Recent posts (and politicians) recommend that America’s health insurance needs should be turned over to the competitive free market. However, they forget one crucial fact: Health insurance is not a business like making cars or toasters. Those makers increase their profits by offering a better product. But health insurers make their profit by not supplying its product. In fact, insurers go out of their way to try to collect premiums and never pay a claim. If there is competition, it will be to sign up only the young and healthy, leaving the older and sick to fend for themselves.
How then should health insurance be organized? Think of disease as a public enemy, like crime, fire or foreign aggressors. Government supplies protection against all these hazards, and pays for it through taxes. Healthcare should be no different. A modest tax increase across the entire population, far less costly than current insurance premiums, would support the effort, especially if the insurer, a public entity, did not need to fund costly marketing campaigns, pay exorbitant executive salaries and return a profit to shareholders. Medicare’s administrative costs are about 3 percent compared to 15 to 20 percent for private insurers. This concept makes sense for almost all the developed nations in the world… except us. Time to catch up.
Jay Schleifer, Wellington
