5 votes

What Health Insurance Should Look Like in a Free Market

In all this talk of Obamacare this and health care that, government shutdown (which I like, btw) ... lost in the discussion is what health insurance should look like an a free market.

What we have today is NOT health INSURANCE. What we have PRE-PAID health CARE. Insurance is something you buy in case of a catastrophic event, which will only happen to a small percentage of people in any given year -- like your house burning down. That's not what we have in the health insurance industry now. Instead, we have pre-paid health care that covers far more than major, catastrophic events.

People are so afraid of the big expense of a major health problem that they have forgotten what insurance really looks like. So, let's compare a triple bypass operation with homeowner's insurance that covers fire.

I could not quickly find up-to-date statistics, but what I found proves the point.

There are roughly as many triple bypass operations in America each year (500,000) as there are residential fires (400,000). Not all fires result in complete burning down of the house, but some do. The Federal Reserve (yeah!) keeps statistics on average cost nationwide (varies from state to state, but this is national average).

The formula they use is (house value/1,000) * 3.5. So, a $100,000 house (insurance policy) should cost about $350 per year ($100,000/1000 = $100 * 3.5).

That would cover the cost to replace a $100,000 home.

What about a triple bypass surgery? It costs about $20,000 -- less than most people would think. However, a person who received that operation probably has other costs, as well. And there are other illnesses, such as cancer, that a person could get. The cost could top $100,000. But if the total was $100,000, then the annual cost should only be about $350 per year, or $30/month.

Not only that, umbrella liability insurance is available for about $100 per year and very few people actually buy it. Still, it only costs about $100-$200 per year.

There is no reason that $1,000,000 of health insurance should not be available in a free market for about $30-40 per month, and with a deductible of around $1,000.

And that's with CURRENT medical costs that are MOSTLY determined by the government already (Medicare, for example, refuses to pay the full amount that doctors charge, so everyone else's costs go up to compensate). In a free market, cost of health insurance would be less than the average car insurance policy.

Something to think about when the nasties in Washington, DC are threatening to disrupt everyone's lives over something that should be a non-issue.

It is only an issue BECAUSE government has become more and more intrusive into the marketplace over the years.

In reality, the costs would be affordable for 99% of the population if the government would get the hell out of the way.

http://www.healthcentral.com/heart-disease/patient-guide-446...

http://www.surgery-guide.com/bypass-heart-surgery-cost.html

http://gohsep.la.gov/factsheets/FactsonFire.htm

http://homeguides.sfgate.com/average-cost-homeowners-insuran...




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I like the idea but I think you are missing a variable that

makes it hard to compare homeowners insurance to health insurance. The chances of an individual suffering a catastrophic health issue in their lifetime are generally much higher than the chances of their home getting destroyed.

I have known plenty of people who have suffered from a major illness. I do not as of yet know anyone who has lost a house to some catastrophe. As such, the insurance companies are taking a greater risk in giving you health insurance as opposed to giving you homeowners insurance. This greater risk is a factor when insurance companies decide on monthly rates.

Would health insurance be less than it currently is in a true free market? I think so. Would it be equal with homeowners insurance, probably not.

Just my two cents anyway.

Preventative medicine is like

Preventative medicine is like preemptive wars overseas. All the side effects from bad medical decisions is like all the side effects from bad foreign interventions. Prevention should be simply taking care of oneself through diet, exercise, and right living. The insurance should be just this: If something outside of my own control were in the process of happening or already happened and I truly required an intervention. Sort of like how foreign policy intervention in cases of imminent threat and self-defense.

Doctors should participate

in the free market. You find a doctor or a doctor is recommended, you like the doctor and his fees are reasonable.

People carry hospital coverage or employees provide hospital coverage.

2700 pages of Obamacare isn't health coverage, it's control by extortion.

Totally agree - Two examples

Totally agree - Two examples of the free market working in health care are Lasik eye surgery and dental implants. These procedures are usually not covered by insurance and rates have been coming down and quality going up. Unfortunately, it will probably be illegal for doctors to accept someone without insurance - even now they "screen".

That's a good point. There

That's a good point. There are unseen benefits from market activity that are lost, that are substantial, and are forgotten because they are unseen.

Wasn't there an article

on here not long ago mentioning a database of doctors who will take cash? That's a terrific idea. Leave it to the people here, we will solve the problem.