Many have asked if we really need a national healthcare plan.
It seems like a simple question and most have a simple yes or no answer.
However, it is not that simple.
There are many reasons why we are considering a national healthcare plan.
The following is just one opinion from an insurance professional point of view.
Is our current method of providing health insurance working? Many will say it is not.
True, many do have a difficult time with insurance companies paying their claims.
But this is relatively rare as the overwhelming majority of claims are processed without a hitch.
The most common complaint given is insurance cost and coverage availability.
One has to understand why insurance was originally developed.
It was originally intended to cover those unexpected financial losses that one would not normally be able to afford.
If you apply this definition to health insurance it becomes apparent why premiums are so expensive and why coverage is not always offered.
Most blame the high insurance premiums on the insurance company.
There is no doubt premiums can be very expensive.
But one reason is we have become addicted to comprehensive coverage which covers most everything.
Obviously, the more the plans cover and the less you pay out of pocket, the more expensive your plan will be.
Many years ago, health insurance was simple and provided coverage only for those costs we could not readily afford.
The plans had high deductibles and offered coverage only for major medical expense.
By definition of insurance, the plans were covering what they should.
By the way, you can purchase this type of plan today and the cost is much more affordable as compared to the comprehensive plans covering doctor visits and prescription drugs.
In the 80's and 90's we were exposed to HMO plans.
The intent was good; however this type of plan did not adhere to the intent of insurance.
These plans covered everything with small co-pays.
As suspected, these plans were widely accepted.
And why wouldn't they be.
You never had to worry about paying for healthcare again.
Or would you? Over time, with seemingly never ending funds to pay for healthcare expenses, we came to expect this type of co-pay coverage.
Utilization steadily grew as we became more accustomed to the low out of pocket expense and we became less attentive to the expense involved.
But the original HMO plans ended up failing, as they provided an unusual amount of pressure for the primary care physician to resist sending their patients for outside treatment.
Why, because they were compensated a flat amount per patient whether you were sick or not and any treatment outside of their facility would come out of their pocket.
This caused serious problems in many cases leaving many patients without needed treatment.
HMO's were a great concept in theory, but in practice failed miserably in their original form.
However, HMO's did succeed in spoiling us with co-pays for everything.
Remember these co-pays were covering expenses that we should normally be able to afford.
Before co-pays we didn't go see the doctor for a simple cold or sore throat.
We also managed our health expenses better and monitored our spending.
Utilization was lower as less was covered by insurance.
I think most will agree, the cost of providing the best health care in this country, comes at a price.
It's expensive to be treated by a healthcare professional and to purchase prescription drugs.
And as we all know, there is a drug for everything these days, and they are not inexpensive.
Add to this the cost to process a claim and it's even more expensive.
It takes about 42 cents to process every dollar paid out by an insurance company.
This drives up cost and our premiums even further.
Insurance is not expensive because the companies are getting rich.
Yes, most are making a profit.
But a 10% profit margin is considered very good for an insurance company, yet expected of most any other industry.
There are literally hundreds of insurance companies providing health insurance coverage.
There is plenty of competition for your business.
And with competition comes competitive pricing.
This is what capitalism is all about.
Do you really think the government can compete with capitalism in the long run? Who do you think will pay for their losses if the premium they charge will not cover the expense? That's right, you and I as taxpayers.
The other major concern is not having readily available coverage for those with existing health conditions, such as diabetes or heart disease.
But remember, by definition, insurance is only supposed to cover those losses which are not expected or intended.
If you have an illness that required regular treatment and the plan provides coverage for regular treatment for this illness, then it becomes expected.
If we go back to the original way of providing health insurance, with high deductibles and coverage for major medical expenses, our premiums would less and companies would be able to provide coverage for more illnesses.
Government could continue to assist those who cannot afford the maintenance care and those non-catastrophic expenses.
If we used health insurance as it was intended and not as a means to fund total care, we may not be considering a national healthcare plan.
It seems like a simple question and most have a simple yes or no answer.
However, it is not that simple.
There are many reasons why we are considering a national healthcare plan.
The following is just one opinion from an insurance professional point of view.
Is our current method of providing health insurance working? Many will say it is not.
True, many do have a difficult time with insurance companies paying their claims.
But this is relatively rare as the overwhelming majority of claims are processed without a hitch.
The most common complaint given is insurance cost and coverage availability.
One has to understand why insurance was originally developed.
It was originally intended to cover those unexpected financial losses that one would not normally be able to afford.
If you apply this definition to health insurance it becomes apparent why premiums are so expensive and why coverage is not always offered.
Most blame the high insurance premiums on the insurance company.
There is no doubt premiums can be very expensive.
But one reason is we have become addicted to comprehensive coverage which covers most everything.
Obviously, the more the plans cover and the less you pay out of pocket, the more expensive your plan will be.
Many years ago, health insurance was simple and provided coverage only for those costs we could not readily afford.
The plans had high deductibles and offered coverage only for major medical expense.
By definition of insurance, the plans were covering what they should.
By the way, you can purchase this type of plan today and the cost is much more affordable as compared to the comprehensive plans covering doctor visits and prescription drugs.
In the 80's and 90's we were exposed to HMO plans.
The intent was good; however this type of plan did not adhere to the intent of insurance.
These plans covered everything with small co-pays.
As suspected, these plans were widely accepted.
And why wouldn't they be.
You never had to worry about paying for healthcare again.
Or would you? Over time, with seemingly never ending funds to pay for healthcare expenses, we came to expect this type of co-pay coverage.
Utilization steadily grew as we became more accustomed to the low out of pocket expense and we became less attentive to the expense involved.
But the original HMO plans ended up failing, as they provided an unusual amount of pressure for the primary care physician to resist sending their patients for outside treatment.
Why, because they were compensated a flat amount per patient whether you were sick or not and any treatment outside of their facility would come out of their pocket.
This caused serious problems in many cases leaving many patients without needed treatment.
HMO's were a great concept in theory, but in practice failed miserably in their original form.
However, HMO's did succeed in spoiling us with co-pays for everything.
Remember these co-pays were covering expenses that we should normally be able to afford.
Before co-pays we didn't go see the doctor for a simple cold or sore throat.
We also managed our health expenses better and monitored our spending.
Utilization was lower as less was covered by insurance.
I think most will agree, the cost of providing the best health care in this country, comes at a price.
It's expensive to be treated by a healthcare professional and to purchase prescription drugs.
And as we all know, there is a drug for everything these days, and they are not inexpensive.
Add to this the cost to process a claim and it's even more expensive.
It takes about 42 cents to process every dollar paid out by an insurance company.
This drives up cost and our premiums even further.
Insurance is not expensive because the companies are getting rich.
Yes, most are making a profit.
But a 10% profit margin is considered very good for an insurance company, yet expected of most any other industry.
There are literally hundreds of insurance companies providing health insurance coverage.
There is plenty of competition for your business.
And with competition comes competitive pricing.
This is what capitalism is all about.
Do you really think the government can compete with capitalism in the long run? Who do you think will pay for their losses if the premium they charge will not cover the expense? That's right, you and I as taxpayers.
The other major concern is not having readily available coverage for those with existing health conditions, such as diabetes or heart disease.
But remember, by definition, insurance is only supposed to cover those losses which are not expected or intended.
If you have an illness that required regular treatment and the plan provides coverage for regular treatment for this illness, then it becomes expected.
If we go back to the original way of providing health insurance, with high deductibles and coverage for major medical expenses, our premiums would less and companies would be able to provide coverage for more illnesses.
Government could continue to assist those who cannot afford the maintenance care and those non-catastrophic expenses.
If we used health insurance as it was intended and not as a means to fund total care, we may not be considering a national healthcare plan.
Source...