[quote=EconProf]My son is a single, healthy 30-year old. He has always bought inexpensive health insurance on his own with a high deductible. He pays the first $2000 per year of any medical expenses and 20% of anything over that amount. Very cheap because at his age the insurance company has little risk and competition with other insurance companies forces them to price it low. Also, he shops around when he needs medical service, offers to pay up front, and gets huge discounts when the provider realizes they don’t have to deal with insurance paperwork. In other words, he is dealing in the private sector he has found the right solution for his situation, and puts no burden on others to subsidize his medical needs.
Now, under Obamacare, he will see his costs double or triple because he will have to pay for older, less healthy people. The government is imposing a one-size-fits-all plan upon us rather than letting us pick and chose what best fits our situation. The result is hidden subsidies to some and hidden costs to others. For all you Piggs under 40, and especially those under 30, the coming rate shock will be a wakeup call. Interestingly, the under 30 year olds were those who most likely voted for Obama.[/quote]
But isn’t this the main idea behind all insurance scheme? Essentially the majority of non-users or minimal users are subsidizing the “superusers”. Aka shared risk. Is shared risk really capitalistic? No. Actually, once you are within an insurance system, it is very communistic. The choices a user makes once they have insurance are no longer driven by market forces because everything is well subsidized. And because it is fully subsidized by your fellow insured, you can pick from whatever care you like. But here’s the rub: doctors are incentivized to recommend the MOST. Therefore, a twisted knee turns into a MRI and a visit to the orthopedic specialist. Because you now have insurance, you are buffered against market forces and therefore, you go along with the recommendations. Which ultimately drive up the cost.
This system will therefore drive up cost even without having superusers in the game, because the doctors are making capitalistic recommendations but the patients are shielded from market forces by having the insurance pay for all of the recommendations.
This system will therefore collapse on it’s own weight IF superusers are included. This is why all medical insurance companies work so hard to remove superusers from their system.
So let’s look at the system in place before Obamacare. They excluded the superusers, but year after year the insurance rate continued to go up at rediculous levels. The ones that need healthcare were denied care, and the rest of us got more care then we really needed. The end result is IF you are unfortunate enough to become a superuser, plan on filing for BK even if you have insurance.
Obamacare at least tries to rectify this by forcing acceptance of the superusers back into the system, but he needed the nonusers like your son to buy into the program as well, otherwise, like I said before, the systems was already barely afloat and would collapse if they take in those that need the most care.
Why Obamacare won’t work? Because it doesn’t address the fundamental problem of doctors incentivized to recommend the most possible care and the patients agreeing to them because they are shielded from paying the true market price of those recommendations.
The only way out is get out of this hydrid system of capitalistic providers and communistic consumers. Which as you can see, only serve to drive up cost to no end without serving people that need it the most.
We have two options, full blown socialist model of single payer. You get the doctors out of the game of incentives for doing more for more profit. They are the main cost drivers under the current system. Remember, the same doctor without the kickback from his radiologist and orthopedic buddies will likely just recommend some icing and course of high dose ibuprofen for that twisted knee instead of the MRI and a visit to orthopedics. The single payer has the power of monopoly to set how much they are willing to pay for supplies and drugs, cost can then come down..with the cost controlled, we can take care of our superusers.
Our other option is a fully capitalistic model. The government completely get out of the game of health care. Superusers should just move out of the country and if you can’t pay, you are refused service, period. This model does work, see China and Mexico and Thailand. The healthcare cost for these countries are very minimal.
But that’s really the two choices we got, anything in between really is just a big FAIL.
