31 May 2005
Above all, don't get sick
What's the motor driving the health-insurance machine? Jonathan Wallace has some thoughts:
I am gambling that a more remote contingency will occur: something will happen, or go so badly wrong, that I will require much more than $6,000 [the cost under COBRA of his health coverage] in medical care, this year.
What kind of an event would this be? It's probably not going to be a car accident, as my medical bills would be paid for by the other guy's auto insurance, or, if he doesn't have any, by my own. It's probably not going to be a workplace injury, as that would be covered by workers' comp. So I am really betting on two kinds of events. The first is the possibility I will be shot or stabbed by an impecunious felon who cannot afford to pay the bills resulting from his actions. The second is the possibility that I will get cancer, heart disease or some other very serious ailment.
The crime rate has dropped, and the possibility that I will be badly injured in an assault is quite small. On the other hand, the odds are quite good that I will get cancer or heart disease one day; after all, these are two of the leading causes of death in our world. However, the insurance company is not really betting that I will never get ill. It is simply betting that I will come down with a serious ailment so late in my life that I will no longer be covered by medical insurance. The company really doesn't care how sick I get as long as the taxpayers are footing the bill (via Medicare), rather than the insurance company itself.
And the libertarians, he says, are no help:
To a nonlibertarian, American business history seems full of examples of monopolies and price fixing which occurred in the absence of any government intervention. Just as we could capture any number of oil-producing countries without necessarily seeing a decrease in the price of gasoline, it is hard to see what free market influences will bring about a decrease in the price of medical services. I understand the theory, which says that doctors, chasing market share, will cut prices; but this never actually happens on the ground.
Don't say "never" just yet. In 1998, laser eye surgery cost more than $2200 per eye; today it's about half that, though it's not covered by insurance plans or by Medicare. Or maybe because it's not covered by insurance plans or by Medicare, which have their own ideas about what medical procedures should cost.
Does this mean that health-insurance plans should just stop covering stuff? I don't know. Laser eye surgery is, of course, just one procedure, and an optional one at that. I do know this, though: for the same amount of money I would pay for dental insurance (about $350 a year), I can get three cleanings, and a set of X-rays every other year besides. The policy itself seems almost redundant.Posted at 6:21 AM to Political Science Fiction