We talked this to death in the run up to Obamacare, but somehow, nobody knows how, the words of wisdom emanating from this site did not find purchase. I was reminded of this in the Republican debate where the subject of “pre-existing conditions” and insurance repeatedly arose yet where none of the candidates talked a lick of sense. Except, slightly, Ben Carson, who correctly said nobody has a “right” to health insurance.
I have tried many times to show that insurance is a bet. You are betting you will get sick and the insurer is betting you won’t. If you do get sick, the insurer pays. If you don’t, you pay. This bet is remade monthly. If you bet you’ll get sick and you already are, you are, in effect, cheating. The insurer has to pay and there is no way that the money you give him will make up for his loss.
That means that mandating insurers “cover” those who are guaranteed to win their bets—those with pre-existing conditions—necessarily increases companies’ costs.
The post from which this quote was pulled was written 20 March 2010: Obamacare Predictions: Part I. The first prediction was “Your insurance costs will increase”. Did yours?
The second was: Your health costs will increase. Did yours? The third was: Your taxes will increase. Did yours?
And there were more big predictions in Part II. (1) Your health care will degrade, (2) Your liberty will be restricted, (3) Your sense of paternalism will increase.
All came true. Read the posts for details on what I meant by the predictions. When you do, you’ll see how wonderfully accurate they were. Maybe soon I’ll do a six-year review on these.
For now, I want to focus on insurance versus health care. They are not equivalent. That people think they are is what accounts for Obamacare and, hence, the inevitable increase in costs and government control. It explains why even doctors don’t know what they’re charging when you go to their office because the rates for services are negotiated by insurance companies who think they are health-care providers.
If no employer were required to provide “health insurance”, and if people (families) had to buy their own health care, then costs would decrease. Here’s why.
Asking to be insured for common colds would find no takers. What insurance company would want to underwrite a sure thing? I’ll tell you: none. It’s like asking for a payout on the sun rising in the east. If you want to take your kid to the doc to buy peace of mind that it won’t die from the common cold, in the absence of government involvement you’ll pay out of your pocket. So you likely won’t go. Costs will decrease.
And if you have something worth seeing the doc about, say strep throat, which is still unlikely to be insured since it’s so common in kids, docs will have to tell you what it will cost. Because you’re paying the bill, not some insurance company, costs will drop. You not paying is now a huge problem: the costs are hidden in the current system. Everything happens in the dark.
Of course, docs would have to write notes saying what services they provided, notes you’d give insurers. We wouldn’t expect insurers to trust people reporting truthfully their actual costs. But the amount of paperwork would be far, far less, because most people wouldn’t buy insurance for anything but serious maladies. Like, say, certain cancers or some kind of non-specific body failure. That’s the point about making bets only on certain events, which needn’t be diseases per se, but only damages to health.
“But wouldn’t costs of insurance vary by things like age, race, and so on?”
It ought to, else it’s a bad bet for one side or the other. And bad bets increase costs.
“But then some people won’t be able to afford insurance!”
That’s right. But you do recall health care isn’t health insurance, right?
“So how do we get poor people health care?”
After reining in lawyers, the same way we get the indigent food. Anything would be better—and cheaper—than the farce of forcing, by point of gun, citizens to buy products from government cronies. Maybe making Obamacare so expensive was part of the plan. Sure makes it an easy sell to say complete government control would be cheaper.