Insurance by definition is a form of risk management which allows an individual to spread the risk of a catastrophe among others seeking to avoid similar risks. Insurance companies were formed to make a profit administering what amounts to risk spreading. Spreading the risk of calamities such as death, injury, property damage by natural and unnatural causes and illness is the function of an insurance company. As in the lawn care business, firms which perform the most efficiently are successful, that is, absent of outside interference.
As property insurance insures against a storm, car insurance- a collision and, obviously life insurance- death, health insurance covers calamitous illness or injury. Property insurance does not cover maintenance on home heating systems nor does car insurance pay for oil changes. If a program covers health events that are, by any definition not major or catastrophic it becomes an entitlement, not insurance, regardless of who pays the bill.
Contrary to President Obama’s promise that you will be able to keep your health insurance, if it is only catastrophic coverage, by the government’s definition, you must replace it. You and others must collectively pay for all conceivable health costs on a continuing basis regardless of your lifestyle and proclivity toward illness/injury. You can not get by with just health insurance—tsk tsk.
If beef ribeyes were free it is reasonable to assume many people would consume more than a healthy amount, perhaps also the case with broccoli. If my car insurance covered gasoline, I would drive more, but then it wouldn’t be car insurance; it would be a driving entitlement.
Faced with a hypothetical twelve-hour stomach ache, no or minimal co-pay for a doctor visit and a low opportunity cost for a person’s time many will go to a doctor when an economically prudent decision (based upon real costs) would be to give it another twenty-four hours. If the demand exceeds the supply of health care providers obviously rationing will occur by the waiting time in the doctor’s office.
For the past some years I have annually had a physical including lab work in May. After the visit I routinely ask the clinic clerk what I owe and often feel guilty when he says nothing-you have no co-pay. In May of 2011 my doctor suggested I return in November. Suspecting that he saw reason for concern, I asked him why six months. He said I was completely normal, but with my age he thought six months would be good. Although it would cost me little or nothing but realizing that it would cost someone something I canceled the appointment. I don’t blame the doctor anymore than I blame my mechanic for suggesting I have my car’s oil changed every three thousand miles instead of six.
In April this year I received a bill for my previous May’s blood work for $592.58 of which I was responsible for 4.22. Paying $4.22 for yearly blood work by itself does not preclude me from yearly checkups. However, I’ve decided to make decisions based upon what someone is paying (or I should be paying)—yes, I know out-of-character because conservatives are supposed to be greedy, self-centered people. Based upon that premise I do not believe annual blood workups are worth $592.58 and will go semi-annually unless I have cause.
Health care consumers responsible for non-catastrophic costs would allow market forces to lower the use and therefore the cost of health care. Unfortunately, we are headed in the opposite direction.
W C (Bill) Augustine is author of Atlas Rising - www.atlasrising.tateauthor.com