Tuesday, May 27, 2014

Health Insurance Is Free? Others Will Pay? : An Insurance Fantasy

Health care insurance as we know it now, and in the past, has been a fantasy - people believing someone else will pick up the tab or the premiums that the customers pay will cover all cost no matter the situation. Not so. The new premiums will not cover the demand for care, it will be the taxpayers that will fill the gap, again.

With more and more people entering the market place that still believe that quality health care is given, a right, it's free, will find themselves confused and disillusioned when they can not get the  treatment they think they deserve.

It's the classical example of the old shell game, the progressives keep moving the shells around until people's heads are spinning. The progressive socialist believe where there is chaos there is profit. They have used this technique before with great results. Maybe though this time it will be different.

The Health Insurance Illusion
Source: Jeffrey A. Singer, "The Health Insurance Trap," Cato Institute, May 9, 2014.

May 19, 2014

Health insurance gives Americans the illusion that they are spending someone else's money when they receive medical treatment, explains Jeffrey Singer, general surgeon and adjunct scholar at the Cato Institute.

According to a new report from Harvard and Dartmouth researchers, health care costs will grow faster than the U.S. economy for at least the next twenty years. The study's projection has major implications, as Americans already spend 20 percent of their pre-tax income on health care.
Will Obamacare halt this trend? Not at all, explains Singer, because health insurance is one of the largest contributing factors of high-cost medical care. Because health insurance places third-party payers -- whether insurance companies or the government -- into the mix, affordability and frugality take a back seat:
  • Insurance providers are not concerned about making medical care affordable, because when they cover medical costs, they pay for it with their members' premiums. So when insurers contract to set prices with providers and facilities, they have little incentive for hard bargaining. As long as they reach a price that is "good enough," they can pass that price along to their consumers in the form of premiums.
  • When insured patients seek medical care, they spend money inefficiently, because having a third party payer creates the illusion that someone else is paying for the costs of that medical treatment.
This cycle continues, artificially driving up the cost of medical care.
So if third party payers are the problem, is eliminating the third party payer in exchange for a single payer system the answer? No, explains Singer.  In their attempt to keep costs down, single-payer systems create wait times, rationing, limited choices and reduced access to care.
A health care market without third party payers works, as dentistry, cosmetic surgery and Lasik eye surgery have demonstrated. Some providers today are unwilling to accept third party insurance at all, Singer notes, saving their patients money.
 

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