthcare insurance for the 49 million that they claim are uninsured. Let’s say Healthcare is an average of $350 a month per person and I know that’s a high estimate as when I was unemployed, I looked into buying private insurance for myself and it was $89.99 a month. So at $350 per month that comes out to $4,200 per year or 205.8 billion to cover all of the 49 million uninsured each year. But this is not about healthcare, it’s about power and controlling everyone’s' lives.
Although I offered what I think is a better solution, it is a solution I'd still be against. People should never have anything given to them by the government as the government can only give out what it steals from others. Work hard and buy what you need. If you can't afford healthcare, why do you have a cell phone (usually a blackberry with internet)? How do you afford digital cable? And why do I overhear people like you, sitting in a booth across from me, complaining about not having healthcare on the rare occasion that I'm out to eat at what I'd consider an expensive restaurant such as Applebee's or Outback?
I have a great health insurance idea. Try making healthy food choices, getting rid of toxic emotions, get regular excersise, hang out with positive people who are going to help you be a better person. Those are just a few things we as individuals can do for our own personal health. Far be it from me to rely on a doctor, or a government system, for my health.
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