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Healthcare – an unaffordable luxury?

March 14, 2017

Republicans and Democrats alike are finding out what ordinary Americans have known for decades.

It isn’t health insurance that is unaffordable for many…it’s healthCARE.

You see, health insurance is simply buying medical goods and services on the layaway plan.

Like a layaway at your local K-Mart store, you pick out your couch or desk, i.e. the type of healthcare you think you will need, and pay a little on it until you need it, at which point you get it out of layaway.  When it wears out you pick out another item and do it all over again.

If you lay away something too expensive, eventually you default on the payments. You lose your money and K-Mart loses a least a part of the sale price.

That’s what insurance does.  You pay into a pot of money that then has to be allocated to pay for services.

Who knows if the CBO has scored the AHCA correctly?  Past experience would indicate the actual numbers may not be all that accurate. They certainly weren’t with Obamacare.

But the general picture is correct.

Even the vast resources of the Federal government can’t pay for the total cost of all our medical services and the attendant overhead costs like buildings, equipment and medicine, much less salaries and research.

The old model, i.e. the free market insurance system of pre-ACA days sought to provide coverage by cost-sharing. That meant that healthy people paid a little more to offset the costs of the not so healthy. Rich people paid a lot for the best policies, but since they tend to be healthier overall than middle income and poor people, they were also contributing a larger share to the general pot.

The ACA, i.e. Obamacare tried to follow that model, but lo and behold, healthy people didn’t want to pay for sick people, and they voted against that idea by not buying insurance. The fines (or penalties or taxes, whatever you want to all them) were too low to keep insurance companies solvent.

All of a sudden there wasn’t enough money to pay the medical bills, and the insurance companies had to make up the difference. Since no one can run in the red every month, they are cutting their losses by pulling out of the market.

The AHCA seeks to shift the highest costs to the people with the highest usage, sort of like the ton/mile taxes that truckers pay to use our highways.

That’s going to end up exactly like Obamacare. Those 24 million people will simply find that they can’t afford to pay 50 to 75 percent of their income for healthcare, and they will do what they have always done.

Go without insurance and hope they get lucky.

The solution to that isn’t in whatever kind of layaway plan can pass Congress.

Insurance costs a lot because medical care costs a lot. Until costs come down, insurance is ALWAYS going to be expensive for some and unaffordable for many.

That’s the real problem we need to solve.

Since the people using these government solutions only comprise somewhere between 15% and 30% of the population, what is the bare minimum we should expect as consumers for what we can afford to pay?

Retail Healthcare

Is it time for the medical related industries including pharma and medical equipment manufacturers to be treated like any other retailer?

In short, should we let the economy decide what their services and products are worth and force them to develop the healthcare equivalents of K-Marts as well has the Rodeo Drive dress shops?

Liberals are going to hate that.  They think everyone should be able to shop at the boutique stores.

Conservatives aren’t going to like it any better, because it will require them to accept that it’s OK to let the consumer have control of the costs, rather than DC.

The medical industry will REALLY hate it, because they don’t want to develop price tags for people to see when they shop and before they buy.

And there is a danger that price cutting will undermine quality. Sometimes a more expensive sofa is a better buy, because it lasts longer.

Still, could it be that only when healthcare is fully integrated into the retail environment  we will begin to effect lasting change?

From → op-ed

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