Individual Run Health Insurance

People seem to be more proactive about inanimate objects like their car then they are about their own bodies and health.

Responsibility is a necessary component of our existence. If we value something (anything), we will have to take care of it. If you own a car you need to make sure it receives regular oil changes and other maintenance. Yet people seem to be more proactive about inanimate objects like their car then they are about their own bodies and health.

If you want to get something fixed on your car, you probably take it someplace to get repaired. You might also get multiple quotes on getting it repaired. You talk to friends and family about a good repair shop. And ultimately you make a decision based on all of these factors. What’s wrong with doing the same thing for your health?

Those of us with Health Savings Accounts (HSAs) already do this, but when we call a doctor’s office (before going) and ask how much an office visit costs, most people are thrown aback. They get confused and ask, “Do you have health insurance?” We say “Yes, it is an HSA, but we still have to pay out of pocket up to a certain amount, and we want to get the best value possible.” Most of them (when they look for it) actually have this information. And most clinics are pretty inexpensive. The last clinic I went to was $90 plus a $20 prescription for a generic. Upon arriving at the office they actually asked me before doing any tests because they know that as the consumer I don’t want to be charged unnecessarily. And when the doctor only talked to me for fifteen minutes, I didn’t expect to see a charge for a two-hour consultation.

Well, unfortunately if health care legislation goes through, you won’t have the freedom to shop around at all. The government will charge you a percentage of your income to cover everyone’s insurance costs. That $90 visit is looking pretty good when compared to two or even 5 percent pulled out of your income. The only doctors you will be able to choose from will be selected by the government. And even if you can find a decent one, the best doctors will have closed down to find other, more profitable careers (or will have moved to freer countries).

HSAs are one of the only steps in the direction toward individual responsibility. I’m surprised that there isn’t more discussion about consumer driven health care initiatives in the health care debate. Consumer driven plans mean that the consumer has the authority, not the government. It also means that people have to take responsibility for their own and their family’s health. It means that if they are irresponsible there will be serious repercussions, which in itself should be their primary motivator. If the government’s doctors are worse than our current physicians (and they will be), you are essentially putting yourself, your family and literally everyone you know at a higher health risk.

But universal health care sounds pretty good, right? The names they throw around cast government run health care in a positive and almost otopian light: everyone gets health care. It is universal. Health care is a human right and the government is going to make sure you get it. People think that they are getting something for nothing, that this universal health care is a kind of free perk for being a US citizen. But we will pay for the health care in the form of higher taxes on our employers, income, property and purchases.

If our employers are taxed more, they will pay us less. When a business has to pay effectively 120 percent of your wage (which they currently do) and you only take home 80 percent of it (which is also currently the case), there is a 40 percent gap that goes to Uncle Sam. This gap will widen as the size of government increases. They have to get their money from somewhere and 40 percent turns into 50 percent, 60 percent and so on. On top of that, you get taxed on your purchases (sales tax) and your property if you own any (property tax). We have seen how effective the government is at running things (they aren’t), yet people seem to be okay with adding another “health care” tax to businesses and individuals that will give the government more work to do.

Then there are the extremists who say that health care is a human right. I would argue that we have the right to the pursuit of health care and health in general. Because the truth is, ideology doesn’t mean much to Mother Nature. Cancer, viruses and bacteria don’t discriminate, to say otherwise is delusional. And probably the best reason to prevent this from going through? The politicians that are debating this important issue won’t even be affected by it. You better believe they will continue to get the best health care on the public’s dime. They will certainly include special exceptions that allow them to get superior health care while the rest of us plebeians are stuck with a bureaucratic nightmare.

A few technical details about HSAs: With an HSA, you still have a private health insurance plan called a High Deductible Health Plan (HDHP), but instead of a deductible, coinsurance and co-pays you just have a flat deductible. Meaning every year the maximum you ever pay out of pocket is that deductible. It is simple and it gives the consumer the power.

The HSA is really a second component, even though everyone always talks about HSAs as an all inclusive thing. It is literally a special kind of savings account that you have to apply for after you have a HDHP. All of the money you put into the HSA is tax deductible but you can only use the money for health related expenses. And you are limited as to how much you can deposit per year. But you can also use the money to make investments for retirement and the interest accumulates tax free!

Comments

  1. Health care as a human right is the wrong prescription. Whenever the government attempts to guarantee health care, it must necessarily also control it.

  2. A few years ago, my country switched from a partly-collectivized to a largely private health insurance system. The government is involved in two ways: 1) Everyone is legally forced to have health insurance; 2) People of low income can apply for a government subsidy which can cover about half of one’s monthly insurance costs.

    Other than that, the system’s entirely privatized, with many different insurance companies competing on prices, specific insurance packages, quality, choice, etc. Insurance costs are lower than in most other countries so that virtually everyone can afford insurance.

    But of course, this is leaving people exposed to the whims of the cruel market place, no?

  3. it would be even better if the government didn’t force everyone to legally obtain it. In a free market individual mandates would not be necessary. But the more the free the market is the better off the people are.

    Those who cannot afford it can always rely on charity and the benevolence of others.In Coloardo for instance there is CoverColoardo which is a charity that provides insurance to people with pre-existing conditions. Even those people can be covered through health status insurance as I read but the silly mandates and lack of competition make it more difficult to do so.

  4. “Those who cannot afford it can always rely on charity and the benevolence of others”

    That’s a good point, and perhaps more charitable organization would exist if the government didn’t feel obliged to step in. But heartless capitalists speaking of charity? How absurd!