Healthcare

It’s really simple

Here is how many people view our health insurance system. The insurer decides what to pay, what to charge and then rakes in the profits. It’s simple.

There is no recognition of the risk, of the relationship between the cost of care and how much is used and the cost of providing coverage, no understanding that the more generous the benefits, the higher premiums must be.

No knowledge that insurance companies have profit margins no better than regulated utilities and certainly no idea that most Americans do not even have coverage that uses “insurance” to cover health care bills.

If you work for a large employer, or the government, your employer determines deductibles and co-pays, not an insurance company.

Merely substituting government for insurance companies and taxes for premiums changes nothing.

The taxes will reflect the cost of care, if there are no deductibles or co-pays, taxes will be higher. The taxes, like premiums, you pay may get you nothing if you have no claims or be a bargain if you have major expenses.

Those who have little or no expenses will subsidize with their taxes, those that have large expenses. It’s really simple! It’s a matter of paying premiums and out-of-pocket costs if you need care or paying taxes every day you earn money.

The administrative costs of dealing with insurance companies will be replaced with the administrative costs of a large federal bureaucracy supported by contractors all over the country just like Medicare today. Administrative costs are driven largely by government regulations, not by insurers.

Medicare operates under thousands of pages of regulations. Try filing a claim appeal under Medicare and you will understand. Next time you are in a hospital or doctors office note the notices posted about which are required to comply with various laws.

Medicare’s current low administrative costs as a percentage of total costs, first, are too low to adequately manage the program (consider why it takes years to uncover massive fraud) and, second, are not transferable to the younger population with different health care needs.

The annoyances of insurance companies managing claims will not go away, but must be replaced by government actions.

A universal coverage program must have a budget, must manage costs or must keep raising taxes.

Managing costs can be done in many ways from restricting access some care (elective surgery for example) to stricter claim review, to limiting resources available (significantly lower payment to doctors and hospitals may do this indirectly), all of which are routine in other systems.

In the final analysis a universal system will do one thing differently, it will provide coverage for all Americans, but beyond that all the principles of insurance must apply.

It’s really simple, substitute government for insurance company and taxes for premiums.

One last note. The least of your concerns should be insurance company profits and CEO pay. They are both insignificant in the premiums you pay.

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