Quote:
Originally Posted by TarHeel
But what is all this garbage about how insurance is supposed to be for preventative medicine about?
|
It is just that - garbage. But, unfortunately, we have bought in to it because of the vicious cycle of increasing costs brought about by increasing insurance participation.
Health insurance is supposed to be for catastophic illnesses. You should take care of the routine stuff on your own. When that was the prevailing situation, the costs of those routine things remained within reach of most people due to market forces.
But not everyone, so we wanted the government to step in and implement programs for those that couldn't afford it. Fine - sounds like what a compassate people should do. But now demand goes up - so cost goes up.
Eventually you get to the point where the government is hesitent (for political reasons) to keep expanding the group of people it will pay for and now the people that can't afford it are the folks just beyond the cutoff. So they pressure government to require that the insurance companies cover such and such because, after all, why should a person that works and makes money not be able to afford care that someone making less can?
So now insurance covers it and demand skyrockets! Why? Because now people are getting something "for free". And the cost skyrockets even more! Why? Because the cost is dictated by what the customer is willing to pay. If I told you that you could go out and get any car you wanted for free, would you pick a Hundai or a Mercedes? If the insurance company is going to pay for it, do you even ask how much it is going to cost? No. You simply hand over your card.
So now a lot of excess money is flowing in to the doctors and the clinics and the hospitals and where there is a lot of excess money soon you have a lot of lawsuits to lay claim it. But those lawsuits are paid out of other insurance policies (which is why juries are so willing to award high judgements) so that now the actual costs of the services go up enormously - the malpractice insurance for a general practioner, I heard last week, is something over $40,000 a year and for a neurosurgeon it can easily top $350,000 per year.
The insurance companies really don't care - the amount of profit they can make without getting a critical eye cast on them is related to the amount of claims they pay out. Let's say that number is 10%. If you are an insurance company, would you rather pay out a hundred million dollars a year in claims and get to keep ten million, or would you rather pay out a billion a year and get to keep a hundred million? So you have no incentive to keep costs down as long as people can pay the higher premiums that result.
But eventually people recoil from the premiums, primarily through employers cutting back on the level of insurance they are willing to provide. So now people complain to government about the greedy employers that won't give them the necessary health benefits and then the government requires companies over a certain size to provide certain minimum levels of coverage no matter how much it costs and the cycle is allowed to continue.
But eventually the companies simply can't keep paying more for the same coverage, and so they start demanding reform to bring their costs down but everyone else, scared that any move that would do that would reduce their level of coverage - and for whom premiums have long since gone past what THEY could pay individually - push for alternatives where the government pays for some of it. So you pick up a few more entitlements based primarily on the argument that if they already cover x and y, then why shouldn't they cover z as well. It's only fair.
Now the race is really on because the government has really deep pockets and is already predisposed to solving problems by throwing tons of inefficiently used money at them.
Look at all the places where there is: (a) a heavy insurance, particularly mandatory insurance, presence; and/or (b) a heavy presence of government money. You will generally see two things: (1) skyrocketing costs well beyond inflation for sustained periods of time; and, more often than not, (2) a vigorous amount of lawsuits with high judgements. Case examples: Health costs, aviation costs (where a set of brakes for a light aircraft that are simpler and easier to make than the brakes for your car - and that don't have anywhere near the potential consequences should they fail - can cost over $2000), auto repair costs, worker's compensation, and college tuition.
Tuition is a particularly poignent example - the large state university north of me spends, on average, $60,000 per SECTION of every course they offer. That does not include plant facilities (another $6k per section), institutional support (another $4k per section), capital improvements, or research activities. On top of that, 60% of those sections are taught by graduate students or part time instructores making less than $3000 per section.
So where is the rest of that money going? No one ever asks. Why? Because if they raise tuition 10% and now students can't afford it what do they do? Government steps in and increases the amount of money available for Pell Grants and increases the cap on student loans. So, since mom, dad, or junior aren't paying for it out of savings they don't really care how much it costs. Even if it means taking out huge student loans - the car example still applies. If I told you that you had to pay for your car out of savings or that you can buy whatever car you want and take out a loan, most people are driven not by the amount of the loan but by the size of the payments. In the case of student loans there ARE no payments (not immediately, which is when they could influence the decision).
So people graduate saddled with huge debt loads (if they graduate at all) and we quickly get to the point where, just like the health care situation, people that could have afforded college ten or twenty years ago can't come close. So now, due to purely artificial inflationary pressures, a huge fraction of people have to rely on government where before few did.
The result of all of this vicious cycling is that we create a dependence on government for basic needs and, when that happens, we hand over control of our lives to government. If they decide that they want to require everyone to serve two years in the military or the Peace Corps or AmeriCorps and realize that they can't outright require it, then they just put it as a condition on qualifying for a federally subsidized student loan or financial aid. Now almost everyone that wants to go to college has to bow to their wishes because the costs have been driven up so far that it is their only option.
Don't think it will happen? Why do you think that registering with the Selective Service is a requirement for qualifying for a student loan or federal financial aid? It happens other places all the time as well. One of the most common is federal highway funds. That's money taken from the states and then returned, with strings, to the states. The latest one was lowering the blood alcohol limits from 0.10% to 0.08%. It is unconstitutional for the federal government to require states to impose such a limit. So what do they do? They threaten to withhold highway funds if the states don't impose the limits. Because the federal government siphons off so much of the money for transportation infrastructure the states, by and large, simply can't go without those funds, so they bow to Washington's demands. The same is true for public education. The federal gov't siphons off the money and then institutes all these wonderful programs - with strings.
So what's the solution? I can think of some things that might have kept these situations from arising while still addressing the goals of the issues that started the ball rolling. But once that ball has rolled I don't know that it can be stopped.
But then again, I've generally come to the conclusion that civilization is a self-defeating concept.