William Thien

Health Insurance. Why Is It So Expensive?

Posted on: March 15, 2012

I received a letter from The Libertarian Party on Monday evening “LP Chair: If We Want Better Health Insurance For All, Why Are We Making It Illegal?” which posed the question, why is health insurance so expensive in The United States? Previously I myself concluded that health care is so expensive in The United States due to the fact that we pay into several systems at once to include our own private insurance, then Medicare, Medicaid, and Social Security as well. The administrative costs of having so many different systems is enormous, particularly when there are so many personnel involved who are not providing any health care services whatsoever, merely administering the paperwork, which must be tremendous under such a bureaucracy. The mere design of such a system is inefficient and no business would ever structure itself in such a manner.

I was interested to see another perspective on the matter as well. The Libertarian letter posed the question, if your auto insurance is designed to cover merely those events which are generally catastrophic or not ordinary, and not maintenance costs such as oil changes and so forth, then why does health insurance cover basic maintenance costs such as the annual physical visit or basic visits to the doctor? It was the contention of the letter from The Libertarian Party that it was that very fact, that health insurance covers the maintenance costs of health care and not just the catastrophic health events which makes health insurance so expensive in the first place. I think that observation makes a lot of sense, or at the very least deserves some consideration, and I wanted you to hear the Libertarian position, particularly since health care costs are slated to go up another twenty-five percent in the next two years, and it is in 2014 that Obamacare begins to take effect en masse.

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