Nationalized Insurance

[David S]

A competitive free market system is the best way to provide quality goods and services at the lowest prices.

Insurance should be used only to cover losses that we can't pay for out of pocket. Major surgery like a heart by-pass is too expensive for most people to pay for so we need insurance for things like that. But routine doctor visits, and other relatively low cost things should be out of pocket.

[David S]

Government insurance?

Private insurance.

[David S]

I think we should have a general "catastrophic loss" public insurance system.  Such a system would go a long way toward what Republicans call "tort reform".  In many cases of medical malpractice, for instance, plaintiffs deserve recovery, but the burden should not fall on individual doctors or even the medical profession in general.  Such insurance would allow people who suffer losses through no fault of their own to recover without burdening a particular sector of the economy disproportionately.

Why does it have to be public? Who pays the premiums the owner or the taxpayer?

In the insurance business there is a term called "moral hazard" which means that by insuring against some event you increase the risk that it will happen. An example would be building a home in a location where it is known that floods are likely. An insurance company would charge you a very high premium or refuse to insure such a house at all, so the owner would probably conclude that it was not practical to build a home there. But if the government  guarantees insurance on the home then the owner will build it knowing that if it does get destroyed by a flood the government will pay for it. So that type of insurance promotes risky behavior.

[David S]

It gets back to my earlier question; who is paying the premiums? Usually government sticks the taxpayer with the cost. If thats what you have in mind then the moral hazard exists. The homeowner would not be discouraged from building the house in a high risk area. On the other hand if the homeowner pays the premiums that may eliminate the moral hazard but then why get the government involved? Leave it in the private sector and let the insurance companies do it.

[David S]

In every other aspect of our lives when we want something we just buy it and we don't expect government or insurance to cover it.  When you buy groceries you don't expect someone else to pay for it. When you buy a car you don't expect insurance or government to pay for it. Same thing for a PC or a house or just about anything else you can name. But with healthcare we expect either government or insurance to pay for it. And we expect our employer to pay for the insurance. Those expectations have defeated the competitive free market forces that would normally keep prices down. Medicaid was created to provide healthcare for the poor. Medicare was to provide healthcare for the elderly. Since then prices have skyrocketed out of control and now even working people are struggling to get healthcare insurance. The way to get costs under control is to get healthcare back in the competitive free market.

Two examples of medical products/services that still operate under a free market are vision correction surgery, and over the counter drugs. 15 years ago vision correction surgery cost about $3000. per eye, but today you can get it for less than $1000 per.  In general these are not covered by insurance or the government programs, so people pay for them out of pocket. That causes them to shop for the best deals. Providers know this so they advertise their prices to attract customers. And they have to be competitive.  So despite 15 years of inflation the price for this service has come down dramatically.

With over the counter drugs when you walk into a drug store you usually see a wide assortment of products. Competing products are shown side by side with prices clearly shown. The custmer can pick whatever suits his needs and his pocketbook. And  these products are safe, effective and inexpensive.

Thats how it would work with other medical products and services if we could get them back into the free market. Of course catastrophic healthcare insurance would still be required for  major surgery. But that insurance cost could also be reduced if we could get it back in the free market.

If you go with the socialist plan i.e. national healthcare this is what you will get.

At first the system will seem to be working great, but eventually costs will start rising. Government will raise taxes to cover it until people start yelling about the taxes.

Then government will try wage and price control. This will start to anger the medical professionals. Costs will continue rising.

Then government will start rationing services so you will go on a waiting list until government bureaucrats decide its your turn. That angers the patients. Costs will still keep going up.

As medical professionals decide the pay is not worth the years spent in school you will start to see shortages of Doctors and nurses. That will aggravate the rationing problem.

These things are symptomatic of socialist systems. They are already starting to happen in Canada and Britian. In my estimation they will continue to get worse.