The Problem with Insurance: no competition

[cushla_machree]

This is a favorite of the libertarian minded. Why are health insurance premiums so high? Because Americans don't get enough exercise or eat well and let their problems deteriorate until the last minute (funny considering Canada has a similar lifestyle and spends less per capita...) AND we don't have a true free market operating, because

* over 40% of the health care market is via government programs
* the rest is heavily regulated and the companies like it this way because it keeps out competition and raises prices

Solution? Deregulate and supply goes up and prices go down.

While we know that libertarians answer to most problems can be solved with deregulation...what would the health care market look like if this were to happen? How would prices go down?

We have had 30+ years of private insurance, and the only innovations I have seen from them are the co-pay and the deductible. No true free market would exist without the removal of government programs, and of course, denial of access to the uninsured (no more free hospital care..). SO if everyone was an individual buyer, all I can imagine would be high deductible plans on the market. And more denial of care.

Now, if some people are buying as a group (the insured) it would make sense that costs would be lower than those who go it alone (the uninsured)..but if everyone was a free agent..I still think it would be more expensive than a single payer universal system. Because it would do nothing to remove the inefficiencies of the private systems that we see now.

[PSPS]

1. Pooled risk

Pooled risk is the true model for health insurance. Everyone pays the same rate. Some will require less medical attention, some more. But you price the pool so the risk is spread out.

That's the way health insurance used to be run.

Now, insurance companies refuse to cover anyone they deem likely to make a claim. If they can't get away with outright refusal, they price them out of the market.

Your example of "people buying as a group" getting lower rates shows how this works. Group plans always cost less per individual than any individual plan because they mimic the pooled risk model that all health insurance used to follow.

This is why single-payer is the only way to go. It's the only plan that returns coverage to the pooled risk model. (Plus, it eliminates the obscene hundreds of millions of dollars lavished on the CEOs of private insurance companies at the expense of premium payers.)

[cushla_machree]

5. consumer driven plans vs universal

Plus, it eliminates the obscene hundreds of millions of dollars lavished on the CEOs of private insurance companies at the expense of premium payers.

So, you have a problem with people making money?

Just kidding. I get that all the time though if i bring up that point. Its not that i have a problem with companies making money, but when they do it at the expense of care, then it becomes an issue.

If you think of a typical business, say Nike. They make shoes. Everyone buys their shoes. If they made bad shoes for a high price, you could just go and get your shoes from adidas. But this doesn't work with health insurance. Free market enthusiasts would have you believe, its because the market is too regulated. Open it up, and health insurance companies would be forced to compete with each other, therefore, prices would go down while still maintaining quality. However, something that bothers me about that theory is, that health insurance is costly. We can shop around for car insurance, because they will only cover you in case of an accident. They don't care if your brakes go out or your engine dies one day. So the market works with car insurance. I just don't see this happening with health insurance.

As long as you have health care dollars being wasted on profits, overhead and advertising, i don't see how it will work. The only way a market based model would work is if all government dollars were removed and people were denied care if they were not able to pay. And the only plans that would be affordable, would be high deductible plans. They would cover you in case of say, an accident or if you suddenly got sick. But it isn't going to help you in actual routine care. Because the private sector has shown that, denying care and withholding payment is the surest way to profits. They aren't going to make money providing all their subscribers with care.

[napi21]

2. No, the problem is that they all do the same thing!

First, they ALL try every trick to get out of paying anything at all! Then, they lose paperwork, things have crossed in the mail, I need more info...ANYTHIN to postpone paying the claim.

The other BIG problem I see is that the ins. co's REQAUIRE your Dr. to do more tests than are necessary! ie: 5 years ago, I had a bad winter cold that hung on and on, and after about 4 weeks, I started getting a feaver and a BAD cough with it. I decided that whatever it was, it most likely wasn't going away by itself, so I went to the GP. He did the typical temp., BP, listen to the chest etc, and I could tell by the look on his face he knew what was wrong, but instead of prescribing anything, he told me to go to the xray clinic about 10 miles away for a chest xray. The next day, his staffer called me to say I had pneumonia and they would call in a prescription. Now I don't know how much the xray was, but I guarantee you, that Dr. knew I had pneumonia while I was sitting there! I was griping to my good friend who is a Dir. at a major hospital system in the NE, and she said "That's required by the insurance Company!" My Husband was having sever pain in his elbow. The Dr. sent him to a specialist...again about 15 miles away. The specialist said "It's arthritis, so take Advil." EVERYTHING is CYA now! Oooo, you have no idea how this really pisses me off! The GP is a trained medical doctor! The best we could get out of them in recent years was a flu shot, and refil prescriptions for hubby's Lipitor!

[cushla_machree]

3. I had a similar experience

I went to the doctor, complaining of cramps. I wouldn't have made the appointment if i wasn't seriously in pain (crippled in fetal position, more like it). I had tried every over the counter pain medication...the best thing i had found was 8 ibuprofens every 6 hours or so. So i go to the doctors, explain my problem. I get prescribed prescription strength naproxem. Problem? I already new over the counter naproxen didn't work for me AT ALL. But insurance would only cover that, and THEN, if it didn't work, I could come back and get another drug. Guess who had to come back. So 2 prescriptions and 2 doctors office visits later, i got what I needed, and my doctor agreed with me that thats what I should have had in the first place.

Now I hear, woman who are getting masectomies are getting kicked out of the hospital right after and treated as outpatients. Cheaper for the insurance companies, it is. Awesome!

[Lydia Leftcoast]

4. And higher rates for individual buyers are a convenient scam anyway

If there were an insurance company devoted exclusively to insuring Lydia Leftcoast, yes, then the high prices and high deductibles would be justifiable--or maybe not, since I"m pretty healthy.

But in fact, the company insures an unknown number of other non-group individuals. Why can't we be a group?

Why can't ALL the company's policy holders be one big group?

Answer: Because the bean counters, who rule every aspect of life these days, have figured out that they can get more free money by offering individuals only high-premium, high-deductible plans.

[cushla_machree]

6. Exactly

Because the bean counters, who rule every aspect of life these days, have figured out that they can get more free money by offering individuals only high-premium, high-deductible plans.

Thats what I see all these consumer driven plans to be like. Most Americans wouldn't benefit from the tax deductibility of a health savings account, and high deductible plans will just end out costing you more money...the only way those plans would help you is in the event of, say an accident or major surgury. I am on cobra now, and looked into all those plans marketed towards people between jobs. I did all the math out, and I would be paying just as much if i planned on going to the doctor and buying prescriptions. They only work if you plan on never going to the doctor, or taking any medications. Otherwise they are just scamming you out of your money.

All those consumer driven plans would just be a big boon to all the financial interest and backers. I suppose most people pushing for them, are all more or less fairly healthy or could just afford them.

[Lydia Leftcoast]

8. As a self-employed person, I can already deduct my health insurance premiums

It's coming up with the premium every month that's the killer.

It's definitely preventive care. It prevents me from going to the doctor unless I have acute symptoms.

I am seriously thinking of dropping it.

[cushla_machree]

9. I've thought of dropping mine...

It prevents me from going to the doctor unless I have acute symptoms.

I have an HMO, and I also happened to move away. So my plan is useless to me now because I am 'out of network.' The worst part of being on an HMO to me was, how they would not let me see a specialist i had been seeing for years, as well as a few other doctors. Why do THEY get to choose doctors? I only keep the insurance because i already paid my drug deductible for the year, and i need it in case of an accident...and the fact that as a person with a preexisting condition, I can't go off of insurance because i would never ever get back on as an individual buyer.

The other side of that statement would be, people go to the doctor too much and, i shouldn't have to subsidize the care of every tom dick and harry with poor health habits. If i had a penny for every time i heard that...

[sicksicksick_N_tired]

7. I do not believe a "free market" could exist without enforcement of laws protecting,...

,...both the consumer and the entrepreneur.

Otherwise, you are just operating in a "rule of the jungle" predatory market. THAT is not "free". It is an "oppressive market".

With respect to insurance, it's a profiteering scam that should NOT NOT NOT be allowed with respect to basic needs like health care. The "profit" objective is a built-in conflict with health CARE.