by Joe Kirkpatrick
Why is health insurance so expensive? The answer seems very complex, but actually it is very simple if you just follow the math. Financial expert Dave Ramsey stated at a lecture I attended that "82% of adult Americans do not have $1000 in checking, savings, or cash." It stands to reason if this is true, if a person does not have $1000 to their name, chances are, they certainly do not have health insurance. Some out of this "indigent" group are covered by various state government plans, such as TennCare, that we have in Tennessee, but you cannot really count that since such plans pay an unreasonably small percentage of the actual medical costs to the Physician or Dentist - many times as low as 10%. One dentist told me he is paid $10 for a cleaning and X-ray by TennCare. With no dental insurance and not being eligible for TennCare, I pay $110 for a cleaning and X-ray.
Most city, county, or state owned hospitals are required to treat patients with an emergency even if they do not have insurance or money.
Now, let's do the math. A hospital does a $20,000 procedure on 100 people. If all 100 paid the $20,000, the hospital would get $2,000,000. In reality, 18 of them have private insurance, which will probably pay a negotiated amount of $11,000 each to the hospital. 20 have a state funded "free" medical plan that will pay the hospital $2000. That leaves 62 of the people who are indigent with no type of insurance plan which pay the hospital nothing. So, take $11,000 x 18, $2000 x 20, and $0 x 62, and instead of $2,000,000 if everyone paid, the hospital gets $238,000. $20,000 was probably grossly inflated for the procedure to begin with, but the hospital has to charge that to those who can pay because the fact is, the majority pay little or nothing. In Costa Rica, for instance, which has socialized medicine, the procedure would have been free to anyone at a public hospital, even if you are a tourist visiting there. At a private hospital in Costa Rica, the procedure would probably cost about $2000.
For those of us in the United States that do have insurance, why are the premiums so high? Just like with taxes, we are paying the bill for all those who pay nothing. Also, in most countries with good affordable health care like Costa Rica and Thailand, the legal system is held in check by virtually eliminating malpractice claims.
Will we ever have affordable health care in the United States? No. In a well entrenched bleeding heart system of providing income and other benefits to those who choose not to produce, the math just does not support that possibility. Our best shot is curbing any more increases in health care is creating screening boards to weed out frivolous lawsuits, and to reduce the limits of legitimate malpractice suits to actual damages. Those receiving indigent care should not be able to make any malpractice claim since they made no contribution to their care to begin with. That would possibly help cap insurance increases, but would most certainly not reduce them.