Question: If a $600/month insurance policy only costs the individual $33, what does it REALLY cost?
Answer: $600, with $567 less in purchasing power for the hard-working taxpayer who is subsidizing it.
Smoke and mirrors make for bad policy. When we buy any type of insurance, we weigh the benefits of the policy against the loss of the money we must put out to purchase the policy. When we ask the taxpayers to subsidize our policy, all such reasoning disappears.
Most of us have limited funds, so we must choose carefully. Wise people insure against major loss, such as our house burning down. Most of us believe that paying $1,000 per year is reasonable, as the cost to rebuild a house is hundreds of thousands of dollars. Insurance gives us peace of mind, even though the chance of our house burning down is statistically very low.
For many reasons, we have allowed health insurance to defy all the principles of insurance. There is something emotional about health insurance. Maybe it is because we fear death and want to be sure it does not happen to us any time soon. Maybe it is watching others suffer from illness and want insurance to assure that they get well, do not suffer, and have all their bills paid.
We have actually been duped into thinking that someone else ought to pay for all the health care we need. Politicians gain support and votes when they assure the masses that they care about their health. And insurance companies are more than happy to offer generous policies since commissions and CEO compensation are a percentage of the premiums.
Never mind the premiums approach the price of a home mortgage - we want the best, especially if we can convince others or the government to pay for it. The problem lies with the fact that with health insurance we are covering something where no actuary can assess the real risk. New medical breakthroughs are constantly being added to items that are covered, and insurance companies are happy to comply as long as they can jack up the premiums.
Insurance, by its very nature, invites overuse, especially if the deductible is low. There is a sense that we can "get our money's worth" if we access more services.
But there comes a tipping point, when employers and citizens just say "no." Premiums cannot rise further. The health insurers figure out ways to minimize their losses, so they tie the patient or physician up in bureaucratic knots, pre-authorization paperwork and hour-long phone calls that wind up causing everyone to throw up their hands in frustration and despair.
One example is getting pre-authorization for an MRI. Several phone calls establish the date of the injury, the attempts at medical or physical therapy treatments, the time elapsed, the symptoms and physical findings. If the physician's office can make the case, the insurance company approves and the patient is happy. But the costs incurred by the physician and the insurance company serve to ultimately increase the cost of the monthly premium.
When all is said and done, it would have been far less costly for the physician to explain to the patient the value of the MRI, what we can hope to learn, and let him decide to use his own funds or medical savings account to pay for it.
So why will ObamaCare fail? By promising to cover everything, the premiums will be unaffordable - whether paid by the patient, his employer or the taxpayer subsidies. People will quickly learn that earning more at work will cause the subsidies to disappear, and thus incentives to advance in their jobs and careers will be stifled. Employers will learn that they can avoid paying for insurance or paying fines if they keep their employees at part-time. Lower yearly income will require more taxpayer subsidies. Fewer people working and higher taxes spell economic disaster.
ObamaCare is a $1.7 trillion experiment in the ultimate Big Government program. It is sheer hubris to expect it to save money or increase access to care, and many will be hurt in the process of showing that it can't.
Alieta Eck, MD, has been in private practice with her husband, Dr. John Eck, MD in Piscataway, N.J., since 1988. Visit http://www.aapsonline.org/ for more information.