What to Do about Health Care

While going through paperwork yesterday morning, I was reminded of how nightmarish it is to deal with health insurance companies. Health insurance and health care are in a sector of business that is so complex it rivals the complexity of the IRS tax code.

Which raises the question: How do we simplify the system?

Here's my take. The purpose of health insurance should not be to pay for routine doctor visits and prescriptions. Rather, it should be used only for extraordinary circumstances that you could not pay for on your own.

I believe the primary reason health insurance companies have become the ubiquitous arbiters of health care costs is because of Americans' poor money management. The fact is, if the money wasn't deducted out of most Americans' paychecks automatically, they wouldn't be able to pay for any health care.

But imagine a system where we could walk into any doctor's office and afford whatever service we needed. Imagine a system where we could compare prices online and find out how different doctors had been rated. Wouldn't that be cool?

Prices would inevitably drop because we'd be paying the bills, not the health insurance companies. Furthermore, doctors wouldn't have to charge as much because they wouldn't have to pay one or two or three receptionists to try to get money out of health insurance companies all day.

Waiting in the doctor's room would be thing of the past. Why? Because without health insurance companies limiting your choices, you could simply find a better doctor if your own doctor made you wait too long.

While I'm at it, let me emphasize one point that most Americans seem to forget: You can't get more out of a health insurance company than you pay in. Otherwise, the health insurance company couldn't survive.

Sure, there will be years where you take out more than you put in. And there will be years where you put in more than you take out. But, ultimately, the health insurance company has got to make money. They do that by taking a cut from every dollar you give them. You put in a dollar, you get, say, $0.75 back.

How can we simplify the system and curb rising health care costs? Get rid of the middle man—AKA the health insurance companies.

That doesn't mean that we should get rid of them entirely; only that we should take back the responsibility of paying for ordinary health care costs, leaving them with the much-diminished role of paying only for extraordinary circumstances.

Comments

[Megan]

This sounds like great theory, but how do we actually apply this? I can only speak for the organization my husband is on staff with, so I don't know if this is true across the board - but we are required to use the insurance they provide. Would I love to take that $1100 premium every month and put it into our own personal healthcare savings? You bet - but we are not "allowed".

Then there's always last year when my 4yo was in the PICU for 10 days after lung surgery racking up $100,000+ in bills... No way could we have ever hoped to have paid for that ourselves, even with the best savings plan in place...

Good idea - something to think about...