Does Medical Insurance Increase Health Care Costs?

Great Debates
1

Correct me if I’m wrong:

In a free market economy, supply and demand determine the cost of goods and services. When the supply of money increases relative to the supply of goods and services, inflation results. So, if the vast majority of the public (80%) has health insurance that pays for their health care, doesn’t this have the effect of inflating prices charged by providers? If providers will charge what ever the market will bear, in the long run, doesn’t health care cost the same (to the average end user) whether it is in premiums and deductibles or in medical expenses?

This is especially true when you consider that insurance companies now routinely deny coverage on the pretext of “keeping down costs to our customers”, when what this really does is exclude those who need health care the most, and charge the healthy for coverage they don’t need. In the words of the immortal Groucho, “I don’t want to join any organization that would have me as a member.”

If nobody had health insurance, providers would have to cut prices or go out of business, and I am betting that the economy abhors a vacuum more certainly than nature. I think we would all be better off to abolish medical insurance and take our chances with the free market. Come to think of it, doesn’t this logic apply to all insurance?

It’s evil I tells ya, EEEEE-VILLL!!

(_8(|)

2

I agree but not for any of the reasons you state.

Actually, healthcare costs are high because people are not spending their own money on health care. Let’s say I have health insurance. I go to the doctor and have a $20 co-pay. Afteer that $20, I don’t care a lick what the service costs becuase my out of pocket is capped.

Just like if you knew that I was paying for all of your purchases of durable goods over the next year. Would you care about cost?

four ways t spend money

  1. I spend my own on myself. I want the best quality at the best price
  2. I spend my money on someone else. I want the best price. Quality is irrelevant
  3. I spend someone elses money on myself. Quality is important, price is not. (healthcarte situation)
  4. I spend someone elses money on a separate groupe of people. I don’t care about quality or price. (government programs.)

I say we go to a tax deductible reserve with a percentage of bills paid out of pocket.