I didn’t have much of a disagreement with you until this:
[quote=Djshakes]
We can reduce insurance by putting an end to state regulation of insurance companies. This will immediately remove all those mandates from marriage counseling to hair transplants based on special interests of the state. Nationwide competition will bring down prices.[/quote]
It is not government mandates of coverage that drove insurance costs up so much over the last 15 years. That had almost nothing to do with it. Part of it was increased technology, higher cost procedures and drugs. Part of it has been the medical providers covering unpaid services, driving their prices up. An teensy weensy part of it has been litigation costs (though I’ve seen no evidence it’s any higer now than it was 20 years ago). Part of it has been more and more reliance on employer sponsored plans, and the continued shift to first dollar coverage (which you touched on, peripherally, whether you know it or not).
There is little that can be done to eliminate the increase in technology and higher cost procedures. We want solutions to our health care problems. We want to be cured. Research costs big bucks. MRI’s cost more than CT scans, which cost more than xrays. And MRI’s save lives that xrays can’t. So we either pay the additional costs for MRI’s (and future even more expensive imaging technologies) or we accept that xrays is all we can pay for and some people will die because of it. (None of this is to say that MRI’s aren’t ever over used. They are, because they are more profitable.)
The overuse of medical services, which in part is encouraged, or at least allowed, with first dollar coverage, can be fixed by shifting away from both employer sponsored insurance and at the same time, to old fashion deductible plans. Then everyone will choose what kind of plan they want, and directly feel the cost of those plans.
The reason I disagree with the quoted section, is that the free market doesn’t work. It has failed us miserably over the last 20 years. What has happened over the last 20 years is that insurance companies, despite competing with each other, have kept more and more of each premium dollar, not less. It isn’t all of the increases. But it is a significant piece. Medical loss ratios used to float above 90%. Now they’re often under 80%. That difference is all profit for the insurance companies. No other common type of insurance has ratios that low.
The system is irreparably broken. It needs to be fixed. I don’t think the new law will fix it. But it is a step in the right direction, by at least setting a floor for insurance company medical loss ratios. There are other and better solutions. For the moment, none are politically palatable.
