Tuesday, November 30, 2010

What Health Insurance Is NOT

Jeremy makes an excellent point.

...In this country, Noah's Christmas Club metaphor is the dominant way of thinking about insurance. People believe that since they pay premiums they shouldn't have to pay for all sorts of care ranging from physicals to the utterly predictable trips to the doctor for minor ailments that all of us will take during our lives. And under most insurance that is written in this country, they'd be right! At some point our system stopped being about the possibility of catastrophic loss and went into effect at the first dollar. (Keep in mind that even if you pay the first dollar, but it goes toward your deductible, the terms of your insurance contract are kicking in even with that first dollar that you pay.)

In my estimation one consequence of first dollar coverage is that costs for routine care, including some less common things like stitches and simple broken bones, are driven up by the fact that they are covered by insurance. I guess one could argue that the coverage provided for these items outpaces the cost distortions and that consumers come out ahead in this, but I'm skeptical that this is the case.

The conception of insurance as a health expenses savings account funded by one's premiums is unfortunately widely held. I believe it remains one of the major stumbling blocks to enacting real reform in this country...

Yup.

3 comments:

Beer, Bicycles and the VRWC said...

If we insured our cars the way we insure our health, we would have insurance for an oil change.

Jeremy R. Shown said...

Thanks for the link!

GOR said...

Good point, Deekaman! Part of the problem is that we have become less self-reliant and have less GPs than in the past - the ones who would discourage visits for minor ailments that could be dealt with by using over the counter medications or common sense.

I stopped using one clinic after the doctor's excuse for repetitive tests which I objected to was: "Well, you have insurance..." My impression was of a law firm where the partners were expected to generate a certain quota of income for the firm.

And I still change the oil in the family vehicles, as long as the filter is accessible without a hydraulic lift!