Health Insurance

My favorite serious columnist is Dr. Thomas Sowell of the Hoover Institute. He has a knack for explaining complex concepts in plain, easily understood terms. Today he wrote another jewel that explains that what we call health insurance is not functioning as insurance should, and why that is. As is usually the case, politicians are to blame, but we've been going along with them every step of the way.

First, you have to understand what insurance is supposed to be. It is the sharing of risk, and in a free market it can be quite efficient in keeping every body's costs down. But politicians can't seem to stand free markets. They just always seem to think it needs a little help to make it "better." Almost without exception, "better" turns out to just be more expensive. In the endless struggle to think well of themselves, they will mandate coverage of things that will surely cause them to be thought well of and premiums to be more expensive. But that's just one aspect of making themselves experts on things about which they know nothing. The most insidious and corrupting thing they did was to make the purchase of health insurance for you, tax deductable to your employer. Not only does this add an unnecessary layer of bureaucracy between you and your health care, it immediately inserts your employer into the process of deciding what coverage you need. I know of very few employees, other than those in charge of employee benefits, who actually have any input into what their health insurance covers or costs. At best, the employee gets to choose between two or three types of plans that the employer chooses to offer. But again, it's the employer who is deciding.

And running your health insurance through your employer is the only reason that the term pre-existing condition even exists. If everybody purchased their health insurance directly, changing jobs would not mean changing insurers, which is almost the only time the issue comes up. And the really stupid part is that in almost every case, the employer would rather be paying that money directly to the employee and letting them decide what insurance to buy or not buy, AND the employee would rather have it that way too! They could choose to go out and buy a policy that say, doesn't cover check ups, doesn't cover office visits, doesn't cover inoculations, vaccines or drug co-pays. Maybe it has a deductable like an auto policy, it never starts paying on any malady until you go over $500. A policy written like that would be dirt cheap and something a lot of people would buy.

Now your typical liberal is reading these words (as if typical liberals read this blog) and saying, "No drugs, check-ups or preventative care? What kind of insurance is that? It only covers the really big stuff!"

And they'd have a point, it would actually make it insurance rather than pre-paid health care, which is what they have now. The typical person's idea of perfect health insurance is one where they never, and I mean never, pay a single dime for health care of any kind. And that's a lot of what they like about the idea of living in England or Canada too.


http://townhall.com/columnists/thomassowell/2012/08/28/risky_business