My prediction for health insurance in America

As a result of Obamacare, health insurance companies will be forced to raise premiums further because of excessive government regulation.  When they do raise premiums, thereby doing the exact opposite of what the healthcare bill was supposed to accomplish (lower costs), Democrats will blame the “greedy” health insurance industry and use their act of raising premiums as further justification for more government regulations.

Here’s how the vicious cycle works: government overreaches with regulations into the private sector; prices go up; government blames the private sector; government takes over more of the private sector; prices go up even more.

The end game is the stretching of the private sector to the breaking point.

Make no mistake about it: when your insurance premiums go up yet again, President Obama will be standing there pointing the finger at the insurance companies, when he is the one who is to blame.  His bill was supposed to fix this.  And he will use the rising premiums as an excuse for government to do more.  And on and on it will go until there is no private sector to speak of anymore.

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7 Responses to “My prediction for health insurance in America”

  1. futiledemocracy Says:

    OMG SOCIALISM!!!!!

    Please, do us a favour. The Private insurance companies have been screwing America over for decades. The reason you regulate amoral markets, is because if you don’t, they become immoral markets. And the insurance industry, has become disastrously immoral.

  2. Aaron Says:

    And the federal government is the body with the moral standing to correct that?

    Yes, there must be some regulations. But why does the federal government restrict the sale of insurance across state lines? Why does the government mandate that insurance plans include coverage for services that most Americans will never need or desire? Why can’t individuals make decisions about what they want covered and what they don’t, and why can’t they look outside their state for coverage, thereby forcing insurance companies into a larger pool of competition?

    If you mandate that insurance companies cannot deny clients on the basis of a pre-existing condition, you have obliterated the whole notion of insurance, which is the management of risk. This mandate will force insurance companies out of business, which is probably what Obama has intended all along.

  3. Ali Says:

    Hey Aaron,

    Have you had a look at the Health System in Australia and NZ? (Australia is probably a bit more the bill just passed in the US).

  4. Aaron Says:

    Hey Ali,

    Sorry for the tardiness in my reply. No, I haven’t had a look at them. How well do they work out?

  5. Ali Says:

    Well, I haven’t got a lot to compare with, actually. The health system has been government funded in NZ since the 1930’s (well, that’s when the welfare state began…I’m not sure of the exact date every section of it was introduced). Basically, anyone can get medical help, though there are private doctors whom most people will see and can be subsidised depending on their income. Public hospitals are tax funded and so free for all; private hospitals also exist and that costs. I honestly can’t recall exactly how it works (it’s only been 5 years since I was there!)

    Australia has a similar system, but there is more of a private health care system. You can opt in if you want and pay for private health insurance, and what you get for that depends on where you are, I think. We have actually found that on the whole, the differences are not worth the price. The private hospital where we are is not as well equipped as the public one, and in many cases if a patient needs special care, they send them to the public hospital! The private hospital provides private rooms and better meals for new mothers, and you can choose your own obstetrician. Public you won’t necessarily get a private room, and you take who you get, but it’s free.

    Private, you have shorter waiting lists for surgery – that’s good, but it’s considered a disgrace if essential surgery waiting lists are too long in the public system (which can happen).

    There is a thing called Medicare where you can get a substantial reimbursement on your doctors’ fees and bulk billing, which I don’t quite understand…but it means you are never in a position where you can’t see a doctor if you need to.

    Whether the insurance premiums are inflated, I don’t know. I know a good number of people who have private insurance, so they can’t be that bad. (Health, dental etc. don’t get paid by employers here). In all, there are abuses, but I think it works pretty well.

    Would you be interested in a couple of blog posts by Vinoth Ramachandra? He has some interesting points in favour of Obama’s bill, (though I wonder if he’d agree with every single detail).

    http://vinothramachandra.wordpress.com/2010/03/26/reflections-on-healthcare/

    http://vinothramachandra.wordpress.com/2010/04/09/further-reflections-on-healthcare/

    I thought they were interesting because they were from a non-American Asian, a perspective you don’t much hear…unless you read his blog often :).

    Sorry to ramble. Let me know if that’s helpful or not.

  6. Luke A. Says:

    Prices will start going down when people buy/use health INSURANCE and not health PLANS. The taxcode is set up to make business want to supply bigger, better plans for their employees (after all, they can offer an employee additional ‘compensation’ for less than $1=$1.)

    When you buy car insurance, you don’t expect the insurer to replace your worn out tires or change the oil? You expect them to cover your backside when a catastrophic event occurs and you can’t handle the cost.

    Same for homeowners insurance. You don’t expect the insurer to cover that new kitchen tile or mow the grass? You expect them to cover your backside when a catastrophic event occurs and you can’t handle the cost.

    Why is health insurance so different?

  7. Aaron Says:

    Exactly, Luke. We do not really have health insurance anymore. We have prepaid health plans. This has driven costs out of control.

    When you can pay a $20 copay to see a doctor, you don’t have an incentive to make doctors compete for your business, or, in some cases, not even go to the doctor but just tough it out. When a third party is paying for you, you take no notice of the costs, and the provider can charge about anything they want to charge.

    A return to real insurance would definitely drive costs down.

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