Take their power away!

The current US system isn’t based on a free market, because there’s government regulation on everything related to medicine (e.g. pharmaceutical patents, doctor’s certifications, the cost of malpractice litigation and its insurance) and the job market isn’t free either, so if the employer chooses the health insurance provider but you can’t “shop for jobs” there’s no incentive to employers to choose the best providers.

Economic theories are usually right and work, but most economists think that what is true under a premise A is also valid when the premise is NOT A.

There are two issues with health care that should be separated before a decent solution could emerge. There’s routine usage (e.g. check-up exams, common accidents and diseases), which happen frequently and have (relatively) low cost, and improbable events, which should be covered by insurance policies. Both issues have almost no intersection in usage, frequency, cost and risk, why should they share policy?

While most can’t have the money to pay for rare events (e.g. being in a coma for weeks), they should be able to handle routine events and unusual but common events (e.g. heart conditions is pretty common these days). Also there’s the age issues, which should be handled separately.

Sharing routine costs is bad because of unaccountability (i.e. it’s pretty much a variation of the tragedy of the commons), OTOH for rare events insurance works as it should. I don’t see why can’t we have more options for rare event insurance (e.g. from credit unions which are great usually), some sort of savings account for routine usage (e.g. pay as you use, save when you don’t) and a mixed insurance/investment account for unusual conditions (perhaps covering old age?) so you have smaller premiums and the option to use part of it when necessary.

For the record, Brazil’s socialized health care (i.e. “saúde pública” or “public health”) sucks so much that almost every legal worker has a private health care provider (usually paid by the employer, a few like myself are self paid), these range from better than government support to really great insurance. The primary difference I see between US and Brazil private health insurance, is that here we don’t have an actual insurance: the health care provider must pay for every cost as long as you pay you monthly (fixed) bills, no matter what happens, if your plan covers the condition. There’s a fairly extensive mandatory set enforced by law, but health care providers can limit which hospitals and doctors are available to your plan (that’s where the difference lies). While the system isn’t optimal there aren’t much horror stories if you have private insurance. OTOH poor people are regularly screwed because the socialized system doesn’t work.

Given how much do we pay on taxes, the per capita spent on health care is roughly the same one would pay on cheap private insurance, which would provide much better coverage than what the government provides. Actually this is the most important fact of health care: its true cost can’t be much different with either private or public funding. It’s the efficiency of spending that differs.

P.S.: I’m believe in the free market, but I don’t delude myself in thinking that it works in the current state of affairs. For start we need true deregulation for it to work, but much more is needed.

@Robert
Actually companies don’t have to pay for pre-existing conditions either, at least not for the first X months, where X depends on the specific condition. OTOH if you’re already insured by company A for X months, company B accepts your pre-existing conditions. In practice though most doctors side with the patient if some pre-existing condition isn’t covered, saying it was just discovered. Usually the only situation where pre-existing conditions matter is on pregnancy and birth.

This system works well in practice, people have a chance to have their issues covered and companies get X months paid before having to spend on that condition. Like I said, Brazil’s situation is far from perfect, but it contrasts the costs and efficiency of public and private health care funding.

On regulation. I’m against it in principle, but we can’t call for deregulation before solving the inequalities it caused in the first place. The goal is to have a mostly deregulated market, but first we need some minimal form of regulation to reduce inequality. For example if it’s easy to start a health insurance business, people could do that in their communities, like credit unions vs. banks. If it’s cheap to become a doctor, medical practice will become cheaper, If we stop with malpractice civil litigation (it should be criminal offense or nothing IMO) there would be no industry to provide insurance against lawsuits. If we reduced the duration of patents (say, start with 10 bucks for a year and double the cost for every additional year) medicine would become cheaper. So these are areas where we can reduce regulation or make it more market friendly. More competition means more choice, if people aren’t happy with their choices they can start their business and fill the niche.

It’s foolish to ask for a complete deregulation when things are unequal. First we need to create a transition plan to ensure things can work in a deregulated society. Fundamentally regulation stiffle business, but no regulation today would ensure chaos, because the means of production are concentrated on too few hands. It would be like tying one fighter up and then calling it a fair fight.