Thursday, July 23, 2009

Why We Should Just Abolish Health "Insurance"

The following from Becky C's blog (about to be discontinued, or I'd give a link).

The headline is provocative, but hear her out -- she has a REALLY sensible point to me. One that I've argued fruitlessly for years: Our health insurance system is idiotic -- it's not even insurance!

Take it away, Becky:
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I have an idea, lets abolish health insurance. And Medicare along with it.

Surely Becky has flipped her libertarian lid.

I don't really think so. It seems if we have medical insurance we should have food insurance as well.

Insurance is designed to cover risks that don't usually happen, but if they do it is devastating to a person. So people pool their resources in a risk pool, and those who suffer unusual devastation are covered.

That is not the way health insurance works. It covers everything—from sore throats, sprained toes to the truly catastrophic.

Coverage of medical catastrophes makes a lot of sense, that is the idea behind insurance.

But coverage of mundane and everyday medical care makes as much sense as having food insurance. We would go to the grocery store and show the checker our food insurance card, and the public or private carrier would take care of the tab.

We probably would not even notice what the actual tally was.

In fact, if I had food insurance I would probably choose steak over hamburger.

And that is the problem with health insurance.

There is no incentive on behalf of consumers to pay attention to costs, and no incentive on behalf of doctors and the medical industry to keep costs in line.

And this has been the real reason that medical costs have become out of control in the last forty years.

It was not so long ago that people paid for medical treatment out of their own pockets. Doctors made a decent salary like other professionals such as lawyers, dentists and veterinarians.

But there were not the obscene amounts of money involved.

Health insurance started with the demands of the trade unions, and then it spread throughout the economy.

The federal government then got into the act with Medicare. Can anyone explain to me why every single person over the age of sixty-two should get government sponsored health care regardless of their income or means?

My god--as a group, they hold the bulk of the nation's wealth.

Yes, there are poor elderly people, and I do think there needs to be something like a greatly overhauled Medicaid system to take care of the poor, regardless of age.

But there is no logical or economic reason for the government to provide free medical care to Warren Buffett. It is entirely political.

Private Health Insurance and Medicare (along with the mismanagement of the Medicaid system) are the cause of our current woes.

The solution is simple.

Dump 'em.

1 comment:

Justin said...

I have thought this way for a long time. I wish we could convince those that matter that this is the BEST way to go. Thanks for posting.