I just read in the WSJ that Republican efforts to replace Obamacare are based on the notion that Americans want more choice, they want lower premiums and good coverage that is affordable and provides good value. And I want a six bedroom mansion on the water that is affordable. Our chances of reaching our goal are the same … zeeero‼
Let’s be clear; your premiums are not driven by administrative costs or insurance company profits. They are driven by the amount of health care paid for by your insurance … end of story. Competition for your insurance among different companies is virtually irrelevant.
Let’s say you could eliminate every penny of overhead from premiums (which of course is impossible) and your $750 monthly premium dropped by 15% to $637.50. Then what? Well, it keeps going up at a rate determined by the amount and type of health care services used by the insured population and the cost of each of those services. In large part that is determined by the makeup and health status of the people who are insured.
If you are given a choice of plans and because you are young or healthy, you pick a bare bones plan for lower premiums, you assume the risk of high out-of-pocket costs. If you are not that healthy and you and your family pick a better plan with lower OOP costs, but higher premiums because you expect to use the insurance. Now, if everyone makes such rational decisions guess what happens? The better plan’s premiums continue on an upward path based on the growing number of people who enroll because they will be using health care.
You can lower the premiums for some people for a fixed period by letting them select a plan to their advantage, but in doing so costs are shifted elsewhere (such as high risk pools or generous insurance coverage), but they do not disappear, somebody will pay.
The only fair approach for spreading risk and costs is to shrink the number of risk pools, not create more. I for one will be very glad to pay my share of premiums for any type of insurance and never collect a penny in claims.
The very concept of insurance is based on some people subsidizing others with their premiums. But you see, many people don’t see health insurance that way and that’s why Republicans get it wrong and why there is little hope we can solve the health care affordability problem any time soon.
Americans don’t want insurance, they want coverage for everything but at premiums reflecting minimal coverage and they ent someone else to pay.