krenshala wrote:ScottL wrote:Kiteman, I disagree with your assessment of entitlement programs not being an investment. The idea behind them is not to provide for "freeloaders" as some of you have put it, but to lend a helping hand when times are down for certain families.
If this is the case, why would I make more money on welfare than I do at my $16/hr job? Hell ... my (apartment) rent has doubled in the last four years, but in the last two years my health "insurance" costs have increased five-fold and are now MORE than my current rent payment (about 40% of my take home pay is eaten by health insurance that I have to have, just in case myself, my wife or son get sick/injured).
You have touched on two topics of which I have long been interested. Rent and medical Insurance. I'll leave off talking about rent for now, but it's my contention that Medical Insurance is CAUSING the problem of Medical Insurance. Believe it or not, it is all the Government's fault! (of course, what else would you think I would say?
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If I recall correctly, the problem started during Nixon with his wage and price controls. Companies wanted to offer good workers more compensation, but were unable to do so because of prohibitive federal regulations during the Nixon era. As a result, they started offering "benefits" among which were "free" Health Insurance. Since it wasn't money, it didn't raise their taxes or run afoul of the Federal price and wage freezes.
What it DID do was to establish the practice as acceptable for people to agree to "Cadillac rates" and seek out medical care for the least complaint because the individuals receiving the service wasn't paying for it. As a result, demand for services increased, because Who cares? The Insurance is paying for it! This attitude infected the medical establishment as well. Expensive test? No Problem! Insurance is paying for it! Want extra weeks in the Hospital? No Problem! Insurance is paying for it! Hospital bed only costs $50.00/ day? The Insurance companies have PLENTY of money! Let's raise the cost to $1,000.00/ day! They have to pay it anyway!
Well, no company can exist if losing money. They can't even exist unless they are making at least some threshold level of profit, so when Insurance companies found themselves in loss or at the low threshold of profit, they raised costs. So then it became a contest between the medical establishment and the Insurance companies to see who could get the better of the other. Each kept raising prices to offset the greed of the other, till now prices are ridiculous, even for simple procedures.
The system has become unstable because there is no negative feedback. Neither recipients of medical care, nor the providers of medical care have any (or not much) incentive to control costs. They have incentives to splurge because someone ELSE is paying the bill! (Same problem we have with Government services.) The problem is that Insurance is no longer used for rare and catastrophic medical problems, but is now used for virtually every visit to a doctor or hospital. As a result, there is so much markup of costs, it makes health care (and therefore insurance) Insanely expensive.
I know from personal experience that most medical facilities will offer HUGE discounts for cash payment, (often 50%) because one of the defensive tactics of the insurance companies has become making the medical people walk through a gauntlet of paperwork before a claim is paid. Cash payment gets the money immediately and without hassle. The only way to get either insurance or medical costs under control is to add negative feedback to the system. Recipients of medical care need to constrain their appetite to what is necessary and scrutinize and question their medical care providers on costs. I have personally been involved in disputes with medical care providers who made serious mistakes on bills.
Insurance needs to go back to catastrophic needs, and people need to pay their ordinary medical care out of their own pockets. A reduction in demand caused by people rationing their own money will do much to reduce costs in the Medical business.
Also Legal reform would help. I know a Doctor that pays $150,000.00 per year just for malpractice insurance.
‘What all the wise men promised has not happened, and what all the damned fools said would happen has come to pass.’
— Lord Melbourne —