This is a very real problem, and probably the biggest problem I face right now running my company. Through no fault of my own, I'm uninsurable as an individual, but I'm also an entrepreneur. It makes life rather difficult, and it's an obvious disincentive for people to start businesses. It's also one of many reasons why I'm hiring right now!
over my 9 years studying in usa, i never used my health insurance (always paid due to school regulation)
then 4 years in my country, i never buy one
actually over my lifetime, i never ever go to hospital and ask my insurance to pay for it (too much hassle and i hate meeting doctor)
the fud tactic used (you will pay 1 million dollar when you visit a hospital) always amuses me
maybe a better way is to take care of yourself, exercise, read health textbooks, read wikipedia on generic OTC drugs, eat real food, avoid extreme sports, don't smoke, use common sense etc
never ask an insurance company, "do i need coverage?"
One of the things that nearly everyone here is missing is that insurance plans cap costs. Hospital costs for an uninsured person are 2 to 4 times that which an insurance company will pay. I had a heart attack. The hospital billed $80,000, but the insurance company paid only $18,000, and I paid $2,000. Same for dental plans. They cap the amount that provider can charge and stipulate that he can't bill you for the excess.
The idea that you can negotiate as an individual with health care providers is silly. When I had my heart attack, I was in no position to call half-a-dozen hospitals to get the best price. Try going to your pharmacy to get the price of a prescription knocked down. Individuals have very little negotiating power against corporations. If you doubt that, take a look at the history of the labor movement.
That said, if you are low income and need expensive meds, many pharmaceutical companies have plans for certain drugs. Costco gives a small discount for people with no insurance.
You can't shop around for trauma care. But why can't you shop around for the cheapest non-emergency MRI, chemo-therapy center or dermatologist?
Hint: you can, I've done it. Now that I have insurance, I just pick the guy closest to me. Why should I bother to price shop when I don't get the savings?
When consumers price shop, corporations compete on price. See for example Walmart, Jetblue and Dell. And a lot of medicine is delivered by individuals or small businesses (i.e., 5 doctors in 1 office), not by corporations.
The costs are absurd because of insurance. People are too isolated from prices and all the money the government pumps into the system inflates prices.
The whole healthcare cost problem would disappear almost immediately if people paid medical bills directly and were reimbursed for only the truly unforeseen medical expenses. If doctors and hospitals were forced to compete on price like normal businesses, costs would plummet. It's the lack of a real market that's the problem. What other business has no prices out on display or in advertisements? Try calling up a hospital and asking the cash price for a procedure. It typically doesn't even exist; they're only set up to bill insurance companies and the government at different rates.
"Healthcare in the US is socialism without a central plan and capitalism without markets or prices."
You're at least partly right. Some treatments would plummet, some would remain expensive. We really have no idea, the market is so distorted and the perfect system will always be subject to debate.
In my opinion, we can't ever have a true capitalist market for healthcare because the price elasticity of demand for some treatments is so high.
Another phenomena that raises the costs is the haphazard and/or non-existent approach to capping the value of awards in malpractice suits. It's a secondary manifestation of the separation between the people choosing the price and the people footing the bill.
I'm not an expert, but what from what I've gathered the outcry over malpractice suits is misplaced. There truly is a massive amount of medical malpractice.
I've never had trouble getting health insurance as an individual/family -- you just have to be willing/able to pay the premiums. It sometimes helps to incorporate as a small business, but that's easy to do and doesn't cost much.
If you can afford COBRA, you can usually afford to pay directly for a plan.
(BTW, I'm not suggesting that healthcare is screwed up in a number of dimensions, I just think the premise of the article is flawed).
Wrong. If you have a preexisting condition, you can't get individual insurance. If you have more than two prescriptions, you can't get insurance. I can afford it, but I can't get it. Even if you have COBRA, the premium goes up by 50% in 18 months and runs out completely in 36.
Insurance is there to protect you against high cost, low probability events; basically events where you can afford the expected cost, (probability of becoming sick) x (cost of treatment), but you can not afford (cost of treatment).
If you have a pre-existing condition, (probability of becoming sick) == 1. In this case, insurance is pointless.
I sometimes think that half the problem with employer-provided health care is that people have stopped thinking of it as insurance, as you describe. Instead, you get people who think that they have some sort of right to pay $10 and get $100 of treatment in return, every year, for perpetuity.
The vision plan at my recent open enrollment demonstrated this clearly. You pay $X, and everyone's sitting there determining if they get $X+ back from the plan. And in this case, the vision plan isn't even insurance, because basically the only people going on it have a 100% chance of paying out. And it turns out that if you work the math, for one person, or one person + spouse/SO, you pay in $X and the max payout is $X-, precisely because the probability of payout is so very close to 100%. (This is because the plan only covers glasses and routine eye exams; catastrophic eye damage is covered by normal health insurance.)
(I further note that vision coverage has been one of the most free market of medical endeavors, precisely because of this math.)
How do we know the system is distorted? Because almost nobody actually realizes that this is an insurance system, that you should be expected to pay routine costs out-of-pocket, and that the system is physically incapable of giving everybody in the pool more than they pay in. Unfortunately, this attitude is so ingrained that every government plan I've ever seen also reifies this mindset too, and I think any plan that is conceptualized that way will fail because from the very beginning, you've built it on a shoddy foundation.
We have got to pry insurance away from the employers. (Once again, I note that we've managed to export this problem to the rest of the world. Similarly, I often think that the US would be really screwed by our crappy school system, except that we managed to export it to the entire rest of the world first, so nobody actually has a good system, just slightly different iterations of the same crappy model. "Fortunately" for the US!)
These insights were key pieces of the reasoning behind the HSA program, and most of the Republican Presidential candidates' health proposals, all of which were roundly ridiculed because team Red is out of fashion this year.
When you say "exported to the rest of the world" what countries do you mean? I live in western Europe and health insurance must be covered by the individual, and the school system is a lot better then what I experienced in the US.
Your school system is the same fundamentally broken system of corralling children into a pen and expecting them all to learn the same basic things at the same basic rate. Every industrial society seems to do it this way. I'd argue that some systems are slightly less broken and some slightly more, but compared to what could be, none of them are even close to their potential.
And maybe you should specify your exact country. For instance, France (http://www.npr.org/templates/story/story.php?storyId=9241927... ): "France, like the United States, relies on both private insurance and government insurance. Also, just like in America, people generally get their insurance through their employer." Government health care as seen in the UK is hardly any different from employer health care in practice... it's slightly more disconnected from feedback, but employer health care is already pretty disconnected. So, exactly which country has fully individual health care with no government or employer involvement?
I agree that the basic kind of school system everyone uses is broken (though the quality of pre-university education is low in the US), but the US exported that? I think it predates the US.
I live in Switzerland. No government involvement is not realistic, but in Switzerland you are required to have your own health insurance (changing jobs has no effect on it). The government gets involved by putting a cap on how much insurance companies can make, which makes it less useful for them to use sleazy tricks to try and maximize profits.
As far as the UK being basically the same thing, what system would you suggest? I personally like the Swiss system the best of everything I've seen, but it could be argued that it is just a variation of what the UK has. That is, we all must have insurance, therefor we all must pay for it and the major expenses that people I don't know end up costing me more money. The only real difference is that the insurance isn't government owned and there is some competition in it.
But I can't imagine a system that could work better then these. The only other thing you could do is simply not cover some percentage of the people, but the US is a pretty solid example case that this doesn't work well. I believe that the reason employers are paying insurance is because the plans are already quite expensive and the employers can get a major group discount.
"I agree that the basic kind of school system everyone uses is broken, but the US exported that? I think it predates the US." - it's... complicated. The ideas originated in Europe, but took hold here strongest, then spread with the industrial revolution (later phase, not early phase). That's the short-short version.
"what system would you suggest?" - The Swiss system you describe is what I would suggest. Perhaps not in every detail, because I'm sure you don't capture the full complexity in two sentences :).
The way in which it is not the same lies in the individuals ability to punish their provider, thus closing the feedback loop that markets critically depend on. (Where there is no feedback loop, there is no market, period. Another example: Monopolies are bad because they destroy the feedback loop, because there is no "elsewhere" to take your business.) When the health-care provider is your government, it basically has no reason to care whether you are being served well. (Odds are, the health-care providing part is not even elected so even the only feedback loop a government has is not in play.) It has no competition. In the US, there is only ever so slightly more feedback; technically, if enough of the company complained to HR, they might consider changing the plans they offer, but that's still a very diffuse feedback loop with a central point of failure (HR, easily bribed, or even just overloaded to the point where they can't afford to look at alternatives).
If you're buying insurance individually, and you have the ability to change it as easily as changing my car insurance would be, then you have a market feedback loop, even if you've got the government fiddling around the edges. (I'm only a little-l libertarian, so I'm not necessarily opposed to that, even as I think the US and UK systems are grossly flawed.) For all the rhetoric about the coldness of the capitalist system, you generally get more caring and concern from an entity you can abandon at will than one that gets your money regardless of what you think and has no real incentive to care.
(I also observe this doesn't fix every problem. But what I think it would do is get things moving in the right direction, and create forces that could help resolve the rest. Right now, the dominant forces tend to make things worse and worse over time, instead, as we continually move farther and farther towards guessing what will work... and politicians guessing, no less... instead of actually having the information necessary to figure it out.)
Fair enough, looks like we're in agreement. Oh, and I'll be stealing some of your arguments here next time I'm talking to my swiss friend who supports the Socialist party (not sure how socialist they actually are, but anyway that's what they're called). :)
I too think it would be a good idea to have every individual required to have their own insurance (or the government pays for those who can't) in the US, but first something has to be done about the corruption. I didn't deal with a lot of insurance companies while I lived/worked there, but from the ones I did, more than half tried all kinds of things to get out of paying claims.
Medical and health insurance costs over 7% of income are deductible. Could be different this year, I haven't checked. If you have a business, it can be all deductible.
