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Health knowledge made personal
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Health knowledge made personal
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Insurance today is essentially prepaid medical care, not just insurance. The focus should be on catastrophic care. That is what insurance of all types has traditionally been about; you will pay a relatively small amount now so that in the unlikely event that you have a catastrophic fire in your house or you total your car, then you will be reimbursed. Health care insurance should not be for routine care but rather for the catastrophic care. Then just like the car collision insurance, you should be able to choose the level of deductible that you like. If you want a low deductible then you will pay a higher premium but if you choose a high deductible then your premium will correspondingly decline. To be clear, medical insurance is still expensive even when it only for “catastrophic” needs. There are two key reasons. Chronic illnesses require not just a single hospitalization or surgical procedure; they are lifelong illnesses with recurring expenses and these can and do add up. And then there are all the other problems within our system that maintains high costs yet less than acceptable quality. We need to correct the system of care so that the cost of this basic insurance can decline to more reasonable levels. and this type of basic insurance needs to be available. Like you care analogy, let me buy the level of insurance I need and can afford
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Posted by Jason S.
Economists often state that uninsured individuals do not “want” health insurance. Joe Paduda claims that this is not the case ; most uninsured do want health insurance. Mr. Paduda cites a Washington Post, Kaiser Family Foundation and Harvard University survey which shows that “when asked why they don’t participate in their employer’s program, 1% of survey respondents said it was because didn’t think they needed insurance.” Most people decide to not to purchase health insurance–not because they do not want it–because they can not afford it.
This is where economic terminology can create confusion and also clarify the situation. Let me give you an example of what “want” means to an economist.
I want an Audi R8 . However, the cost of this car starts at $112,500. Thus, I prefer to drive a 2003 Toyota Matrix and have some money left over to buy food, pay for rent, etc. Although I do “want” the sports car, I want more to not owe a huge amount of debt and instead be able to afford for other goods that I desire.
Similarly, for economists, if an individual is uninsured, it must be the case that this is because they prefer this situation. This may seem like a tautology, but what it means is that an individual who is uninsured would rather be uninsured than pay $ 12,100 and be insured. The $12,100 that would have gone to health insurance, can be used for food, rent, etc. Further, if you are young and healthy, the probability that you will become sick is probably fairly small compared to the average insured individual and thus you will be paying more for insurance than the expected value of your medical costs.
Those who argue that all individuals should have health insurance can argue this based on equity goals. However, in order to make health insurance more attractive, one must either 1) lower the price of health insurance, or 2) increase the after-tax incomes of low income workers. The first can be done with more flexible insurance arrangements, offering more basic health insurance coverage, improving the efficiency of the health care sector and by man other means. The second means to increasing insurance can be accomplished by either increased economic growth or a more redistributive tax policy.
Nevertheless, nothing in this world is free (especially health care). Everyone would want health insurance if it were free; but because it is so expensive, other wants come to be more important than health insurance and thus individuals become uninsured.