What would happen if we lowered the cost of health insurance?

Question

I have to write a paper on health care insurance.

Answer 1

You can't do that--that's private industry and not something where the government can order it to be reduced.

There ARE problems with health insurance that drive up costs--from government mandating certain things being included in policies to the government's refusal to prosecute the large insurers for antitrust violations or refusal to enforce contract law.

Right now having insurance is NO guarantee you'll be covered.

When 75% of the people who declare bankruptcy over medical bills ARE INSURED, then insurance is CLEARLY not the answer.

"Aldrich’s situation is "asinine" but increasingly common, said Dr. Deborah Thorne of Ohio University. Thorne, co-author of a widely quoted 2005 study that found medical bills contributed to nearly half of the 1.5 million personal bankruptcies filed in the U.S. each year, said that ratio has likely worsened since the data was gathered.

...

Like Aldrich, Thorne said, three-quarters of the individuals in the study who declared bankruptcy because of health problems were insured. "

http://www.msnbc.msn.com/id/20201807/

Linda Peeno, MD testified that SHE had often denied treatment JUST to save the insurance company money http://www.thenationalcoalition.org/DrPe...

Furthermore:

"the vast majority of health insurance policies are through for-profit stock companies. They are in the process of “shedding lives” as some term it when “undesirable” customers are lost through various means, including raising premiums and co-pays and decreasing benefits (Britt, “Health insurers getting bigger cut of medical dollars,” 15 October 2004, investors.com). That same Investors Business Daily article from 2004 noted the example of Anthem, another insurance company. They said the top five executives (not just the CEO) received an average of an 817 percent increase in compensation between 2000 and 2003. The CEO, for example, had his compensation go from $2.5 million to $25 million during that time period. About $21 million of that was in stock payouts, the article noted.

A 2006 article, “U.S. Health Insurance: More Market Domination, More CEO Compensation”

(hcrenewal.blogspot.com) notes that in 56 percent of 294 metropolitan areas one insurer “controls more than half the business in health maintenance organization and preferred provider networks underwriting." In addition to having the most enrollees, they also are the biggest purchasers of health care and set the price and coverage terms. “’The results is double-digit premium increases from 2001 and 2004—peaking with a 13.9 percent jump in 2003—soaring well above inflation and wages increases.’" Where is all that money going? The article quotes a Wall Street Journal article looking at the compensation of the CEO of UnitedHealth Group. His salary and bonus is $8 million annually. He has benefits such as the use of a private jet. He has stock-option fortunes worth $1.6 billion."

--Save America, Save the World by Cassandra Nathan pp. 127-128

"Insurance Companies Robbing Patients

Robbing patients to pay CEOs leads to unprecedented medical insurance corporation greed.

Thursday, January 3, 2008 8:52 AM

By: Michael Arnold Glueck & Robert J. Cihak, The Medicine Men"

http://www.newsmax.com/medicine_men/medi...

Compare that with the pockets of free market:

http://www.azcentral.com/community/gilbe...

A doctor owned and run hospital that sees everyone gets care, no matter what happens to the bottom line.

http://www.simplecare.com/ a doctor-driven group where reasonable rates are charged.

Note you can go to a walk-in clinic at Wal-Mart or CVS or the like in many cities and get many of the most typical reasons for seeing a doc addressed for under $100.

The price of LASIK has DROPPED dramatically over a decade. Plastic surgery is CHEAP. Compare a major procedure like a tummy tuck with the bill an uninsured patient will get for a medically necessary appendectomy WITHOUT complications.

Only sensible plan I've seen to date:

QUALITY, ACCESSIBLE, AFFORDABLE health care for all.

That means preventative care (physical with follow up). Real medication (no Medicare "donut holes" the really ill are ripped off again.) No bogus ridiculously low "caps" on needed medical procedures. No abuse of the ER. No paying for the silly with the sniffles to go to the doc for free. No more bankruptcies over medical bills. I want THIS plan that ends abuse of the taxpayer, takes the burden off employers, provides price transparency, and ends the rip-off of the US taxpayer at the hands of greedy insurance CEOs (which has been repeatedly documented).

http://www.booklocker.com/books/3068.htm...

Read the PDF, not the blurb, for the bulk of the plan. Book is searchable on Amazon.com

Cassandra Nathan's Save America, Save the World

Answer 2

Health insurance is a direct reflection of healthcare costs. Most policies cover all surgery and hospital costs, which go up by about 10% a year, so premiums go up by 10% a year.

If you mandate that prices for insurance go below costs, then companies will no longer sell it.  Simple.  

It does not make sense to sell something at a loss. Insurers need to be able to estimate risk, and then set a price for that risk, plus costs and profit.  

It is worth noting that almost all insurers in the health insurance arena have gone out of business over the last 20 years, especially in the small business market. It used to be there where over 100 insurers in California.  Now it is about 5. Many states have only one or two.