Wednesday, July 21, 2010

Abortion, Third-Party Payer, and the Cost of Health Care

Abortion, Third-Party Payer, and the Cost of Health Care:
A major problem with America’s health care system, both before and after Obamacare, is the fact that consumers very rarely spend their own money when obtaining health care. Known as third-party payer, this problem exists in part because government directly finances almost 50 percent of health care expenditures. But even a majority of supposedly private health care spending is financed by employer-provided policies that are heavily distorted by a preference in the tax code that encourages insurance payments even for routine expenses. According to government data, only 12 percent of health care costs are financed directly by consumers. And since consumers almost always are buying health care with somebody else’s money, it should come as no surprise that this system results in rising costs and inefficiency. This is why repealing Obamacare is just the first step that is needed if policymakers genuinely want to restore a free market health care system...

I've said this before, I know, but it's the kind of thing that cannot be said often enough. I have insurance on my house, but when I need to re-shingle the roof or replace a window, I don't file a claim. The insurance is there for catastrophic events. I have insurance on my car, but if I get the oil changed or replace the battery or the tires or the alternator, I don't file a claim. The insurance is there for catastrophic events.

Well, why is health insurance different? Why, when I go in to have my yearly physical, doesn't the doctor just charge me a price that we negotiate beforehand, and have me pay it? Why is an insurance company involved? Why, when my child has strep throat and needs an antibiotic, is the insurance company involved? The insurance should be there for things that are, well, catastrophic. The stuff that requires big expenses, the conditions that most people don't get most of the time.

The disconnect between the consumer of services and the actual cost of services is one of the largest drivers, if not the single largest driver, of rising costs in the American health care system. The people who supported Obamacare due to fear of "spiraling costs" supported the worst thing that could happen to health care costs.

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