Large Heavy Cross/Small Wooden Shield
How do you judge if your health insurance is worth the money you’re paying for it? On one end of the spectrum is the government-run, single payer Medicare. Medicare isn’t allowed to drop you if you get sick, doesn’t care when you first came down with rickets, and accounts for 3.5% of the total health care cost of participants. On the other hand is pretty much everyone else in the private health insurance business. Private insurance will drop you if you gain weight, get sick, or age, considers freckles to be a reason not to treat your melanoma, and costs 30% of the total bill.
Okay, but what does private insurance offer that Medicare doesn’t? The clarion call for most private insurance advocates is that the private plan eliminates waste that Medicare doesn’t. In other words, private insurance saves you money by costing you nearly ten times as much. And what exactly does “waste” mean? It means treatments that doctors advise their patients to take that insurance administrators refuse to allow. I shudder to be the cause of such waste.
A useful tool to understanding what is actually being discussed here is to really understand what it is that Medicare and private insurance do. You give them money, and when you need medical attention, they give your money to the doctors. That’s it. If you took the money you pay to your insurance company and put it into a bank instead, by the time you really needed it you could easily pay for all the treatment you would ever need, and pay for your retirement as well. Most people don’t do that, and it isn’t realistic to expect them to start now. But the fact remains that in essence, you are paying an extra 30% to a company to hold your money, and then to tell you how you are allowed to spend it.
Does Medicare do this as well? Yes, though according to the people who prefer private insurance they don’t do it as much. If we are able to have a state-run, single payer plan for everyone in America will it tell you which medical treatments you are allowed to receive? Yes, although if Medicare is any prognosticator (and we have no reason to assume it is not) it will still be better for the consumer than private insurance.
60% of American bankruptcies in 2007 were due to medical costs. Of those, nearly 80% held private insurance at the beginning of their medical emergency. To shave the pin even more, half of that 80% had lost their insurance by the time they filed for bankruptcy. No one disagrees with the fact that the current system is broken, though many are disingenuous about wanting to see it fixed. There is, after all, a lot of money getting passed around over this.
So here is my take. Neither system is great. Medicare needs some reformatting to keep up with tax cuts, which threaten to put it under water. But this is doable. Private insurance is a boil on the butt of America. It’s painful, unsightly, and interferes with your life. But the one thing that you can say for Medicare that you cannot for private insurance is that it will be there for you.
What do you think?
(In an ironic twist, later in the afternoon on the day I wrote this, I got a letter from my insurer stating that my policy had been amended. It said that once I turn 65, my policy will no longer cover drugs that Medicare might, and I should probably look into getting signed up onto one of Medicare’s plans as well. Good to know.)